The Global Network Functions Virtualization Market size is expected to reach $94.1 billion by 2028, rising at a market growth of 24.8% CAGR during the forecast period.
Network functions virtualization, or NFV, can be defined as a network architecture concept that leverages IT virtualization technologies in order to virtualize entire sections of network node functions into building blocks that can be connected to each other or chained together to produce and deliver communication services. NFV depends on conventional server virtualization strategies, like those employed in enterprise IT.
Instead of using specialized hardware appliances for every network function, a virtualized network function, or VNF, is deployed within one or even more virtual machines or containers that are each running different software and processes on top of high-volume commercial off-the-shelf (COTS) servers, switches, storage devices, and cloud computing infrastructure. This prevents vendor lock-in. For instance, to safeguard a network, a virtual session border controller can be used instead of actual network protection units, which are typically more expensive and complicated to buy and install.
Other NFV examples include virtualized firewalls, load balancers, WAN accelerators, and intrusion detection systems, to mention a few. By separating the network function software from the specialized hardware platform, a flexible network architecture is realized, allowing for rapid service rollouts, agile network administration, and a significant decrease in CAPEX and OPEX. With the help of NFV, communication services may be separated from specialized hardware like routers and firewalls.
Because of this division, network operations can offer new services on demand and without buying new hardware. With network functions virtualization, network components can be deployed in a matter of hours as opposed to months as with conventional networking. Additionally, rather than using expensive proprietary hardware, the virtualized services can function on less expensive generic servers. Network function virtualization essentially takes the role of the features offered by separate hardware networking components.
The IT and telecommunications sector, among others, was severely impacted by countermeasures including blockades, social isolation, and quarantine to combat the infection, due to which, the utilization of network functions virtualization software was reduced in the sector. For several months, various manufacturing facilities were shut down, which had a negative impact on the supply chain, the ability to import and export end devices, as well as the production, sales, and operations of the sector. The network functions virtualization market and revenues were impacted by supply chain disruptions and delays in the introduction of 5G standards. Due to this, the market was negatively impacted by the emergence of the pandemic. Hence, the market is estimated to recover from the impact of the COVID-19 pandemic in the coming years.
The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The below illustration shows the percentage of revenue shared by some of the leading companies in the market. The leading players of the market are adopting various strategies in order to cater demand coming from the different industries. The key developmental strategies in the market are Acquisitions, and Partnerships & Collaborations.
Carriers must offer more bandwidth at a reduced price. However, high bandwidth requirements or on-demand services were not incorporated into traditional carrier networks. Additionally, it is costly, complicated, and ineffective to attempt to improve already-existing hardware-based networks. As a result, carrier income is now growing slower than networking costs. Additionally, this is not a long-term business strategy. By separating network software from hardware, network functions virtualization solutions are intended to assist carriers in moving away from proprietary network hardware, which considerably reduces costs and improves service agility.
NFV's benefits and concepts are straightforward, but putting it into practice becomes more difficult. This is due to the fact that NFV requires some level of engagement and collaboration between different network solution suppliers and network operators in order to fully benefit from it. Industry associations can help in such situations. Industry Specification Group, or ISG, for NFV, is being formed by the top network operators all over the world at a very rapid speed. Even while there is a lot of interest in the efforts of such associations to define the NFV framework, it is just one of many aspects in this rapidly expanding sector of industry development.
What will happen to their job if their assets are unavailable is the biggest concern that many people have about virtualization. An organization would find it difficult to compete in its business if it is unable to access its data for an extended length of time. Additionally, since availability is managed by outside providers, virtualization does not provide users control over their ability to maintain connectivity. Although virtualization makes it possible to expand a business or prospect quickly, users might not be able to do so as quickly as they consider. A virtualized network experiences lag as a result of growth since numerous entities share the same resources.
On the Basis of Component, the Network Functions Virtualization Market is bifurcated into Solutions and Services. In 2021, the solution segment acquired the largest revenue share of the network function virtualization market. The growth of the segment is ascribed to the rising adoption of automation and virtualization technologies. The need for mobility services is predicted to increase, and businesses' significance in lowering operating costs through NFV is expected to expand. The solution consists of orchestration and automation as well as additional elements like virtual infrastructure managers, SDN controllers, NFV orchestrators, and WAN configurations.
