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2020

Software defined networking Market

Software defined networking Market Size, Share, Competitive Landscape and Trend Analysis Report by Component, Organization Size, End User and Industry Vertical : Global Opportunity Analysis and Industry Forecast, 2020-2027

IC : Information, Infrastructure & Network Security

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Author's: Vikas Gaikwad & Rachita Rake | Onkar Sumant
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Software defined networking Market Statistics: 2027

The global software defined networking market size was valued at $9,995 million in 2019, and is projected to reach at $72,630 million by 2027, growing at a CAGR of 28.2% from 2020 to 2027. The software defined networking is a technology used for creating a global view of a network to provide centralized, intelligence-based network control. It has redefined the networking architecture by providing a flexible way to manage and control complex networks through efficient resources and data traffic management. Software defined networking segregates the control plane and regulates routing of network traffic from data plane, which forwards the traffic to the target destination for providing a programmable network platform. For communication service providers, software defined networking offers improved agility & robustness, ease-in-network congestion, cost & time efficiency, flexibility in network infrastructure, and rapid innovation. 

The solutions segment dominated global software defined networking market share in 2019, and is expected to maintain this trend during the forecast period, due to increase in adoption of software defined networking solutions by enterprises and communication service providers to significantly accelerate the time for delivering new applications and services. Software defined networking solutions are providing enterprises with advanced network, compute, and storage devices and features that are immediately available for use. However, the services segment is expected to witness the highest growth, owing to upsurge in demand in enterprises to develop a strategy for networks, which, in turn, boosts the adoption of software defined networking services.

Software defined networking Market

On the basis of organization size, the large enterprises segment exhibited the highest growth in 2019, and is expected to maintain its dominance in the upcoming years, as the businesses in large enterprises segment are constantly setting up new virtual machines and applications to handle processing requests due to the need to accommodate Big Data. The implementation of software defined networking is further helping IT teams of large enterprises to change the network configurations with no effect to the network. However, the small- & medium-sized enterprises segment is expected to witness highest growth during the software defined networking market forecast period, due to the need for customized approach provided by software-defined network, surge in need to make business more streamlined, and rise in need to improve efficiency by shortening the time taken to troubleshoot a solution.

By end user, the global software defined networking market share was dominated by the enterprises segment in 2019, and is expected to maintain its dominance in the upcoming years, owing to increase in focus of enterprises on re-architecting their networking infrastructure to achieve automation, network security, and application performance. However, the cloud service providers segment is expected to witness highest growth during the forecast period, as software defined networking provides an ease and favorable conditions for the use of cloud computing.

North America dominates the software defined networking market, owing to surge in adoption of advanced technologies across various industry verticals, increase in adoption of cloud computing & mobility solutions, and rise in need for network management for large network traffic. Enterprises in this region are rapidly adopting software defined networking as well as network function virtualization technologies, as they are majorly focusing on moving their network and IT operations to the cloud. However, Asia-Pacific region is expected to observe highest growth rate during the forecast period, due to increase in number of start-ups and upsurge in implementation of new & advanced technologies such as virtualization services and mobility solutions among working system of businesses in this region. Moreover, expansion of cloud-ready industries in the Asian countries and increase in awareness about the benefits of software-defined networking, which include scalability, service quality, visibility, and cost-effective security are positively impacting the growth of the software defined networking market in Asia-Pacific.

Software defined networking Market
By Component
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Services is projected as one of the most lucrative segments.

The report focuses on the growth prospects, restraints, and software defined networking market analysis. The study provides Porter’s five forces analysis of the software defined networking industry to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the software defined networking market trends.

Segment review

The software defined networking market is segmented into component, organization size, end user, industry vertical, and region. On the basis of component, the market is categorized into solutions and services. The solution segment is further segregated into physical network infrastructure, virtualization & control software, and SDN applications. The services segment is subsegmented into professional services and managed services. By organization size, the market is classified into large enterprises and small- & medium-sized enterprises. Depending on end user, it is fragmented into telecommunication service providers, cloud service providers, and enterprises. According to industry vertical, it is differentiated into IT, consumer goods & retail, BFSI, defense, telecom, healthcare, and others (media & entertainment, energy & power, and manufacturing). Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Software defined networking Market
By End User
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Cloud Service Providers are projected as one of the most lucrative segments.

COVID impact analysis

The COVID-19 pandemic has brought radical changes to daily lives of the people, work, and the surrounding environment. Software defined networking technology is expected to witness high demand in the upcoming years, as a number of vendors are increasing their investments in network function virtualization and software defined networking to keep pace with rising internet traffic stemming due to coronavirus. For instance, according to a report published by AT&T, the demand for the company's virtual private network (VPN) offering increased by 700% during the past few weeks, as people have begun working from home. During the COVID-19 pandemic, organizations that deployed software defined networking earlier have been able to quickly adjust to the new traffic patterns and network requirements that were resulting due to work-from-home mandates. Software defined networking helped those organizations to cope with the ongoing pandemic and maintain economically positive operations.

Top impacting factors    

The growth of the global software defined networking market is driven by factors such as increase in adoption of cloud computing, increase in investments in software-defined networking/network function virtualization to reduce capital expenditure & operating expenses, and increase in need for mobility services. Rise in implementation of IoT applications and intelligent edge, and its conjunction with software defined networking operations are expected to further opportunistic for the growth of the software defined networking market in the upcoming years. However, factors such as legacy network equipment issues as well as the security risks due to centralized nature of data plane hamper the growth of the market during the forecast period. On the contrary, the emergence of 5G network is expected to provide lucrative opportunities for the software defined networking market growth in the upcoming future.

