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  Date: 07/02/2016

SDN market: Virtualization/control layer and SDN applications segment to grow faster

IDC reported worldwide software-defined networking (SDN) market comprising of physical network infrastructure, virtualization/control software, SDN applications (including network and security services), and professional services to have a compound annual growth rate (CAGR) of 53.9% from 2014 to 2020 and will be worth nearly $12.5 billion in 2020.

IDC finds though the physical network, encompassing datacenter switches still account for the largest single segment of the SDN market in 2020, the fastest growth going to be in virtualization/control layer and SDN applications which is estimated to be worth approximately $5.9 billion. IDC also said it expects the virtualization/control layer software market to reach $2.4 billion in 2020, with a CAGR of nearly 64% during the forecast period. SDN applications including Layer 4-7 network and security services and analytics are forecasted by IDC to achieve a CAGR of 66% through 2020, when they will account for revenue of more than $3.5 billion.

"Cloud computing and the 3rd Platform have driven the need for SDN, which will represent a market worth more than $12.5 billion in 2020. Not surprisingly, the value of SDN will accrue increasingly to network-virtualization software and to SDN applications, including virtualized network and security services. Large enterprises are now realizing the value of SDN in the datacenter, but ultimately, they will also recognize its applicability across the WAN to branch offices and to the campus network," said Rohit Mehra, Vice President, Network Infrastructure at IDC.

“While networking hardware will continue to hold a prominent place in network infrastructure, SDN is indicative of a long-term value migration from hardware to software in the networking industry. For vendors, this will portend a shift to software- and service-based business models, and for enterprise customers, it will mean a move toward a more collaborative approach to IT and a more business-oriented understanding of how the network enables application delivery," said Brad Casemore, Director of Research for Datacenter Networking at IDC.
Author: Srinivasa Reddy N
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