Software Defined Networking (SDN) Market Report

Software Defined Networking (SDN) Market Analysis By End-Use (Enterprise, Telecommunication Service Provider, and Cloud Service Provider), By Service (Integration and Deployment, Training and Maintenance, and Managed Services), By Solution (Physical Network Infrastructure, Virtualization/Control Software, and SDN Application), By Application (BFSI, IT and Telecom, Consumer Goods, Government and Defense, Healthcare, and Others), And Segment Forecasts To 2024

Published: October 2016  |  100 Pages  |  Format: PDF  |  Report ID: 978-1-68038-114-6

"The growing demand for the agile, faster, and scalable network infrastructure is anticipated to fuel the market growth in the coming years."

Software Defined Networking (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 this technology 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 software defined networking 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.

Mobile Network Operators (MNOs) and cloud service providers have been garnering an increasing subscriber base since 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 using this technology. Therefore, the growing need and demand for mobility are the key driving forces for the market. Additionally, the technology facilitates the establishment of an efficient network and ensures virtualization, cloud services, agility, and so on, which is expected to propel the market growth. The lack of standardization in the implementation and utilization of the technology may act as a restraint to the market in the coming years.

The adoption of this technology has also been increasing in campus and enterprise markets 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 market growth.

Global SDN market by region, 2014 - 2024 (USD Million)

Global SDN market

"SDN is playing a vital role in enhancing the carrier network performance and reducing costs."

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 adoption of this technology 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.

"The emergence of software defined datacenter and hyper-convergence platforms may drive the market growth in the coming years."

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.

"Business requirements are centered around IT efficiency and agility to overcome the hardware issues to propel the demand for SDN solutions."

Software Defined Networking solutions primarily include physical network infrastructure, controllers, and cloud virtualization as well as SDN 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.

"As an increasing number of organizations moves to the web-based applications and services, the need for better network architecture is eminent."

SDN solutions are being adopted by numerous different industries to enhance their network capabilities. As the technology offers CAPEX and OPEX 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.

"Benefits such as visibility, scalability, service quality, and cost effective security are driving the adoption of software defined networking."

The North American region dominates the 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 Asia Pacific region grow at the highest growth rate.

"A number of solution providers that offer differentiated products exist in the market."

The industry is dotted by 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.

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