NFV Market to Grow 5-Fold Through 2019

18 August, 2015

The global network functions virtualization (NFV) hardware, software and services market to reach $11.6 billion in 2019, up from $2.3 billion in 2015

IHS: The global network functions virtualization H/S and services market to reach $11.6 billion in 2019, up from $2.3 billion in 2015

Telecom's classical model and NFV model. Source: Redhat
Telecom’s classical model and NFV model. Source: Redhat

The global network functions virtualization (NFV) hardware, software and services market to reach $11.6 billion in 2019, up from $2.3 billion in 2015. “NFV represents operators’ shift from a hardware focus to software focus, and our forecasts show this. We believe NFV software will comprise over 80 percent of the $11.6 billion total NFV revenue in 2019,” said Michael Howard, senior research director for carrier networks at IHS.

“The software is always a much larger investment than the server, storage and switch hardware, representing about $4 of every $5 spent on NFV,” he said. More highlights from IHS research: Service providers are still early in the long-term, 10-15 year transformation to virtualized networks; Revenue from outsourced services for NFV is projected to grow annually at a 71% from 2014 to 2019; Revenue from software-only video content delivery network (CDN) functions for managing and distributing data, is forecast to grow 30-fold from 2015 to 2019.

NFV Growth. Source: IHS
NFV Growth. Source: IHS

These projections goes hand in hand with previous studies of the market. In June 11, this year, IHS published the results of an in-depth interviews with telecom carriers around the world to determine their plans for NFV, and found that 35% are planning to deploy NFV in 2015, and 48% of carriers plan to evaluate NFV by the end of 2015.

“Though we’re still in the early stages of a long-term transition to NFV–SDN architected networks, many carriers will be moving from proof-of-concept tests and lab evaluations to commercial deployments of NFV in 2015,” said Howard. “In fact, all major operators are either now deploying NFV or plan to within the next few years. Providers believe that NFV and its SDN (software-defined networking) companion are a fundamental change in telecom network architecture that will deliver benefits in service agility and new revenue, operational efficiencies and capex savings.”

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