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network function virtualization market

Network Function Virtualization Market Share, Size, Trends, Industry Analysis Report, By Component; By Virtualized Network Functions; By Enterprise Size; By Application; By End-Use; By Region; Segment Forecast, 2022 - 2030

  • Published Date: Sep 2022
  • Pages: 112
  • Format: PDF
  • Report ID: PM1474
  • Base Year: 2021
  • Historical Data: 2018-2020

Report Summary

The network function virtualization market was valued at USD 11.40 billion in 2021 and is expected to grow at a CAGR of 22.1% during the forecast period. Network Function Virtualization (NFV) is decoupling functions from proprietary hardware appliances and running them as software in virtual machines, including functions such as traffic control, firewalls, routers, load balancers, and others.

Network Function Virtualization Market Size
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The demand for network function virtualization market is driven by increased application in session border control, video servers, evolved packet core, IP multimedia subsystems, content delivery networks, monitoring, and others.

The outbreak of the COVID-19 pandemic has significantly impacted the growth of NF virtualization in China, one of the largest producers and consumers of endpoint devices, including computers, tablets, smartphones, and others. The production, sales, and operation have strongly affected the supply chain due to restrictions on the import and export of these endpoint devices.

Additionally, in March 2022, the 3GPP association announced the delay in the timeline for completion of the 5G specifications due to covid-19, which lowered the commercial development of NF virtualization devices and the market. However, many markets are adversely struggling to bring the NF virtualization market back on track. Even local governments are also managing to reduce the negative impact of covid-19.

The COVID-19 pandemic has affected the growth of the telecommunication and IT sector. Due to lockdown, several employees working from home and students learning have undertaken VPN servers, which have now become a mean of survival for organizations and schools. Therefore, continuous installation of routers in homes has driven the growth of the NF virtualization market during the COVID-19 pandemic.

Industry Dynamics

Growth Drivers
NFV helps in assisting the grid-related operations, reducing the power consumption and thus decreasing the equipment cost. Accordingly, it provides accessibility of several applications on one single appliance. Similarly, security issues and lack of laws & standards has hindered the market growth.

The global NF virtualization industry is driven by increased beneficiaries such as user mobility, updates, patches, portability, and ease of software management installation. Increased investment in 5G technologies, IoTs, cloud computing, AI, server virtualization, and demand for data center consolidation have resulted in the rapid growth of the NF virtualization technology.

Installation of routers and VPNs, mainly in homes and offices has led to a surge in the market growth. Rising distribution of virtualized software among data centers such as Internet Service Providers (ISP) and Cloud Services Providers (CSP) drives the growth of the NFV market. Separation of software from hardware improves service rapidity and reduces cost, as the functions are intended to help carriers in moving from proprietary hardware.

Report Segmentation

The market is primarily segmented based on components, virtualized network functions, applications, end-use, enterprise size and region.

By Component

By Virtualized Network Functions

By Application

By End use

By Enterprise Size

By Region

  • Solutions
  • Orchestration and Automation
  • Services
  • Compute
  • Storage
  • Network
  • Virtual Appliance
  • Core Network
  • Service providers
  • Data Centres
  • Enterprises
    • BFSI
    • Manufacturing
    • Government and defence
    • Healthcare
    • Retail
    • Education
    • IT-enabled Services
    • Others
  • SMEs
  • Large Enterprises
  • North America (U.S., Canada)
  • Europe (France, Germany, UK, Italy, Netherlands, Spain, Russia)
  • Asia Pacific (Japan, China, India, Malaysia, Indonesia. South Korea)
  • Latin America (Brazil, Mexico, Argentina)
  • Middle East & Africa (Saudi Arabia, UAE, Israel, South Africa)

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Orchestration and automation component accounted for the largest market share in 2021

On the basis of component, the NF virtualization market is categorized into solutions, services, and orchestration and automation. Orchestration and automation accounted for the largest market share as it automates and enhances service creation by combining virtual network function, self-healing, scaling, and resource lifecycle management of service.

Similarly, it caters to the issue directly and provides flexible terms for traffic management operators to improve efficiency. Accordingly, it provides accessibility to several applications on one system appliance, reducing operational cost and driving the market’s growth.

Additionally, automation improves availability and consumes the time of network operators from their daily tasks. Several components such as NFV orchestrators, WAN configuration, SDN controllers, virtual infrastructure managers, and others have driven the growth of orchestration and automation in the NF virtualization market.

