Due to the wide range of benefits that software-defined networking can offer businesses in nearly any industry, the technology has been experiencing growing adoption, creating a favorable market position. This trend of boosted implementation, especially within the telecom sector to improve service delivery, is poised to continue in the coming years.
SDN market research: Sector outlook
Recent market research shows considerable expansion in store for SDN technology in the near future.
According to an SDNCentral report, the market will reach an estimated $3.5 billion by 2015, and will continue to expand to ten times this size by 2018.
"The impact of software-defined networking will exceed $25 billion per annum by 2018, and could grow as high as $35 billion annually," the report stated. "Even conservative models show SDN-related spend exceeding 30 percent of total networking in that timeframe, with more aggressive models topping out at 40 percent."
An IDC report forecasted similar growth, noting that the global SDN market reached a value of $360 million last year. However, the sector will grow into a $3.7 billion industry by 2016, Network World's Jim Duffy reported. The rising market price during this period will come at a compound annual growth rate of 117.42 percent.
Driving factors leading to market growth
An SDNCentral infographic stated that enterprise networking spending on SDN technology will rise along with the market value. In 2013, only 2 percent of the total network budget was spent on SDN, but this will double to 4 percent this year. Furthermore, by 2016, this figure will reach 18 percent, and will continue to grow to 40 percent by 2018. This not only supports predictions for overall market value increases, but illustrates rising adoption levels as well, a main driving factor of SDN industry expansion.
As organizations increasingly demand cloud computing, big data analytics and mobility services, SDN will represent a viable solution for service providers to boost their delivery and address these needs. For example, within the telecom sector, a number of vendors have been implementing SDN to better manage their network resources while enhancing customers' experience with their services.
However, these rising adoption levels could cause interesting implications for SDN startups and established vendors, according to Duffy.
"Vendors like Cisco, with a dominant installed base and vast legacy infrastructure, are contemplating how to add more SDN-like programmability into switches and routers," Duffy wrote. "And while they grapple with that, start-up companies see an opportunity to attract customers looking for SDN solutions or vendors needing to offer some."
