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The Network Function Virtualization (NFV) Market size is forecast to increase by USD 49.79 billion. The market is estimated to grow at a CAGR of 24.39% between 2022 and 2027. The growth of the market depends on several factors, including the advances in network infrastructure, the increase in the number of smart-connected devices, and the high penetration of wireless network infrastructure. Network Function Virtualization is a network architectural concept that uses IT virtualization technologies to virtualize entire classes of network node functions into building blocks linked or chained together to create and deliver communication services. Traditional server-virtualization approaches, such as those used in enterprise IT, are used in NFV.
This market research and growth report also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The high penetration of wireless network infrastructure is driving growth in the market. The spread of the Internet around the world has never been at an ever higher level since the contemporary world. The ever-increasing Internet and wireless broadband penetration across verticals is the primary driver of the global market as it is driving the proliferation of the social and mobility phenomenon across enterprises.
However, the entire digital system is implemented in a way to incentivize the consumer fairly in the consumption of digital products and services. The increasing construction of data centers for the storage of data over the network requires NFV and SDN. Hence, the adoption of sophisticated NFV technologies is driven by these business transformations across vertical segments, which will boost the growth of the global market in focus during the forecast period.
The rising adoption of BYOD is a key trend in the market. Due to the preferences of employees for using their smartphones, tablets, and portable computers on the job, enterprise mobility has taken a prominent place in corporate life. The bring your own devices (BYOD) policy demands specific network services and IT service delivery frameworks to guarantee electronically secure and productive work environments.
Moreover, vendors are providing NFV solutions to implement the BYOD program successfully by offering an environment in which the workforce of an organization can use their personal devices through robust Internet connectivity. In order to achieve better efficiency, this will be complemented by reducing traffic on the network, which will have a positive impact on the growth of the global market during the forecast period.
Data privacy and security concerns is a major challenge faced by the NFV market. More security and data breach problems have been caused by increasing connectivity and data sharing. Earlier, cybersecurity was concentrated on a limited number of connected devices. However, due to the IoT revolution, there will be a large-scale combination of both physical and virtual worlds.
Therefore, the fear of cyber attacks can hamper the sensor and device data in an industrial setup. This data is accessible on the internet and should be authenticated by means of an authentication layer. The possibility of cyber intrusion will result in less uptake of network services, which may hamper the growth of the global market in focus during the forecast period.
The market share growth by the solution segment will be significant during the forecast period. The adoption of NFV eliminates the use of hardware appliances by replacing the latter with virtual software and infrastructure provided by vendors. This software enables networks to provide on-demand services, by adopting it from telecom providers., which is comparatively difficult while using physical hardware appliances.
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The solution segments showed a gradual increase in the market share of USD 8.08 billion in 2017 and continued to grow by 2021. NFV deployments also include SDN controllers, where both SDN and NFV technologies will enhance the control of the deployed virtual services. The NFV market will experience massive growth during the forecast period after the commercial deployment of 5G technologies because in order to use an agile network and provide on-demand services, there is a growing need for Virtual Network Functioning Platforms and Management Software.
The IT and telecom segment will grow at a higher pace compared with the global average rate during the forecast period. This is mainly due to the adoption of new network technologies such as 4G and 5G, as well as the need to manage the network systems according to strategic business requirements and strict government laws. In order to stay competitive in their business, the adoption of telecommunications network services by organizations is expected to increase with regard to performance and effectiveness as well as improved communication between networks. Consumers are likely to play a vital role in the growth of IP traffic owing to the increased digitalization and connected devices powering smart connectivity which will have a positive impact on the growth of the global NFV market during the forecast period.
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North America is estimated to contribute 37% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. In this region, the demand for developing network infrastructure by firms to gain a competitive edge in the market and its increasing network infrastructure complexity are key enablers of the NFV market. Due to competition between different network functions and virtualization providers, companies have been improving their products in order to maintain a market share. The adoption of NFV in North American countries such as the US and Canada is the highest in the region. Such factors will increase the market growth in this region during the forecast period.
In 2020, the region was adversely affected by the COVID-19 pandemic, which led to the temporary closure of several commercial spaces, such as offices and retail outlets. In 2021, large-scale vaccination drives initiated by the governments across various countries of the region resulted in the lifting of lockdown restrictions. Since many organizations are currently discussing the possibility of providing permanent work-from-home policies to their employees., the demand for NFVs in the region is expected to grow during the forecast period.
This market growth and trends report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Network Function Virtualization Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
6WIND - The company offers network function virtualization such as 6WIND virtual accelerator software used in Network function virtualization infrastructure, data center virtualization, or Network appliance virtualization.
A10 Networks Inc. - The company provides computer networking products and security solutions such as controllers, firewalls, hardware appliances, protection systems, and other networking products.
Ciena Corp. - The company offers network function virtualization which includes reduces cost and accelerates service deployment for network operators by moving functions such as firewalls and encryption from dedicated hardware to commodity servers.
This market forecast report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The Global Network Functions Virtualization Market is experiencing rapid growth driven by the increasing demand for telecom equipment and services and the adoption of network automation. Virtualization technology and cloud services enable organizations to achieve data center consolidation and enhance security agility. NFV solutions play a crucial role in facilitating cloud migration and supporting IoT deployments while ensuring network devices' efficiency. Advanced technologies like artificial intelligence (AI) and SD-WAN further enhance NFV capabilities, offering wide area network (WAN) configurations and VPN services. The market caters to various sectors, including IT and telecommunications, banking, financial services, insurance (BFSI), hospitality, transportation, logistics, manufacturing, healthcare, education, retail, energy, and utilities, as well as media and entertainment industries.
This report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Network Function Virtualization Market Scope |
|
Report Coverage |
Details |
Page number |
176 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 24.39% |
Market growth 2023-2027 |
USD 49.79 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
22.96 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
North America at 37% |
Key countries |
US, Canada, China, Germany, and the UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
6WIND, A10 Networks Inc., Access Co. Ltd., Ciena Corp., Cisco Systems Inc., Cloud Software Group Inc., Dell Technologies Inc., Fortinet Inc., Fujitsu Ltd., Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., Intel Corp., International Business Machines Corp., Juniper Networks Inc., Nokia Corp., Oracle Corp., Radware Ltd., Sandvine Corp., Telefonaktiebolaget LM Ericsson, and Ekinops SA |
Market dynamics |
Parent market analysis, Market Growth and Trends, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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