After speaking with executives from more than 20 Tier 1 service providers, Technology Business Research (TBR) predicts spending on network functions virtualization (NFV) and software-defined networking (SDN) to grow at a 94.3 percent compound annual growth rate from 2016 to 2022 to more than $168 billion.
“That is all-in,” said the research group’s senior telecom analyst Chris Antlitz. “It includes not only software and NFVI but also the full lifecycle of services required for SDN and NFV environments.”
Antlitz said TBR’s forecast might be higher than other analysts’ forecasts, which limit their taxonomy. TBR included four major categories of SDN and NFV: deployment, maintenance, professional services such as systems integration, and management of infrastructure.
A group of 20 to 25 Tier 1 operators have driven the vast majority of the NFV/SDN market spend thus far, according to TBR. And Tier 1 operators are expected to remain the key investors in network virtualization technology through the forecast period. At present, operators are using stand-alone NFV/SDN and legacy environments, concurrently.
TBR’s NFV/SDN Telecom Market Forecast mentions more than 20 operators, including AT&T, BT, CenturyLink, China Mobile, China Telecom, China Unicom, Comcast, Deutsche Telekom, Etisalat, KT, NTT, Orange, SK Telecom, SoftBank, Telefonica, Telecom Italia, Verizon, and Vodafone. All of the companies covered in TBR’s report have some kind of commercial implementation of NFV or SDN.
Antlitz called out Comcast in particular for doing some interesting virtualization work with internal teams working on new architectures. “Comcast: watch those guys,” he said. “They’re doing a lot and not talking a lot about it. They have AT&T and Verizon squarely in their sights, disrupting their [competitors’] business models with their own overlay services.”
“They have a fairly extensive distributed cloud nationwide, and they’ve been evolving their core network,” said Antlitz. “The low hanging fruit is disruptive services for enterprises. That’s where we see SD-WAN.”