Global Software Defined Networking Market Size, Share & Industry Trends Analysis Report By Offering, By Type (Open SDN, SDN via Overlay, SDN via API, and Hybrid SDN), By Application, By End-User, By Vertical, By Regional Outlook and Forecast, 2023 - 2030

Analysis of Market Size & Trends

The Global Software Defined Networking Market size is expected to reach $72.0 billion by 2030, rising at a market growth of 17.2% CAGR during the forecast period.

BFSI institutions often have stringent regulatory compliance requirements. SDN facilitates network segmentation, creating isolated zones for different data types and applications. Therefore, the BFSI segment captured $4,750.7 million revenue in the market in 2022. SDN enables dynamic allocation of network resources based on real-time demands. This is particularly beneficial for BFSI organizations that experience fluctuating workloads or seasonal variations in transaction volumes. Dynamic resource allocation ensures optimal performance during peak times. This segmentation helps maintain compliance by ensuring that sensitive financial data is appropriately protected.

The major strategies followed by the market participants are Partnerships, Collaborations & Agreements as the key developmental strategy to keep pace with the changing demands of end users. For instance, In October, 2022, Ericsson AB extended its Agreement with Telenor, for operational services and software, utilizing the Ericsson Operations Engine. This AI-powered approach ensured next-gen connectivity and enhanced user experience and explored customer-centric services like Private Network and Cloud-based offerings. Additionally, In September, 2022, IBM Corporation collaborated with Bharti Airtel, to deploy Airtel's edge computing platform in India, featuring 120 network data centers across 20 cities. The platform, utilizing IBM Cloud Satellite and Red Hat OpenShift, aimed to enable large enterprises in diverse industries to innovate securely at the edge, delivering new value to clients and operations.

KBV Cardinal Matrix - Market Competition Analysis

Based on the Analysis presented in the KBV Cardinal matrix; Cisco Systems Inc. and VMware, Inc. (Broadcom Inc.) are the forerunners in the SDN Market. For Instance, In December, 2022, Cisco Systems Inc. collaborated with NeutraDC (Telkom Data Ekosistem, aimed to establish the Data Center for the Cisco Platform Mobile IoT (Control Center) and to advance the development of Telkom's Data Center network infrastructure using Software Defined Network (SDN) technology. The goal was to expedite the adoption of 5G technology and promote digitization in Indonesia and the ASEAN region. Companies such as Nokia Corporation, Huawei Technologies Co., Ltd. (Huawei investment & Holding Co., Ltd.), Juniper Networks, Inc. are some of the key innovators in SDN Market.

Market Growth Factors

Emergence of the 5G networks

5G networks provide significantly higher data transfer speeds and increased capacity than previous generations. SDN complements this by enabling dynamic resource allocation, ensuring efficient utilization of the enhanced network capabilities for various applications and services. Together, 5G and SDN provide a flexible and scalable network infrastructure. SDN's programmability allows operators to adapt the network to changing demands, supporting the deployment of new services and applications seamlessly on the 5G infrastructure. 5G networks, especially in scenarios like smart cities or industrial IoT, can be complex and require dynamic orchestration. SDN's orchestration capabilities simplify the management of such intricate network environments, allowing for seamless integration and efficient operation. Thus, the emergence of 5G has positively influenced the market.

Adoption of hybrid and multi-cloud architectures

Hybrid and multi-cloud environments often involve a mix of on-premises data centers and various cloud providers. SDN facilitates optimized connectivity between these diverse environments, ensuring efficient data transfer and communication. Also, SDN enables organizations to allocate and route network resources based on workload requirements dynamically. This flexibility allows for efficient workload placement across cloud providers, optimizing performance and resource utilization. Multi-cloud architectures contribute to robust disaster recovery strategies. SDN complements this by providing automated failover mechanisms, rerouting traffic, and ensuring continuity of operations in case of disruptions or outages. Thus, adopting hybrid and multi-cloud architectures has positively expanding the market.

