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The virtual customer premises equipment market size is estimated to increase by USD 57.10 billion, at a CAGR of 70.51% between 2023 and 2028. The market's growth is driven by several critical factors. A key factor is the widespread adoption of network virtualization among enterprises. This technology allows for more flexible, scalable, and efficient network management, which is increasingly appealing to businesses seeking to optimize their IT infrastructure. Additionally, the efficient deployment of managed services is playing a significant role. As organizations look for ways to streamline operations and reduce overhead, managed services offer a cost-effective solution for managing complex network environments. Furthermore, the growing adoption of software-defined networking (SDN) and network functions virtualization (NFV) technologies is crucial. These innovations provide greater control, agility, and automation in network management, facilitating more dynamic and adaptable network architectures. Together, the shift toward network virtualization, the rise of managed services, and the integration of SDN and NFV technologies are key drivers behind the market's robust expansion.
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The market is revolutionizing IT infrastructure with its focus on virtual servers and desktops, enhancing service delivery and reducing maintenance costs. By leveraging virtualization technology, businesses can achieve efficient data virtualization, storage virtualization, and application virtualization. Virtual switches and virtual private network connectivity are crucial for seamless configuration and Firewall security, ensuring robust protection for hardware devices and existing services. Spiceworks highlights the growing adoption of desktop and data solutions that minimize physical hardware requirements while maintaining high performance. This shift towards virtualization technology allows organizations to streamline their IT operations, enhance service delivery, and lower operational expenses. As businesses continue to embrace virtualization, they benefit from improved flexibility and scalability, making vCPE a pivotal component of modern IT infrastructure.
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, align with market growth and trends, 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 on-premises segment will be significant during the forecast period. On-premises solutions are capable of providing a range of network services such as routing, firewall, switching, and various other applications. On-premises virtual customer premises equipment is primarily used because they offer better system security than cloud solutions. The deployment of virtual customer premises equipment requires robust IT infrastructure.
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The on-premises segment showed a gradual increase in the market share of USD 378.40 million in 2018. Additionally, the on-premises virtual customer premises equipment is priced as per the one-time perpetual license fee, including a recurring fee for support, training, and updates. In the on-premises model, hardware and software are handled on the premises of organizations, which provides them control over systems and data. Hence, the on-premises virtual customer premises equipment solution is preferred by some heavily regulated industries such as insurance, pharmaceutical, energy, telecommunication, and banking, among others that do not prefer to store their sensitive information in a public cloud environment.
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North America is estimated to contribute 39% 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 the growth of the virtual customer premises equipment (vCPE) market in the region during the forecast period.
The market forecasting 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 market forecast report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global 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 market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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The market is undergoing a significant paradigm shift driven by advancements in virtual desktop infrastructure (VDI) and network virtualization architectures. For medium-sized companies and small companies, vCPE offers a solution to manage network infrastructures with enhanced security and compliance. It mitigates security related concerns by addressing confidentiality, integrity, and availability issues. The deployment of vCPE and vEPC architecture integrates seamlessly with NFV infrastructure and virtual network infrastructures, optimizing network applications and digital devices. This approach reduces hardware dependence and supports cloud-based technologies, including Infrastructure as a Service (IaaS), Software as a Service (SaaS), and Platform as a Service (PaaS). Telecom service providers, mobile operators, and CSPs benefit from vCPE in managing the volume of enterprise traffic and data center resources. This shift supports the communications sector and smart city projects by ensuring reliable and secure internet connectivity and addressing network security services. The Coronavirus pandemic has accelerated the adoption of these solutions, underscoring the importance of cloud segment innovations and network function virtualization (NFV).
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Market Scope |
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Report Coverage |
Details |
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Page number |
175 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 70.51% |
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Market growth 2024-2028 |
USD 57.10 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
52.52 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 39% |
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Key countries |
US, China, UK, Germany, and Japan |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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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. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our market 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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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 Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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