NFV Market On Track for $15.5B

NFV isn't a fad as new market forecast data predicts real revenues.

By Sean Michael Kerner | Posted Jul 20, 2016
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The Network Function Virtualization (NFV) market is one that is relatively new, having sprung up as an offshoot of the Software Defined Networking (SDN) space, just a few short years ago. NFV adoption is growing rapidly and according ot a new report from IHS Markit, the NFV market is forecast to generate $15.5 billion in revenue by 2020.

According to IHS Markit, the NFV market is already generating revenue with 2015 NFV revenues pegged at $2.7 billion.

NFV by definition, is all about moving network functions, that traditionally had been siloed and perform on hardware, to more agile software-based virtualization platforms. It's not surprise then that IHS Markit is forecasting that 80 percent of NFV's projected 2020 revenues will be from software related expenditures.

"The service provider NFV market is larger than the software-defined networking (SDN) market throughout our forecast horizon of 2020, due to the pre-existing and ongoing VNF market,” Michael Howard, Senior Research Director, Carrier Networks, at IHS Markit, said in a statement. "We expect strong growth in NFV markets in 2020 and beyond, driven by service providers’ desire for service agility and operational efficiency."

In contrast to the forecast market size for NFV, earlier this year research firm IDC reported that it is projecting that the SDN market will generate $12.5 billion in revenue by 2020.

One of the big factor at play for NFV is the fact that some of the largest and most influential service providers in the world are rapidly moving to virtualize their networks. In March of this year, AT&T proclaimedthat 75 percent of its massive network would be virtualized by 2020.

Among the key enablers for NFV has been open-source software and specifically the OpenStack cloud platform. At the recent OpenStack Summit eventin Austin Texas, multiple service providers including AT&T, Verizon and NTT detailed their use OpenStack to enable NFV in their operations.

Back in January, the OpenStack Foundation releaseda 24 page report outling how NFV and OpenStack work together.

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and Follow him on Twitter @TechJournalist

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