Based on the Organization Size, the Network Functions Virtualization Market is divided into Small & Medium Enterprises and Large enterprises. In 2021, the large enterprises segment witnessed the biggest revenue share of the network functions virtualization market. The growth of the segment is rapidly expanding as network operations, virtualization tools, and services are becoming more widely used by large businesses. The need for network functions and virtualization solutions and services is also being driven by major organizations because they are the early adopters of cutting-edge technologies like virtualization, orchestration, and automation.
By Application, the Network Functions Virtualization Market is classified into Virtual Appliance and Core Network. In 2021, the core network segment registered a substantial revenue share of the network functions virtualization market. The growth of this segment is being driven by the complexity of complex networks and the rising demand for network virtualization and automation. Network functions like security monitoring, traffic forwarding, domain name services, as well as intrusion detection systems are typically included in the core network.
Based on End-User, the Network Functions Virtualization Market is segregated into Service Providers, Data Centers, and Enterprises (BFSI, Healthcare, Retail, Manufacturing, Government and Defense, Education, and Others). In 2021, the enterprise segment witnessed a substantial revenue share of the network functions virtualization market. Because NFV offers substantial advantages including centralized administration for network efficiency, IT agility, and quick and dependable application services for network adaption, enterprise customers are majorly adopting this solution in order to grow their business. Therefore, this factor is propelling the growth of this segment of the market.
| Report Attribute | Details |
|---|---|
| Market size value in 2021 | USD 20.3 Billion |
| Market size forecast in 2028 | USD 94.1 Billion |
| Base Year | 2021 |
| Historical Period | 2018 to 2020 |
| Forecast Period | 2022 to 2028 |
| Revenue Growth Rate | CAGR of 24.8% from 2022 to 2028 |
| Number of Pages | 322 |
| Number of Tables | 541 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Market Share Analysis, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Companies Strategic Developments, Company Profiling |
| Segments covered | Component, Organization Size, Application, End User, Region |
| Country scope | US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria |
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| Restraints |
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Region-Wise, the Network Functions Virtualization Market is analyzed across North America, Europe, Asia-pacific, and LAMEA. In 2021, North America accounted for the biggest revenue share of the network functions virtualization market. The adoption of technologies, like cloud computing, Software Defined Everything (SDx), and IoT is increasing, driving the growth of the regional market. The rapid expansion of numerous sectors has been facilitated by the high level of industrialization in countries, such as the United States and Canada. Moreover, the regional NFV sector is growing as a result of the favorable standards and laws in North American nations.
Free Valuable Insights: Global Network Functions Virtualization Market size to reach USD 94.1 Billion by 2028
The major strategies followed by the market participants are Partnerships and Acquisition. Based on the Analysis presented in the Cardinal matrix; Intel Corporation and Huawei Technologies Co., Ltd. are the forerunners in the Network Functions Virtualization Market. Companies such as Hewlett Packard Enterprise Company, Oracle Corporation, Ericsson AB are some of the key innovators in Network Functions Virtualization Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Intel Corporation, Oracle Corporation, Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.), Ericsson AB, Hewlett Packard Enterprise Company, Juniper Networks, Inc., NEC Corporation, Amdocs Limited, F5 Networks, Inc, and Alcatel-Lucent Enterprise (China Huaxin Post and Telecom Technologies Co., Limited).
By Component
By End User
By Organization Size
By Application
By Geography
The Network Functions Virtualization Market size is projected to reach USD 94.1 billion by 2028.
Helps Businesses In Saving Costs And Boosting Agility are driving the market in coming years, however, Security And Scalability Risks restraints the growth of the market.
Intel Corporation, Oracle Corporation, Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.), Ericsson AB, Hewlett Packard Enterprise Company, Juniper Networks, Inc., NEC Corporation, Amdocs Limited, F5 Networks, Inc, and Alcatel-Lucent Enterprise (China Huaxin Post and Telecom Technologies Co., Limited).
The expected CAGR of the Network Functions Virtualization Market is 24.8% from 2022 to 2028.
The Service Providers segment acquired maximum revenue share in the Global Network Functions Virtualization Market by End User 2021 thereby, achieving a market value of $39.7 billion by 2028.
The North America market dominated the Global Network Functions Virtualization Market by Region 2021, and would continue to be a dominant market till 2028; thereby, achieving a market value of $32.9 billion by 2028.
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