IHS Technology analysis and commentary on the Carrier SDN Hardware, Software, and Services Annual Market Report follows.
For the past several years, the telecom industry has been moving toward a major network and operational transformation epitomized by software-defined networking (SDN) and network functions virtualization (NFV) with the top goals of automation and service agility.
Carriers have defined the vision, goals and architectures and are progressing through use cases, proof-of-concept projects, field trials and a small but growing number of commercial deployments. The partially proven promise keeps the industry moving as fast as it can, but we are still early in this long-term, 10- to 15-year transformation of service provider networks.
SDN deployments started in Japan with NEC and NTT, and the country has been active in deploying real but small commercial deployments. China is coming on strong, with many sizeable commercial deployments in 2015 and 2016. And service providers in North America and Europe are also leading the charge to deploy SDN, and are anticipated to account for 13 percent of total 2015–2020 SDN revenue.
Given these factors, the service provider SDN market, including hardware, software and services, is forecast to grow from $289 million in 2015 to $8.7 billion in 2020, with a 2015–2020 compound annual growth rate (CAGR) of 98 percent.
Additional Carrier SDN Market Highlights
- SDN and NFV represent the shift from a hardware focus to software one: Software and outsourced services will comprise 46 percent of SDN revenue in 2020
- SDN orchestration and controller software revenue is forecast to grow to over $1.8 billion in 2020
- But by 2020, there will be more value in SDN apps than in orchestration and control, which will be priced reasonably due to competitive pressure
Carrier SDN Report Synopsis
The annual IHS carrier SDN market size and forecast report examines the markets and trends related to building service provider software-defined networks. Specifically, the report tracks software that provides orchestration, controller and application functions; outsourced services for SDN projects; and hardware in use for SDN networks, including routers, switches, wavelength-division multiplexing (WDM) and video content delivery network (CDN) equipment, and other telecom equipment controlled by SDN orchestration and controllers, such as customer premises equipment (CPE).
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