NFV Market on Pace to Hit $11 Billion

Network Functions Virtualization (NFV) is going to be a big market in 2018, according to some forecasts.

By Sean Michael Kerner | Posted Nov 7, 2014
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Just a few short years ago, the term NFV--or Network Functions Virtualization--was unheard of. Software Defined Networking (SDN) was all the rage, offering the promise of networking capabilities that are more agile and user-definable in software, separate from hardare.

The promise of NFV is more specific and apparently more lucrative, too. With NFV, traditional network functions-- things like DNS, DHCP and IPAM--get abstracted away from hardware and run entirely virtualized.

A new report from Infonetics Research is now putting a big number on the combined NFV and SDN marketplace. The market had revenue of $500 million in 2013 and is forecasted to grow to $11 billion by 2018.

"For three years, the telecom industry has been abuzz over SDN and NFV, with anticipation and hard work developing the vision, goals, architectures, use cases, proof-of-concept projects, field trials, and even some commercial deployments," Michael Howard, Infonetics Research's co-founder and principal analyst for carrier networking, said in a statement.

To be fair, Infonetics is not projecting $11 billion in net new revenue. In fact, net new SDN and NFV and software revenue will only represent 20 percent of the 2018 total. An additional 12 percent of the $11 billion revenue in 2018 comes from displacement. That is revenue for NFV hardware infrastructure that would have otherwise gone to a different technology.

That said, 68 percent of revenue will be new and from new markets, including virtualized network functions (VNFs).

The march toward NFV might also be aided by new efforts, including the recently announced Open Platform for NFV (OPNFV) project. OPNFV is a Linux Foundation Collaboration project, and its membership roster reads like a who's who of the networking world. The founding members of OPNFV span service providers, hardware suppliers and software vendors and includes: AT&T, Brocade, China Mobile, Cisco, Dell, Ericsson, HP, Huawei, IBM, Intel, Juniper Networks, NEC, Nokia Networks, NTT DOCOMO, Red Hat, Telecom Italia, Vodafone, 6WIND, Alcatel-Lucent, ARM, Broadcom, CableLabs, Cavium, CenturyLink, Ciena, Citrix, ClearPath Networks, ConteXtream, Coriant, Cyan, Dorado Software, Ixia, Metaswitch Networks, Mirantis, Orange, Sandvine, Sprint and Wind River.

NFV-related activities are also very strong with the OpenStack cloud community, with multiple ongoing strategic efforts.

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

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