Software-Defined Networking (SDN) Market: By Organization Size (SMEs and Large Enterprise), By Component (Hardware Component, Services and Software), By Application (SD-WAN, SD-LAN, Security Applications and Others), By Solution (Physical Network Infrastructure Solution, Network Virtualization and Automation Solution) and By End-User (Retail, IT & Telecommunication, Healthcare, BFSI, Industrial, Government and others) - Global Forecast till 2027
ID: MRFR/ICT/1076-CR | February 2019 | Region: Global | 124 pages
Market Overview
Market Research Future (MRFR) expects the Global Software-Defined Networking Market to display a CAGR of 42.41% from 2018 to 2023 (forecast period). The rapid expansion in big data is partly driving the adoption of software-defined data centers across domains like retail, IT, BFSI and telecommunications. Software-defined infrastructure aids in the quicker implementation of automation processes in organizations smoothly. North America will continue to dominate global software-defined networking market throughout the assessment period. The United States is a pivotal contributor to the growth of the market in the region.
COVID-19 Impact on the Software-Defined Networking Market
Software-defined networking technology is one of the methods to network management that enables network configuration to improve network monitoring and performance, such as cloud computing, rather than conventional network management. The COVID-19 pandemic has had a favorable influence on the software-defined networking market. The exponential integration of big data is the key driver of business growth. The worldwide spread of the virus has brought together researchers, doctors and data scientists to find solutions. Researchers use technologies such as big data, machine learning, and other advanced technologies throughout the ongoing crisis. Owing to the rise in COVID-19 cases worldwide, it is difficult to examine each patient's records and provide a solution to reduce the spread of coronavirus. Big data plays a critical role here. Big data helps to evaluate datasets and to recognize trends that can help to detect COVID-19. The prominence of big data has become more apparent as organizations such as the CDC, Microsoft, and WHO are making dashboards based on the technology. These dashboards extract data from different countries and display the location of reported cases and deaths. These dashboards are additionally used to prepare datasets for big data models. These models will estimate potential hotspots and alert health authorities in advance. Big data technology has had a positive influence on the software-defined networking market during the pandemic.
In addition, government-imposed lockdowns in different countries have forced people to stay at home to avoid the spread of the virus. People staying at home also increased their use of the Internet. IT infrastructure giants have shifted the networking infrastructure for employees to operate remotely. The high use of VPNs for remote working and teleconferencing has resulted in heavy data traffic on the Internet. The pandemic has pushed all IT infrastructure providers to adopt software-defined networking technology.
Moreover, growing demand for data center consolidation, cloud services and server virtualization are key factors driving the software-defined networking market growth. The amount of data generated by Internet browsing requires data centers and cloud services. This need is responsible for the development of the sector.
Market Dynamics
Driving Factors
Increase in investments in software-defined networking/network virtualization to decrease capital expenditure (CAPEX) and operating expenses (OPEX) to boost the market growth
The introduction of software-defined networking/NFV helps to minimize the burden of capital expenditure and operating expenses faced by businesses while addressing increasingly emerging demands by reducing the dependency on hardware platforms. For example, a virtualized radio access network (vRAN) does not need a Base Band Unit (BBU) at the site, minimizing operational costs due to limited power usage along with rents at the cell site with an estimated overall cost of ownership savings. Also, different communication service providers are investing in these technologies to transform their network architecture and reduce the cost of networking operations.
Market Opportunity
Increasing adoption of IoT
The number of IoT devices has grown exponentially in recent years. There are billions of IoT devices in the world today. The widespread use of IoT technology generates the need for networking these devices. The network infrastructure is required to meet all the needs of these devices to provide sufficient connectivity and to ensure the delivery of application-based services. As a result, infrastructure sharing between service providers has increased to reduce the high investment costs associated with the deployment of infrastructure. New architectures, such as SDN, are being adopted by organizations for network sharing, handling big data from IoT devices and simplifying management tasks. For this, multiple service providers use common network infrastructures requiring the isolation of network resources and strict confidentiality that can be provided by SDN solutions.
Market Segmentation
Global Software-Defined Networking Market has been segmented into Organization Size, Component, Application, Solution, and End-User.
By organization size, the global SDN market has been segmented into SMEs and large enterprises.
By component, the global SDN market has been segmented into hardware components, services, and software.
By application, the global SDN market has been segmented into SD-WAN, SD-LAN, security applications, and others.
By solution, the global SDN market has been segmented into physical network infrastructure solution, network virtualization, and automation solution.
