To a large degree, adoption of VNFs is tied to deployment of NFV frameworks. While a VNF can be deployed in isolation, MANO capabilities provided by NFV frameworks will be critical when it comes to deploying VNFs at scale. Otherwise, VNFs are just a an instance of a virtual appliance. In fact, we see convergence between the NFV market and the general cloud market, and expect to see a blurring of what defines a VNF. For example, the difference between a virtual firewall running on Microsoft Azure versus a virtual firewall running on a vCPE in a small business subscriber of NFV services on a carrier network aren’t all that different. So far, it appears that some specialized telco VNFs require more sophisticated I/O handling than perhaps a virtual appliance for a public or private cloud, but the reality is that these are all network services and there’s increasingly more commonality in both application needs and infrastructure environments between a telco network and a cloud service provider like AWS, Google or Microsoft.
NFV Market Size Variations
Naturally, projections concerning NFV adoption range widely. IHS Markit estimates the global NFV market, which includes NFV hardware, software and services, will be worth $15.5 billion by 2020. IHS forecasts that in 2020, only 11 percent of NFV revenue will be attributable to new software and services. Sixteen percent will come from network functions virtualization infrastructure (NFVI) deployed as an alternative to network hardware. IHS says the remaining 73 percent will primarily consist of VNFs. That would suggest the size of VNF market will dwarf the NFVI market on which it depends in much the same way the market for software greatly exceeds the amount of hardware sold to run it.
Primary NFV Use Cases
A survey 159 networking professionals conducted by SDxCentral find that the primary use cases for NFV frameworks will involve vCPE environments (80%) followed by virtualized mobile cores (60%), IoT deployments (44%) service chaining within a Gi or SGi LAN (42%) and 5G networking infrastructure (40%).
Apart from the IoT and 5G use cases, which were new in the 2017 survey, the answers of end-user respondents this year were consistent with those of last year. We also saw consistency amongst the technology vendors, though they were a little more aggressive on the use of NFV in burgeoning 5G (49%) and IoT (47%) infrastructures.
The real issue, of course, will ultimately be the degree to which networking shifts from something deployed and managed by an internal IT organizations to service providers. While service providers today account for a large segment of the networking services consumed, there are still thousands of enterprise IT organizations buying everything from routers and switches to security appliances. VNFs that can be more easily managed using NFV frameworks should shift more of the total networking market in the direction of service providers. After all, service providers enjoy economies of scale by being able to aggregate the cost of delivering network services across multiple customers.