IDC expects to see 16% CAGR for global telco cloud software market
Most telecom providers are still leaning on virtualized network workloads rather than fully cloud-native infrastructure, but 2024 could be a turning point, according to a new analyst report.
IDC expects that cloud-native deployment of telecommunications network works will accelerate this year, across the core transport, mobile infrastructure, mobile backhaul, access networks and customer premise equipment (CPE) segments.
Global revenue for telco cloud infrastructure software—encompassing virtual network functions (VNF), cloud-native network functions (CNF) and network functions virtualization infrastructure—will see more than a compound annual growth rate of more than 16%, IDC said, growing from $12.9 billion in 2022 to $27.3 billion in 2027.
“Most current telco workloads continue to leverage VNFs; however, as wireless, wireline, and other service providers turn their attention to cloud-native workloads, we expect the CNF market to grow rapidly,” IDC concluded. It also noted: “In a cloud-native world, the impetus is on comms service providers to deploy network functions across edge sites while continuing to manage a mix of core and edge sites on horizontal telco cloud platforms based on a common software foundation.”
“Adoption of cloud-native network functions is gaining momentum, with CNFs being deployed alongside virtual network functions across comms service providers’ cloud-based digital infrastructure for service agility, lower cost of ownership, and elastic scaling of the network,” said Ajeet Das, IDC’s research director for telecom network infrastructure. “However, these operators face a range of daunting challenges, including lack of in-house expertise in cloud-native orchestration and infrastructure, difficulty defining and implementing comprehensive security, and operational complexity of managing on-premises, cloud, and multi-cloud networks.”
