The global network function virtualization market is likely to register growth over the forecast period, driven by growing demand for managing and deploying networking services. Network function virtualization (NFV) decouples network functions such as firewalls, Network Address Translation (NAT), Domain Name Service (DNS), and intrusion detection. The mobile sector has witnessed more requirements for data-intensive applications, which further demands better network capacity to meet the customer requirements, which is anticipated to fuel the NFV market growth. Reducing power, cooling, and spacing requirements of equipment and simplifying management of network services have significantly encouraged the NFV market demand. Increasing need for cloud-based services and demand for data-intensive applications is projected to favor market demand. Additionally, technological advancements and usage of routers, switches, mobile edges, and optical transport owing to enhanced performance and lowering costs are expected to boost the NFV market over the forecast period. NFV is a core structural change in the way a telecommunication infrastructure is deployed and brings a considerable change in the way applications are delivered to the service providers.
Network function virtualization is expected to replace traditional network functions such as DHCP, DNS, and IPAM owing to decreasing costs and enhanced performance of telecom service providers. Technological advancements aimed at managing images, folders, programs, and files from a single physical site are anticipated to boost the network function virtualization market demand. Increasing need for faster networks is posing challenges to market growth as network monitoring, the management or security tool unable to operate at 40Gbps or 100Gbps. Network visibility controllers also known as network packet brokers deal with this challenge by filtering, capturing, optimizing, and aggregating traffic, which enables 1Gbps or 10Gbps performance management and security systems to run on 40Gbps or 100Gbps networks.
The Network Function Virtualization (NFV) market is segmented on the basis of application as traffic analysis, switching elements (routers), security function, next-generation signaling, and service assurance. Fuelled by high demand in the U.S., North America is expected to emerge as a key regional NFV market. Increasing demand and popularity in China and India are expected to drive growth across the Asian market.
Some of the major players in the Network Function Virtualization market include Alcatel-Lucent, Ericsson AB, 6Wind SA, Huawei Technologies Co. Ltd., Amdocs Inc., Nokia Solutions and Network, CIMI Corporation, Connectem Inc., Intel Corporation, ConteXtream Inc., Juniper Network Inc., F5 Network Inc., Open Wave Mobility Inc., NEC Inc., Opera Software, HP and Oracle Corporation. Increased R&D spending is expected to be a key growth strategy adopted by industry participants. For example, Intel Corporation developed a technology that enables modems to act as virtual servers. Market participants are focused on strategies such as collaboration, merger & acquisition to enter a new market along with new product development, increased R&D spending, and innovation in order to establish a foothold in the market.
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In order to ensure business continuity amidst the COVID-19 crisis, business organizations, especially in highly affected countries are allowing their employees to work from home. The increase in people working from home has led to a surge in demand for online video viewing, downloading, and communication through video conferencing, all of which are leading to increased network traffic and data usage. COVID-19 shall accelerate the demand for agile and flexible work styles and further push the adoption of communication services that tend to improve work-life balance. On the flip side, telecom regulators worldwide have postponed their plans of 5G spectrum auction amidst the global pandemic. This is expected to have an impact on the commercialization of commercial 5G standalone deployments and revenue generated through 5G services. The ongoing pandemic has forced telecom operators worldwide to test their network resiliency and revisit their planned investments, especially in 5G technology. The report will account for Covid19 as a key market contributor.