Market Restraining Factors

Legacy network equipment issues

Legacy network equipment may not be designed to work seamlessly with SDN architectures. The absence of features or protocols compatible with SDN standards can hinder the integration process and limit the functionality of SDN in the existing network. OpenFlow is a commonly used protocol in SDN architectures. Proprietary protocols used in legacy equipment can lead to vendor lock-in, making integrating SDN solutions from different vendors difficult. This limits the flexibility and choice of SDN components in the network. Legacy networking devices may lack support for virtualization, a key component of SDN. Virtualized network functions and the ability to create and manage virtual network instances may be limited or non-existent in older equipment. Therefore, the above-mentioned aspects will cause the market growth to decline.

The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The above 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.

Offering Outlook

On the basis of offering, the SDN market is segmented into SDN infrastructure, software, and services. In 2022, the software segment dominated the market with maximum revenue share. The delivery of new applications and services is accelerated substantially due to businesses and communication service providers' increased adoption of SDN solutions. Proficient network, compute, and storage devices and features are instantly available to companies via SDN solutions. SND software allows organizations to choose components that align with their specific requirements and objectives.

Type Outlook

Based on type, the SDN market is fragmented into open SDN, SDN via API, SDN via overlay, and hybrid SDN. The hybrid SDN segment recorded a remarkable revenue share in the market in 2022. Hybrid SDN allows organizations to maintain existing infrastructure while gradually incorporating SDN capabilities. This phased approach allows for a smoother transition, accommodating the diverse needs of different network segments. Organizations can selectively implement SDN in specific areas or functions, ensuring a controlled and smooth transition. Hybrid SDN allows organizations to balance performance and control.

End-User Outlook

On the basis of end-user, the SDN market is categorized into telecommunication service providers, cloud service providers, and enterprises. The cloud service providers segment acquired a substantial revenue share in the market in 2022. Cloud service providers require networks that scale rapidly to accommodate varying workloads and user demands. SDN's ability to automate scaling processes and efficiently allocate resources aligns with the dynamic nature of cloud environments. SDN plays a pivotal role in these environments by enabling automated network provisioning, efficient traffic management, and seamless scalability.

Application Outlook

By application, the SDN market is classified into SD-WAN, SD-LAN, security applications, and others. In 2022, the SD-WAN segment witnessed the largest revenue share in the market. SD-WAN allows organizations to leverage cost-effective internet connections alongside traditional Multiprotocol Label Switching (MPLS) links. This flexibility enables significant cost savings, as businesses can choose the most cost-efficient and reliable transport for different types of traffic. SD-WAN enables dynamic path selection based on real-time network conditions. It can automatically reroute traffic in network congestion, packet loss, or link failure, ensuring continuous and reliable connectivity.

Vertical Outlook

Based on vertical, the SDN market is segmented into BFSI, healthcare & lifesciences, retail & e-commerce, manufacturing, government & defense, education, ITeS, media & entertainment and others. The retail & e-commerce segment garnered a significant revenue share in the market in 2022. Retail and e-commerce businesses often experience fluctuations in demand, especially during peak seasons or sales events. SDN enables dynamic scaling of network resources to accommodate increased traffic, ensuring customers a smooth online shopping experience. SDN allows robust security measures, such as network segmentation and micro-segmentation, to secure POS systems and prevent unauthorized access.

Software Defined Networking Market Report Coverage

Report Attribute	Details
Market size value in 2022	USD 20.8 Billion
Market size forecast in 2030	USD 72 Billion
Base Year	2022
Historical Period	2019 to 2021
Forecast Period	2023 to 2030
Revenue Growth Rate	CAGR of 17.2% from 2023 to 2030
Number of Pages	431
Number of Tables	613
Report coverage	Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Market Share Analysis, Porter’s 5 Forces Analysis, Company Profiling, Companies Strategic Developments, SWOT Analysis, Winning Imperatives
Segments covered	Offering, Type, End-User, Application, Vertical, Region
Country scope	North America (US, Canada, Mexico, and Rest of North America) Europe (Germany, UK, France, Russia, Spain, Italy, and Rest of Europe) Asia Pacific (China, Japan, India, South Korea, Singapore, Malaysia, and Rest of Asia Pacific) LAMEA (Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria, and Rest of LAMEA)
Companies Included	Cisco Systems Inc., Huawei Technologies Co., Ltd. (Huawei investment & Holding Co., Ltd.), VMware, Inc. (Broadcom Inc.), Dell Technologies, Inc. (Dell EMC), Juniper Networks, Inc., IBM Corporation, Ericsson AB, Ciena Corporation, Hewlett Packard enterprise Company and Nokia Corporation
Growth Drivers	Emergence of the 5G network Adoption of hybrid and multi-cloud architectures
Restraints	Legacy network equipment issues

