The global Software Defined Networking (SDN) market size was valued at USD 474.2 million in 2015. SDN entails the separation of the forwarding plane from the control plane in network architecture, which helps in the effective data flow control and provides network administrators with a software-based approach to manage the network. In comparison to the SDN that offers a centralized controller, in the traditional network architectures, each network device needs to be configured separately. As a result, there exists a high degree of dependency on the vendor-specific tools and instructions. Since SDN promotes flexibility and scalability in the network, along with helping streamline operations, it is increasingly being used by enterprises, telecom service providers, and cloud providers, among others.
Global software defined networking market, by services, 2014 - 2024 (USD Million)
Mobile Network Operators (MNOs) and cloud service providers have been garnering an increasing subscriber base since the majority of the population globally uses mobile devices. This trend is particularly prevalent in the emerging nations, which have witnessed a high demand for mobile phones, tablets, and mobility based devices, among others. The service providers need to ensure that their network is capable of handling the burgeoning number of users, which is made possible by SDN. Therefore, the growing need and demand for mobility are the key driving forces for the industry growth.
The SDN adoption has also been increasing in campus and enterprise segment as the demand for the efficient and flexible networks is high. SDN solutions, in conjunction with Network Function Virtualization (NFV) and open source technologies, are anticipated to gain traction in the industry. There has also been a growing interest and adoption in the data centers around the world as the demand for network management is high in the data center infrastructure. All these factors are creating an environment that is conducive to the industry growth.
Additionally, SDN facilitates the establishment of an efficient network and ensures virtualization, cloud services, agility, and so on, which is expected to propel the SDN market growth. The lack of standardization in the implementation and utilization of the technology may act as a restraint to the demand in the coming years.
End Use Insights
Enterprises are expected to remain the largest end-user segment over the forecast period; it accounted for over 42.8% of the global revenue in 2015. The key factors fueling the SDN adoption in the enterprise space include enhancing the overall infrastructure flexibility along with the need to reduce the time-to-market of various applications and services. In order for SDN to be deployed across the enterprise, it is crucial to ensure the complete knowledge of the implementation.
Telecommunications service providers are expected to be the fastest-growing segment at an estimated CAGR of 43.3% from 2016 to 2024. An increasing amount of stress on the existing telecom infrastructure and need to shape and control data traffic is fueling the telecommunication segments growth in the market.
The demand for agile, cost effective and efficient services is growing in the market as an increasing number of organizations shift toward virtualized environments. Managed services is the single, most dominant segment in the industry owing to the fact that they reduce complexity and offer lower costs to service providers. The emergence of software defined datacenter and hyper-convergence platforms may drive the market growth in the coming years.
An increasing number of organizations are opting for managed network functions such as traffic engineering, network analytics, and service optimization which is set to drive the demand growth. In addition, as the SDN technology is still in its evolving stage, the services sector will witness greater adoption than individual solutions in coming years.
SDN solutions are being adopted by numerous different industries to enhance their network capabilities. As the solutions offer CAPEX and OPEX cost-reducing capabilities to many organizations, its demand is anticipated to be high in the coming years. The IT and telecom industries led the market in terms of size whereas the consumer goods segment is predicted to be the fastest-growing segment.
As an increasing number of organizations move to the web-based applications and services, the need for better network architecture is eminent Low operational costs, holistic infrastructure management, abstraction and integration with cloud are some of the major factors contributing to the increasing adoption of software defined networking in diverse applications.
U.S. software defined networking market, by end use, 2015
SDN solutions primarily include physical network infrastructure, SDN controllers, and cloud virtualization as well as niche applications. The physical network infrastructure is expected to benefit from the industry growth as the software defined networking sprawls in the industry, the underlying network devices, and orchestrators networking by managing the flow control between the network devices and the application. It is expected to be the largest solution segment over the next eight years and accounted for over 57.94% of the overall revenue in 2015.
SDN controllers are also expected to witness significant growth in coming years owing to the developments in the southbound and northbound interfaces and related orchestration and management layers. Keeping in mind the rapid pace of developments in the market, the SDN implementation for security purposes at a very granular level may also see the light in coming years.
The North American region dominates the SDN market in terms of revenue share and is expected to maintain its position in the years to come, followed by the Asia Pacific region. The increasing adoption of the Internet, huge population, and technological developments taking place at a rapid rate are expected to help the industry growth.
Asia Pacific is expected to grow fastest in the coming years, owing to a large number of cloud-ready industries in the Asian subcontinent. In addition, benefits such as visibility, scalability, service quality, and cost effective security are driving the adoption of software-defined networking.
The industry is dotted with some major players including VMware, Alcatel-Lucent (Nokia), International Business Machines, Cisco Systems, and Juniper. Other prominent industry players are Plexxi, NEC Corporation, Google Inc., Huawei Corp., Hewlett-Packard, Brocade Communication Systems, Big Switch Networks, and AT&T, among others. The emergence of new companies that cater to a specific niche market or provide capabilities targeting particular functionalities is also on the rise.
New product development, industry players’ concentration on research and development activities, and developing cost effective products for a differential market are the major strategic plans adopted by the industry players. Also, there has been an increasing focus on the partnership and collaborations in the industry. For example, in March 2015, Brocade announced that it had completed the acquisition of the SteelApp business unit from Riverbed Technology. The SteelApp product line helped the Brocade data center deployments and enhanced the Vyatta Platform offering for NFV and SDN solutions.
Base year for estimation
Actual estimates/Historical data
2014 - 2015
2016 - 2024
Revenue in USD Million & CAGR from 2016 to 2024
North America, Europe, Asia Pacific, Latin America, and MEA
U.S., Canada, UK, Germany, India, Japan, China, Brazil, and Mexico
Revenue forecast, company ranking, competitive landscape, growth factors and trends
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Segments Covered in the Report
This report forecasts revenue growth at global, regional & country levels and provides an analysis of the industry trends in each of the sub-segments from 2015 to 2024. For the purpose of this study, Grand View Research has segmented the global software defined networking (SDN) market on the basis of end-use, services, solutions, application, and region:
End Use Outlook (Revenue, USD Million; 2014 - 2024)
Telecommunication Service Providers
Cloud Services Provides
Services Outlook (Revenue, USD Million; 2014 - 2024)
Integration and Deployment
Training and Maintenance
Solutions Outlook (Revenue, USD Million; 2014 - 2024)
Physical Network Infrastructure
Application Outlook (Revenue, USD Million; 2014 - 2024)
IT & Telecom
Government and Defense
Regional Outlook (Revenue, USD Million; 2014 - 2024)
Middle East & Africa (MEA)
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