Network function accounted for the largest market share in 2021

Based on functionality, NF virtualization is categorized as compute, storage, and network. Network function accounts for the largest revenue share as the demands for mobile broadband speed, wireless services, and mobility have increased, which has driven the growth of the segment.

Also, rapid investment in popularizing 5G technology increases the importance of the grid function. The network function is also driven by the increase in growing promotion of technologies, including IoTs and Artificial Intelligence (AI).

Core segment is expected to hold a significant revenue share over the forecast period

On the basis of application, the market has been segmented into virtual appliance and core network. The core segment accounted for the largest revenue share. It is also estimated to be the fastest-growing segment during the forecast period. The core market segment is driven by increased demand for virtualization and automation. Also, an increase in number of grid complexes is driving the growth.

Core segment includes operations such as traffic forwarding, traffic monitoring security, intrusion-based system, and domain name services which are carried over virtual evolved packet core over the edge. Most of the NF virtualization solution and association are significantly investing in R&D to introduce much better and affordable for small and medium scale ventures, describing the growth for core segment.

Enterprise segment is accounted the largest growth rate

On the basis of end-use, the report is segmented into service providers, data centers and enterprises. Enterprises accounted for the largest revenue share in 2021. Due to significant advantages such as improved grid ability by enhanced IT rapidity and centralized management, the enterprise customers are quickly accepting the NF virtualization technology.

The enterprise segment is further categorized into various sub-segments, including manufacturing, government and defense, healthcare, retail, education, IT-enabled services, banking, financial services and insurance (BFSI), and others. Currently, the distribution of NF virtualization is deployed in the healthcare, BFSI, manufacturing and retail sectors.

North America is projected to account for the largest revenue share in 2030

North America accounted for the largest revenue share for network function virtualization market in 2021. Equally, Asia Pacific is expected to witness fastest growth during forecast period. North America has several NF virtualization infrastructure providers, such as IBM, Cisco, Extreme, and Juniper Networks. Various technologies such as software defined everything (SDx), IoTs, and cloud computing are being adopted at a faster rate in the U.S., making it the largest shareholder in the North America NFV industry.

Due to the growing 5G distribution, the acquisition of NF virtualization has increased accordingly. Huge industrialization in countries such as U.S and Canada has driven the growth of the NFV industry in this region. Apart from 5G technology, demand for the high proportion of data storage and security, an increase in subscriber base and appropriate governmental policies drive the industry growth in this region.

Competitive Insight

Some of the major players operating in the global industry include Affirmed Networks, Ciena, Cisco Systems, Dell EMC, ECI TELECOM, Ericsson, Fujitsu, HPE, Huawei, Intel, Juniper Networks, Mavenir, Metaswitch, NEC Corporation, NETSCOUT, Nokia, Radisys, Ribbon Communications, VMware, Wind River, ZTE Corporation.

Recent Developments

In August 2022, Intel and Ran Hat collaborates to enable RAN intelligence by the Red Hat OpenShift Container Platform and Intel Smart Edge Open. In February 2022, Fujitsu launches new software vRAN technology with support of 5g to deliver potential reductions in CO2 emission of over 50%. In May 2021, Nokia announced that it will supply its digital operation software, cloud infrastructure software and airframes servers for enhancing the network of PLDT.

In March 2020, Ribbon Communications collaborates with ECI Telecom group for providing end to end packet optical transport and SDN/NF virtualization solution for service provider and data center operators. In September 2019, Ericsson collaborated with Juniper Networks and ECI telecom for creation of end to end optical transport solution for 4g and 5g traffic from cell sites all the way to network cores.

Network Function Virtualization Market Report Scope

Report Attributes

Details

Market size value in 2021

USD 11.40 billion

Revenue forecast in 2030

USD 62.57 billion

CAGR

22.1% from 2022 - 2030

Base year

2021

Historical data

2018 - 2020

Forecast period

2022 - 2030

Quantitative units

Revenue in USD billion and CAGR from 2022 to 2030

Segments covered

By Type, By Application, By Region

Regional scope

North America, Europe, Asia Pacific, Latin America; Middle East & Africa

Key companies

Affirmed Networks, Ciena, Cisco Systems, Dell EMC, ECI TELECOM, Ericsson, Fujitsu, HPE, Huawei, Intel, Juniper Networks, Mavenir, Metaswitch, NEC Corporation, NETSCOUT, Nokia, Radisys, Ribbon Communications, VMware, Wind River, ZTE Corporation.

Key Take-Away
Polaris Market Research
Network Function Virtualization Market Size Report, 2022 - 2030