By end-user, the global SDN market has been segmented into retail, IT & telecommunication, healthcare, BFSI, industrial, government, and others.
Regional Analysis
Region-wise, the global software-defined networking market has been segmented into North America, Europe, Asia Pacific, The Middle East & Africa (MEA), and Latin America.
North America to foster the global market
North American is set to lead the global market. The presence of advanced connectivity infrastructure and a high level of proliferation of different mobility solutions are supporting the market. Telecom companies in the region are investing in advanced networking technologies to improve infrastructure capabilities. The high level of internet penetration and extensive adoption of 4G technologies have also led to the software-defined networking market's growth.
Competitive Landscape
The competitive landscape of the global software-defined networking industry is fragmented due to the involvement of many main players. These players are actively trying to develop new approaches and innovative methods to address the pressing networking issue that trouble the enterprises. Competition in the global software-defined networking market is expected to increase with the entry of new players in the coming years of the forecast period.
Key Players
- Intel Corporation
- Hewlett Packard Enterprise Company
- Pluribus Networks Inc.
- Huawei Technologies Co. Ltd.
- Juniper Networks Inc.
- Cisco Systems Inc.
- NEC Corporation
- IBM Corporation
- Pica8 Inc.
- Brocade Communications Systems Inc.
- Ciena Corporation
- Big Switch Networks Inc.
- Ulak Communications
Recent Developments
In March 2020, Cisco's transformation to a converged SDN transport network simplifies the network, increases capacity and enhances scalability while ensuring consistent and superior customer experience.
Report Overview
The study provides insights into the leading market players and offers an overview of their current market position. Information on revenues, market share, regional income, SWOT, growth strategies, new product launches, M&A activities and the recent R&D initiatives is also available in the study.
Frequently Asked Questions (FAQ) :
The software-defined networking market is set to hit USD 59 billion by 2023, with CAGR of 42.41% over the review period.
The software-defined networking market segmentation is conducted based on organization size, component, application, solution, and end-user.
North American region is set to dominate the market over the assessment period.
Software defined networking is an emerging technology that helps service providers to execute complex networks with high programmability and support automation principles. The global software define networking market is expected to surpass a valuation of USD 59,000 Mn by 2023 up from USD 7,211.5 Mn in 2017, reflecting a stellar growth rate. The uptake in software defined networking has spurred at an exponential. Implementation rate has continued to grow in industrial verticals such as BFSI, telecommunication, information technology, and manufacturing among others. In term of security, software defined networking has different aspects such as software-defined wide area network, software-defined storage, and software-defined everything. The security models are simple and cost-effective as compared to conventional systems.
Rise of big data and advances in networking infrastructure is necessitating robust networking software. In addition, adoption of software-defined data centers in BFSI, retail, telecom, and IT. Increased focus towards automation in IT is partly supporting the adoption of software defined networking. In the years to come, demand for application-centric networking services is likely to increase.
Segmental Analysis
The segmental analysis of the global software defined networking market has been conducted on the basis of organization size, component, application, solution, end-user and region.
Based on organization size, the market has been segmented into SMEs and large enterprise. The large enterprise segment currently accounts for the largest market share and is likely to retain its dominant position over the assessment period. By the year 2023, the segment is expected to reach a valuation of over USD 35,000 Mn.
Based on component, the market has been segmented into hardware component (router, switches and others), services (professional service, support & maintenance service, consulting service and managed service) and software (software controller and application software). The service segment is expected to post a CAGR of 45.70% during the assessment period and surpass a market valuation of USD 28,000 Mn by 2023-end.
Based on application, the market has been segmented into SD-WAN, SD-LAN, security applications and others. The SD-WAN segment is expected to remain highly profitable over the next several years. Meanwhile, the SD-LAN segment is set to exhibit the fastest CAGR during the forecast period.
Based on solution, the market has been segmented into physical network infrastructure solution, network virtualization & automation solution. The physical network infrastructure segment holds the dominant share of the market. In 2017, the segment stood at a valuation of USD 3,529.8 Mn. The network virtualization & automation segment is also expected to emerge as a highly attractive segment and capture a CAGR of 45.18% during the forecast period.
Based on end-user, the market has been segmented into retail, IT & telecommunication, healthcare, BFSI, industrial, government and others. Of these, the IT and telecommunication segment currently accounts for the majority of the market share in terms of revenue.