Regional Outlook

Region-wise, the SDN market is analyzed across North America, Europe, Asia Pacific, and LAMEA. In 2022, the North America region held the highest revenue share in the market. The North American region plays a crucial role in enhancing the growth of the market. Over the next five years, most IT teams are expected to increasingly adopt NaaS as suppliers provide hybrid offerings that involve software, cloud intelligence, and the alternative for managing on-premises hardware devices.

Free Valuable Insights: Global Software Defined Networking Market size to reach USD 72 Billion by 2030

The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Cisco Systems Inc., Huawei Technologies Co., Ltd. (Huawei investment & Holding Co., Ltd.), VMware, Inc. (Broadcom Inc.), Dell Technologies, Inc. (Dell EMC), Juniper Networks, Inc., IBM Corporation, Ericsson AB, Ciena Corporation, Hewlett Packard enterprise Company and Nokia Corporation.

Strategies deployed in the Market

» Partnerships, Collaborations and Agreements:

• Dec-2023: Ericsson AB came into an agreement with Datastream Digital Sdn Bhd (DST), Southeast Asia communications service provider, to migrate DST's customer interaction application to the Amazon Web Services (AWS) cloud. Additionally, Ericsson provided technical services to enhance the native application, enabling DST's vision of becoming a fully digital service provider across the region.
• Nov-2023: Ericsson AB partnered with M1, a Keppel Corporation subsidiary, to modernize its 4G/5G mobile transport network using the high-capacity Ericsson Router 6676. This router, part of the Ericsson Router 6000 Series, addressed future 5G transport requirements with features like segment routing and increased port density.
• Oct-2023: Nokia Corporation partnered with ZCorum, a leading provider of managed broadband services and software, enabling small and medium-sized cable operators to easily deploy Nokia's PON solutions through integrated cloud-based OSS, accelerating network rollouts.
• Sep-2023: Ericsson AB expanded its partnership with Google Cloud, developing Ericsson Cloud RAN on Google Distributed Cloud (GDC) for enhanced automation and AI/ML benefits for CSPs. The solution, with vDU and vCU on GDC Edge, ran live in Ericsson Open Lab, Ottawa, aiming for market development.
• Aug-2023: Cisco Systems Inc. partnered with Nutanix, Inc., a leader in hybrid multicloud computing, to accelerate hybrid multicloud deployments, offering a comprehensive hyperconverged solution for IT modernization. This collaboration provided a balanced approach to powering modern workloads on-premises and in the cloud by combining Cisco's SaaS-managed compute portfolio with Nutanix's cloud platform software.
• Feb-2023: Juniper Networks, Inc. planned to expand collaboration with IBM, integrating IBM's network automation with Juniper's RAN optimization and O-RAN technology. The aim was a unified RAN management platform, using intelligent automation to empower CSPs in optimizing and scaling next-gen networks for improved mobile user experiences.
• Dec-2022: Cisco Systems Inc. collaborated with NeutraDC (Telkom Data Ekosistem), a subsidiary of PT Telkom Indonesia (Persero) Tbk (Telkom). The collaboration aimed to establish the Data Center for the Cisco Platform Mobile IoT (Control Center) and to advance the development of Telkom's Data Center network infrastructure using Software Defined Network (SDN) technology. The goal was to expedite the adoption of 5G technology and promote digitization in Indonesia and the ASEAN region.
• Oct-2022: Ericsson AB extended its Agreement with Telenor, a Norwegian majority state-owned multinational telecommunications company, for operational services and software, utilizing the Ericsson Operations Engine. This AI-powered approach ensured next-gen connectivity and enhanced user experience. Additionally, the collaboration explored customer-centric services like Private Network and Cloud-based offerings.
• Sep-2022: IBM Corporation collaborated with Bharti Airtel, a leading and most trusted provider of ICT services in India, to deploy Airtel's edge computing platform in India, featuring 120 network data centers across 20 cities. The platform, utilizing IBM Cloud Satellite and Red Hat OpenShift, aimed to enable large enterprises in diverse industries to innovate securely at the edge, delivering new value to clients and operations.
• Jun-2022: Cisco Systems Inc. partnered with Kyndryl, the world's largest IT infrastructure services provider, to accelerate enterprise transformation into data-driven businesses. The collaboration focused on simplifying hybrid IT management through cloud services, developing solutions like private cloud services, network, edge computing, SDN, and secure multi-network WAN offerings.
• Jun - 2022: Huawei Technologies Co., Ltd. collaborated with Ooredoo Kuwait, a telecommunications company in Kuwait owned by the Ooredoo group, to provide Enterprise Businesses with managed SD-LAN and SD-WAN services, ensuring a unified interface, technical support, and advanced service delivery. The cloud-like subscription model aimed at optimizing network performance and user experiences for businesses.
• Mar-2022: Nokia Corporation announced the collaboration with Vodafone, a leading technology communications company in Europe and Africa, on evolving the software-defined network manager and controller services for the company's multi-access fixed network technology. Both companies conducted proof-of-concept trials in Europe under the agreement.
• Jun-2021: Dell Technologies, Inc. partnered with Dish, offers receiver systems and programming through direct sales channels, for Dish's Open RAN-based 5G network in the U.S. Dell provided network and edge-compute infrastructure, and both companies jointly developed technology for Open RAN, SmartNICs, micro-edge colocation, and operational automation. Teams collaborated on MEC solutions for enterprise and small business opportunities.
• Apr 2021: Cisco Systems Inc. expanded its partnership with NEC Corporation to accelerate the global deployment of advanced 5G IP transport network solutions. Together, they aimed to drive crucial changes in networking infrastructure, preparing for the next decade of internet evolution.
• Jun-2020: Juniper Networks, Inc. partnered with Anuta Networks, recognized as the leader in network automation with its web-scale architecture and extensive multi-vendor device support. The partnership aimed to integrate the Anuta ATOM platform into Juniper's network automation portfolio. This collaboration enabled rapid design and provision of network services, enhanced visibility, and ensured SLA compliance for multi-vendor infrastructure. The ATOM platform became available through Juniper.

