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Infonetics: Carrier SDN Market Will Climb To $11 Billion By 2018

As telecom providers race to deliver services with increased speed and agility, industry analyst Infonetics expects the carrier market for SDN and NFV technologies to soar from $500 million last year to more than $11 billion by 2018.

As traditional telecom carriers race to compete against a new breed of rivals such as Google and Skype, their adoption of software-defined networking (SDN) and network functions virtualization (NFV) technologies will soar over the next several years, according to new data from industry analyst Infonetics.

In a report released this month, Infonetics said it expects the global carrier SDN and NFV markets to grow to more than $11 billion in 2018, up from less than $500 million last year.

"For three years, the telecom industry has been abuzz over SDN and NFV, with anticipation and hard work developing the vision, goals, architectures, use cases, proof-of-concept projects, field trials, and even some commercial deployments," said Michael Howard, Infonetics co-founder and principal analyst for carrier networks. "We've been gathering data in this early market for nearly two years and are projecting the global service provider SDN and NFV market to reach $11 billion in 2018."

[Related: Brocade Channel Chief: Market Shift To SDN 'Coming Fast']

SDN -- technology that turns the high-end functions of routers, switches and other networking gear into software that can run on commodity hardware -- is being steadily embraced by carriers and enterprise organizations alike, as a means to make their networks more programmable, flexible and easier to manage.

NFV, a close technology relative of SDN, refers to the virtualization of Layer 4-7 network functions, such as firewalls, intrusion-prevention systems and load balancing. It's been embraced, especially, by carriers, who can use NFV to speed up the delivery of new services, reduce operational costs and compete more effectively against a new class of "over-the-top" content providers such as Google.

Large U.S. telecom providers including Verizon and AT&T have already started to deploy SDN and NFV technologies on their networks.

Last year, AT&T rolled out its Domain 2.0 Supplier program, which aims to recruit a new base of networking suppliers that can deliver more SDN and NFV technologies to the AT&T network.

Participating suppliers in the AT&T Domain 2.0 program include Alcatel-Lucent, Ericsson and Metaswitch Networks.

Solution providers, meanwhile, say SDN and NFV technologies are starting to take hold among their enterprise customers, as well. Chris Becerra, president and CEO of Terrapin Systems, a San Jose, Calif.-based solution provider, said 2014 has been an inflection point for SDN adoption among his clients.

"When it's all said and done, I am hoping to have between $250,000 and $500,000 in revenue this year from SDN or open networking deals and deployments, vs. zero [in sales] just six months ago," Becerra said.

PUBLISHED NOV. 26, 2014

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