Software defined networking Market
By Industry Vertical
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IT & telecom industry is one of the most significant segments.

Increase in investments in software-defined networking/network function virtualization to reduce capital expenditure (CAPEX) and operating expenses (OPEX)

The introduction of software-defined networking/NFV helps to reduce the burden of capital expenditure and operating expenses faced by enterprises while handling rapidly emerging demands by reducing the reliance on hardware platforms. For instance, virtualized radio access network (vRAN) does not require a baseband unit (BBU) at the site, lowering operating expenses owing to the limited power consumption along with rents at cell site with an estimated total cost of ownership savings. Furthermore, various communication services providers are investing in these technologies to transform their network architecture and minimize the cost of networking operations. 

The emergence of 5G network

The emergence of 5G wireless network enabled the exploitation as well as development of massive capacity and massive connectivity of powerful & complex heterogeneous infrastructure. Hence, upsurge has been witnessed to enhance the networks for future 5G needs to make 5G network more capable of handling the complex context of operations and support the diverse set of new services and applications. These requirements of the 5G network offers numerous opportunities for the growth of the market, as network function virtualization and software defined networking are being adopted to upgrade network architecture to support the requirements of a new eco-system in the coming future.

Software defined networking Market
By Region
2027
North America 
Europe
Asia-Pacific
LAMEA

Asia-Pacific region is projected as one of the most significant segments.

Key Benefits For Stakeholders

  • This study includes the software defined networking market analysis, trends, and future estimations to determine the imminent investment pockets.
  • The report presents information related to key drivers, restraints, and software defined networking market opportunity.
  • The software defined networking market size is quantitatively analyzed from 2019 to 2027 to highlight the financial competency of the industry.
  • Porter’s five forces analysis illustrates the potency of buyers & suppliers in the software defined networking market.

Software defined networking Market Report Highlights

Aspects Details
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By COMPONENT
  • Solutions
    • Physical network infrastructure
    • Virtualization & control software
    • Software-defined networking applications
  • Services
    • Professional services
    • Managed services
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By ORGANIZATION SIZE
  • LARGE ENTERPRISES
  • LARGE ENTERPRISES
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By END USER
  • Telecommunication Service Providers
  • Cloud Service Providers
  • Enterprises
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By INDUSTRY VERTICAL
  • .IT & TELECOM
  • Consumer Goods & Retail
  • BFSI
  • Defense
  • Healthcare
  • Others
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By Region
  • North America  (U.S, Canada)
  • Europe  (Germany, France, UK, Italy, Spain, Rest of Europe)
  • Asia-Pacific  (Japan, China, India, South Korea, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
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Key Market Players

INTERNATIONAL BUSINESS MACHINES CORPORATION, ARISTA NETWORKS, INC, CISCO SYSTEMS, INC, JUNIPER NETWORKS, INC, HEWLETT PACKARD ENTERPRISE DEVELOPMENT LP, BROADCOM INC, NEC CORPORATION, CITRIX SYSTEMS, INC, DELL, TECHNOLOGIES INC, EXTREME NETWORKS, INC

Analyst Review

The adoption of software-defined networking technology is increasing for more rapid provision, management, and programing of networks. The current business scenario is witnessing an upsurge in the usage of software-defined networking across various verticals such as IT, consumer goods & retailing, defense, healthcare, and BFSI.

Software-defined networking provides choice in programmability and automation across campuses, data centers, and wide-area networks. It is successfully enabling enterprise IT teams to achieve more simplified, agile, and centralized operations. The adoption of software-defined networking is gaining momentum, as it increases productivity, helps to reduce cost, and enables reuse of network resources. Furthermore, the future networks are being designed by implementation of software-defined networking technologies. For instance, the cloud computing data centers, WAN, campus networks, carrier networks, and even wireless networks are increasingly embracing the adoption of software-defined networking. In addition, rapid development of software-defined networking-based applications significantly contributes toward the growth of the market. Various companies have started the businesses around advanced network applications such as network monitoring, cyber security, network analytics, and network function virtualization (NFV), which will generate the need for adoption of software-defined networking to manage complicate networks.

Moreover, the popularity and adoption of software-defined wide area network (SD-WAN) and the application of software-defined networking technologies in WAN are increasing rapidly. Various businesses around the world are constantly seeking for ways to reduce physical technologies they are using, which is leading to the growing adoption of SD-WAN. 

In addition, the outbreak of the COVID-19 pandemic has resulted in upsurge in network traffic related to video conferencing, news sites, streaming services, and e-commerce websites with the growing demand for effective network infrastructure. Communications service providers (CSPs) are adopting technologies such as software-defined networking to prepare with the proper network capacity and tools to provide services into the foreseeable future and keep people connected.

The CXOs further added that the software-defined networking market is competitive and comprises number of regional and global vendors competing based on factors such as cost of solutions, reliability, processing time, and support services. The growth of the market is impacted by rapid advances in the network technologies offerings, whereas the vendor performance is impacted by government support toward the adoption of smart devices and data-driven technology to improve the services, COVID-19 conditions, and industry development. Owing to the competition, vendors operating in the market are offering advanced software-defined networking technology products and services to improve the network infrastructure. In addition, the software-defined networking market comprises many players ranging from start-ups to major telecom service operators. Large companies of telecom industry are keen on acquiring start-ups, which work on software-defined networking technology. These telecom operators are focusing on integrating various open-source software-defined networking platforms with their cloud computing platforms to better optimize and customize their network infrastructure.

Author Name(s) : Vikas Gaikwad & Rachita Rake | Onkar Sumant

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Software defined networking Market

Global Opportunity Analysis and Industry Forecast, 2020-2027