» Product Launches and Product Expansions:

• Nov-2023: Huawei and XL Axiata, a leading Indonesian telecommunications services provider, completed a successful live network trial and initiated the commercial launch of Network Digital Map. This deployment, based on end-to-end SRv6 and SDN automation technology, enhances XL Axiata's digital foundation, optimizing traffic, load balancing, and bandwidth efficiency. The implementation rapidly improves latency, boosting the user experience for 4G/5G and XL Axiata's convergence business consumers.
• Oct-2023: Juniper Networks, Inc. enhanced its security lineup with AI-driven predictive threat support and new firewalls, anchored by the Juniper Connected Security Distributed Services Architecture. Integrated into Junos OS (version 23.4), it enables various security features for zero-trust policy enforcement and intrusion detection across distributed data center networks.
• Sep-2023: IBM Corporation expanded its DNS capabilities with the launch of NS1 Connect, integrating stability and security enhancements post-acquisition. A bundled SaaS product unified all NS1 DNS features, simplifying access. Integration into IBM's global market offerings provided unprecedented size and scale to the platform.
• Feb-2023: Huawei Technologies Co., Ltd. launched a Digital Managed Network Solution for carriers, aiding in digital transformation and expanding services like Managed LAN, WAN, Security, and DCN. The launch empowered carriers to evolve from ISPs to MSPs, enhancing network quality and automation for differentiated private lines.
• Dec-2022: Nokia Corporation and NBN Co, a publicly owned corporation of the Australian Government, deployed Nokia's next-gen broadband platform, including the Lightspan MF-14, for a smarter, faster, and greener nbn network in the Southern Hemisphere, supporting Australia's broadband needs and NBN Co's Toward Zero Carbon Ambition.
• Oct-2022: Nokia Corporation launched a broadband network automation marketplace with seven apps for Network Support, Network Insights, and Network Automation. Operators could customize tools via the developer portal, choosing from curated apps for network maintenance, troubleshooting, optimization, planning, and prevention.
• Aug-2020: Juniper Networks and Netcracker Technology jointly provided an end-to-end network management solution, enhancing LAN/WLAN/WAN networks with automated provisioning, AI-driven insights, and full lifecycle management. The integrated solution improved service and security operations, increasing agility for service providers and delivering maximum value to enterprise customers. The offering, called Enterprise Service Automation, unified LAN and WAN environments, with Juniper's Mist AI-driven solutions complementing their secure SD-WAN portfolio for comprehensive insight and automation.
• Apr-2020: VMware upgraded its Virtual Cloud Network with NSX-T 3.0 and vRealize Network Insight 5.2, focusing on Kubernetes, 5G, and security. NSX Federation in NSX-T 3.0 enables a cloud-like model with fault isolation, while vRealize Network Insight 5.2 introduces flow-based application discovery using machine learning for better understanding and categorization.

