Research firm IHS Markit predicts 80% of NFV spend by carriers to be on software, with VNFs garnering significant investments
A new report from IHS Markit predicts the service provider network functions virtualization market, including hardware, software and services, will surge from $2.7 billion in 2015, to $15.5 billion by 2020.
The prediction, which is part of the research firm’s latest “NFV Hardware, Software and Services Annual Market Report,” noted NFV software will comprise 80% of the $15.5 billion total, “or around $4 out of every $5 spent on NFV.” In addition, the firm claims 11% of NFV revenue will come from new software and services; 16% will come from NFV infrastructure, which includes servers, storage and switches purchased in place of purpose-built network hardware; and 73% will come from existing marketing segments, primarily from virtual network functions.
The latest prediction is also said to take into account service provider spend on hardware and software to deliver software-based services to customers using virtual customer premise equipment and enterprise VCPE use cases, which is forecast to hit $1.5 billion worldwide by 2020.
Michael Howard, senior research director for carrier networks at IHS, said the market will continue to outpace the software-defined networking market through its latest forecast period.
“The service provider NFV market is larger than the software-defined networking market throughout our forecast horizon of 2020, due to the pre-existing and ongoing VNF market,” said Howard. “We expect strong growth in NFV markets in 2020 and beyond, driven by service providers’ desire for service agility and operational efficiency.”
IHS last year predicted the market would surge from $2.3 billion in 2015, to $11.6 billion in 2019.
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