SDN spending is surging higher as carriers and enterprise-scale businesses and governments aim to leverage software defined networking’s prospective benefits. These include gains in network efficiency, flexibility, overall performance and lower capex and opex. SDN also can play a critical role in both 4G and 5G wireless networks and services.
Global SDN spending will grow at a 47 percent CAGR from 2016-2022, Allied Market Research forecasts, and total $132.9 billion. SDN spending will be greatest in North America given fast growing mobile device usage, investments in advanced networking infrastructure and favorable regulatory environments. Development of industry standards in the U.S. and Canada also will spur growth, according to Allied.
Software-controlled network equipment gives organizations greater flexibility and control in managing fast-growing data and communications streams amidst the shift to expanded cloud-based and mobile application services, Allied points out in a press release.
SDN Spending Categories
Allied breaks SDN offerings into physical network infrastructure, virtualization and control software, professional services, and SDN applications and network services. Deployments are increasing across a wide range of industry verticals, the market research provider notes, including companies in the telecom, IT, consumer goods and retail, defense and healthcare sectors.
SDN physical network infrastructure – switches, routers and other network devices – accounted for the single largest portion of 2015 global market revenue at 47.4 percent. Allied expects SDN virtualization and control software will grow the fastest, at a CAGR of more than 51 percent over the forecast period.
Turning to end users, enterprise-scale businesses accounted for 43 percent of SDN expenditures last year, with telecom service providers following. Looking ahead, Allied expects SDN spending by cloud services providers will grow the fastest.
IT companies have been spending most on SDN – 22 percent of the global total in 2015, again followed by telecom companies. That said, Allied forecasts SDN spending growth will be fastest among consumer goods and retail sector companies from 2016-2022.
