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The virtual customer premises equipment (vCPE) market size is estimated to to increase by USD 13,106.69 million, growing at a CAGR of 40.77% between 2022 and 2027. The growth of the market depends on several factors, including the adoption of network virtualization among enterprises, the efficient deployment of managed services, and the growing adoption of software-defined networking (SDN) and network functions virtualization (NFV) technologies. Virtual customer premises equipment is a technology that allows businesses to replace physical network equipment, such as routers and firewalls, with virtualized software running on commodity hardware. Virtual customer premises equipment provides the same functionality as traditional infrastructure but with increased flexibility and cost savings.
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Efficient deployment of managed services is the key factor driving the growth of the market. By leveraging customer virtual premises appliance solutions and managed services, a multinational organization can deploy a centralized IT infrastructure through cloud-based virtual appliances. These virtual appliances can easily be provisioned and managed remotely by a managed service provider (MSP), eliminating the need for on-premises hardware and dedicated IT teams in each office. Furthermore, the use of managed services allows for seamless upgrades and maintenance across the customer's network of virtual premises.
Additionally, managed service providers typically provide proactive monitoring and support services that proactively monitor the performance and security of a customer's virtual base device network. This proactive approach helps optimize the performance of a customer's premises equipment network, minimize downtime, and improve the overall user experience. Therefore, these factors are expected to increase the demand for virtual customer premises equipment, which will boost the growth of the market during the forecast period.
An increase in the adoption of cloud-based services is the key trend shaping the growth of the market. One of the key advantages of cloud-based services in the global virtual customer base appliance market is the flexibility they offer. With cloud-based virtual customer base equipment, businesses can easily scale up or down their services, depending on their needs. This means they can react quickly to changing business needs and adjust their infrastructure accordingly. Another advantage of cloud-based services in the global virtual customer premises equipment (vCPE) market is the cost-effectiveness they offer.
Furthermore, with a cloud-based customer virtual facility, businesses can quickly and easily create new virtual instances or modify existing ones to meet their ever-changing needs. This capability allows companies to stay ahead of their competitors by quickly launching new services or adapting their existing ones. Therefore, such factors are expected to increase the adoption of cloud-based customer premises equipment, which will drive the growth of the global virtual customer premises equipment market during the forecast period.
The lack of standardized protocols and interoperability among different virtual customer premises equipment companies affects the growth of the market. In virtual customer premises equipment, standardized protocols ensure that one company's virtual customer base appliance solution can interoperate and work with other company's solutions without any problems. However, the absence of such standardized protocols creates compatibility issues and limits the flexibility of device deployment within the virtual customer base and this affects the growth of the virtual customer premises equipment market.
Moreover, in the case of equipment with a virtual customer base, interoperability issues arise when solutions from different players cannot work seamlessly with each other. This can lead to a fragmented network environment where different parts of the network are handled by separate virtual customer premises equipment solutions, resulting in increased complexity and decreased efficiency. Therefore, these factors are expected to impede the growth of the market during the forecast period.
The market share growth by the large enterprises segment will be significant during the forecast period. Large enterprises have a high demand for advanced networking solutions to support their operations globally. With the rise of digital transformation and growing demand for flexible and cost-effective networking solutions, virtual customer-base appliances have captured the attention of large enterprises.
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The large enterprises segment showed a gradual increase in the market share of USD 229.82 million in 2017 and continued to grow by 2021. An example of a large company benefiting from a virtual customer base appliance is a multinational corporation with offices and branches spread across different countries. Traditionally, these businesses would need on-site physical hardware in each location to manage their networking needs. However, with appliances at a virtual customer base, they can centralize their network control and management functions in a virtualized infrastructure. Such factors will increase the segment growth during the forecast period.
The market share growth by the on-premises segment will be significant during the forecast period. On-premises solutions are capable of providing a wide range of network services such as routing, firewalls, switching, and more. Deploying virtual appliances on customer premises requires robust IT infrastructure. By equipping a customer's on-premises virtual facility, network administrators can more efficiently manage remote network resources, reduce overall maintenance costs, and improve network security and performance. Moreover, the on-premises virtual customer premises equipment pricing is consistent with a one-time lifetime license fee, including recurring fees for support, training, and updates. In the on-premises model, hardware and software are managed on-premises by the organization, giving them control over systems and data. As a result, on-premises virtual customer base appliance solutions are preferred by a number of highly regulated industries such as insurance, pharmaceuticals, energy, telecommunications, and banking. Hence, such factors will drive the growth of the market during the forecast period.
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North America is estimated to contribute 41% 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. One of the main reasons for the growing demand for IaaS in the region is the increase in demand for cloud computing services, which further drives the demand for data centers and storage space. Growing investment in communication network infrastructure is one of the key market growth factors in North America.
Furthermore, the growth of enterprise IT spending in cloud computing strategies is another reason for the growth of the regional market. Most businesses in the region run their applications on the cloud. The availability of advanced technology infrastructure and the presence of multiple cloud service providers such as Microsoft Corp. (Microsoft), Salesforce.com Inc. (Salesforce), Oracle, and Adobe Inc. (Adobe) is expected to continue to accelerate the transition to cloud-based applications. These factors have led to an increase in SD-WAN adoption by businesses in North America, which will drive demand for virtual customer premises equipment (vCPE) market in the region during the forecast period.
The Virtual Customer Premises Equipment (vCPE) Market 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 Virtual Customer Premises Equipment (vCPE) 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.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 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 Virtual Customer Premises Equipment (vCPE) Market leverages computing technologies to provide virtual servers, desktops, and data virtualization solutions to organizations. A 2020 State of Virtualization Technology survey by Spiceworks highlights the growing adoption of virtualization, particularly among small to medium-sized businesses (SMBs). Benefits include reducing server sprawl and leveraging virtual desktop infrastructure (VDI) for cost-effective solutions. However, security concerns in network virtualization restrain market growth, emphasizing the need for robust security measures. Opportunities lie in reducing hardware dependency and addressing challenges related to the shortage of skilled workforce in traditional CPE environments. Deployment of vCPE requires knowledge in virtualization technology and architectures, with cloud-based solutions and 5G on-demand slicing driving innovation in the communications sector.
The market 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.
Virtual Customer Premises Equipment (vCPE) Market Scope |
|
Report Coverage |
Details |
Page number |
164 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 40.77% |
Market growth 2023-2027 |
USD 13,106.69 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
47.06 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 41% |
Key countries |
US, China, Japan, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Adtran Holdings Inc., Amdocs Ltd., Arista Networks Inc., Aryaka Networks Inc., Broadcom Inc., Ciena Corp., Cisco Systems Inc., Citrix Systems Inc., Dell Technologies Inc., Fortinet Inc., Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., International Business Machines Corp., Juniper Networks Inc., NEC Corp., Nokia Corp., RAD Data Communications Ltd., Riverbed Technology Inc., Telefonaktiebolaget LM Ericsson, Verizon Communications Inc., Versa Networks Inc., and ZPE Systems Inc. |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for 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. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Deployment
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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