International Data Corporation (IDC) estimates that revenues for the telecom network functions virtualization infrastructure (NFVI) market were just $564 million in 2017. But as service providers ramp up their network transformation, revenues are expected to achieve a compound annual growth rate of 58.1 percent over the 2017-2022 forecast period, reaching $5.6 billion in 2022.

IDC’s report, "Worldwide Telecom Network Functions Virtualization Infrastructure Forecast, 2018-2022," presents IDC's inaugural report for the NFVI market within the telecom sector.

In defining NFVI, IDC aligns with the European Telecommunications Standards Institute (ETSI) proposed architecture identifying five segments in carrier network infrastructure. Those segments are software-defined compute, networking, storage, management, and orchestration.

IDC expects the orchestration segment will be the fastest growing, driven by the need to orchestrate network services dynamically across an increasingly complex assortment of network functions – both physical and virtual.

“For purposes of this report, orchestration includes software used in service creation, operation, and lifecycle management by orchestration of virtual network functions across the end-to-end infrastructure,” said IDC analyst Rajesh Ghai in an email to SDxCentral. “An example would be ONAP.”

SDN is also likely to grow significantly, predicts IDC. This will be driven by the growing need to programmatically manage network flows in response to a dynamic environment – both within the telco cloud data center and across telco cloud deployments.

The compute and management segments will grow at a comparatively slower pace than the other segments, says IDC. For purposes of its report, management includes all virtual infrastructure management (VIM) software and cloud management software. An example would be OpenStack.

IDC says that from a domain perspective, wireless infrastructure is the largest contributor to the NFVI forecast today and will continue to be the largest contributor throughout the forecast, followed by virtual routing in edge and access use cases.