» Acquisition and Mergers:

• Feb - 2023: IBM Corporation declared its intent to acquire NS1, a notable provider of SaaS solutions for network automation. The transaction, subject to customary closing conditions and regulatory clearances, was anticipated to conclude in the first half of 2023. Under the acquisition, NS1 employees were to become part of IBM Software. As part of this transaction, NetBox Labs would separate from NS1, with IBM becoming an investor in NetBox Labs.
• Feb - 2023: Hewlett Packard Enterprise announced the acquisition of the Italian startup Athonet, known for providing core networks for private cellular networking operations. This acquisition positioned HPE to possess one of the most comprehensive private 5G and Wi-Fi portfolios for communication service providers (CSP) and enterprise customers.
• Nov - 2022: Ciena Corporation acquired Tibit Communications, offers a disruptive technology that will fundamentally change the way broadband access, and Benu Networks, a leading software and solutions provider, to enhance support for next-gen metro and edge strategies. The acquisitions added high-speed PON technologies and advanced subscriber management to Ciena's portfolio, offering comprehensive broadband access solutions for modernized networks.
• Dec - 2020: Juniper Networks, Inc. acquired Apstra, a leader in intent-based networking, to advance AI-driven automation for cloud-era networks. The integration with Juniper's Data Center portfolio aimed to optimize operations and accelerate the journey towards a self-driving network.

Scope of the Study

Market Segments Covered in the Report:

By Offering

• Software
• SDN Infrastructure
• Services

By Type

• Open SDN
• SDN via Overlay
• SDN via API
• Hybrid SDN

By Application

• SD-WAN
• SD-LAN
• Security Applications
• Others

By End-user

• Enterprises
• Telecommunication Service Providers
• Cloud Service Providers

By Vertical

• BFSI
• Government & Defense
• Education
• Healthcare & Lifesciences
• Media & Entertainment
• Manufacturing
• Retail & eCommerce
• ITeS
• Others

By Geography

• North America
  • US
  • Canada
  • Mexico
  • Rest of North America
• Europe
  • Germany
  • UK
  • France
  • Russia
  • Spain
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Singapore
  • Malaysia
  • Rest of Asia Pacific
• LAMEA
  • Brazil
  • Argentina
  • UAE
  • Saudi Arabia
  • South Africa
  • Nigeria
  • Rest of LAMEA

Key Market Players

List of Companies Profiled in the Report:

• Cisco Systems Inc.
• Huawei Technologies Co., Ltd. (Huawei investment & Holding Co., Ltd.)
• VMware, Inc. (Broadcom Inc.)
• Dell Technologies, Inc. (Dell EMC)
• Juniper Networks, Inc.
• IBM Corporation
• Ericsson AB
• Ciena Corporation
• Hewlett Packard enterprise Company
• Nokia Corporation