Regional Outlook
On the basis of region, the global software defined networking market is segmented into North America, Latin America, Asia Pacific, the Middle East & Africa (MEA) and Europe. North America leads the global software defined networking market. Countries such as the US and Canada are home to some of the prominent technology companies, which gives the market in North America an edge. Moreover, the existence of an advanced networking infrastructure allows a seamless implementation of cutting-edge networking technologies. Other factors such as rampant investment in R&D and presence of a vast IT and communication sector are supporting the growth of the market in North America. By 2023, the market in the region is anticipated to touch a valuation of 24,800 Mn.
Competition Tracking
Notable companies operating in the global software defined networking market include Huawei Technologies Co. Ltd., Hewlett Packard Enterprise Company, Cisco Systems, Inc., NEC Corporation, Juniper Networks Inc., IBM Corporation, Intel Corporation, Ciena Corporation, Pluribus Networks Inc., Pica8 Inc., Big Switch Networks Inc., Brocade Communications Systems Inc., Ulak Communications.
Competitive Landscape Overview
The global software defined networking market is characterized by the presence of many global, regional, and local vendors. The market is highly competitive with all the players competing to gain market share. Intense competition, rapid advances in technology, and frequent changes in government policies are the key factors that limit market growth. The vendors compete based on quality of service, pricing, and reliability. It is crucial for the vendors to provide advanced technology and value-added services for software defined networking vendors to survive and succeed in an intensely competitive market environment.
The growth of the market vendors is dependent on the market conditions, government support, and industry development. Thus, the vendors should focus on geographic expansion and advancement in digital services. Cisco Systems Inc., Juniper Networks Inc., NEC Corporation, Brocade Communications Systems Inc., Intel Corporation, Big Switch Networks, Hewlett Packard Enterprise Company, Huawei Technologies Co. Ltd, Pica8 Inc., Ciena Corporation, Pluribus Networks Inc., and IBM Corporation, Ulak Communications are the major companies in the market that compete in terms of services offered, pricing of IPN devices, and availability of components from suppliers. These companies primarily focus on the development of switches, network infrastructure, and controllers. Although the global players are dominating the market, regional players with small market shares also have a strong presence. The global players are expected to strengthen their presence worldwide through organic and inorganic growth during the forecast period.
The vendors with better technical and financial resources can develop innovative products that render the ones by their competitors obsolete and non-competitive even before they are launched, or costs are recovered. Therefore, vendors must develop new technologies and stay in touch with emerging technologies that could affect the continuing competitiveness of their product lines in the market.
Cisco systems Inc. designs, manufactures, and sells internet protocol-based networking services and products to the IT and telecommunication organizations. The company serves various industries such as energy, education, healthcare, retail, and hospitality. In their software-defined networking portfolio the company provides various solutions such as Application-Centric Infrastructure (ACI), DNA Center, SD-Access, SD-WAN, and SD-Branch. The company operates in the Americas, EMEA, and APAC regions.
Big Switch Networks is a provider of an open software-defined networking (SDN) technology. The company has strategic partnerships with HPE, Edgecore, and Dell EMC. It provides products, services, solutions, and various technologies related to SDN to the end-users. Big Switch Networks partnered with Microsoft Azure to provide integrated solution for its new Azure Virtual Network Terminal Access Point (TAP). Big Monitoring Fabric- public cloud are integrated with Azure to provide secure, scalable, and simple solutions to monitor workload. The company mainly focuses on product management, product marketing, technical marketing, a technological partnership, and acquisitions.
Brocade Communication Systems Inc. specializes in network solution. On 17 November 2017, Broadcom acquired Brocade Communications systems Inc. In software defined networking, the company provides various products such as Brocade SDN controller, Brocade flow optimizer, Brocade flow manager, and Brocade VNF manager. The company’s acquisition and investment strategy focus on expansion and evolution of shared storage network-based analytics, security, data management, and IP networking.
NEC Corporation (NEC) is a global provider of information technology services and products. It offers IT and network solutions to business enterprises, communications services providers, and government agencies and is one of the biggest PC vendors in Japan. It also provides services for IT, network systems, electronic devices and others. NEC is focused on R&D to drive technological development. The company aims to become a complete solution provider of integrated communications and advance hardware components.
Juniper Networks, Inc. engages in the sale of products and services, design, and development, for high-performance networks. The company operates in various business segments including switching, routing, and security products which are designed to provide high performance, flexibility, and low total ownership cost. Juniper Network focuses on delivering highly reliable, scalable, cost-effective, and secure network for increasing network’s speed, efficiency, and value through automation.