Network functions virtualization (NFV) is set to take off as more cloud-based architectures are hitting the market with the promise of delivering carrier-grade service quality. According to a recent forecast by Ovum, NFV equipment, software, and services will grow from an $11 billion business in 2017 to a $48 billion business in 2023.
Ovum Principal Analyst Stephanie Gibbons said that as operators begin to deploy 5G they realize that NFV integration is a critical part of it. “5G networking is just around the corner, with commercialization slated for 2020, so NFV integration is more critical this year than ever,” Gibbons said.
Gibbons said that Ovum’s research found that Tier 1 operators in North America and Asia Pacific are leading in NFV deployments. In the U.S., Tier 1 operator AT&T has been particularly vocal about its virtualization goals. The company said at year-end 2017 that it had virtualized more than 55 percent of its network and plans to have 75 percent of its network virtualized by 2020.
However, Gibbons added that Ovum expects NFV to pick up speed as vendors introduce more automation in their NFV product portfolios. And it believes that smaller operators will start to appreciate NFV more as they struggle with the costs and constraints of legacy equipment.