The global market for software defined networking is set to grow to $72.63bn by 2027, a yearly growth of 28.2 percent from today.
The market was $9.99bn, according to Allied Market Research. The rising adoption of cloud computing along with increasing investments in software defined networking function virtualization to reduce capital expenditure and operating expenses are the major factors driving growth. Furthermore, the surge in need for mobility services and increases in bandwidth usage due to COVID-19 are also feeding market growth.
Hurdles to growth include legacy network equipment issues and security risks due to the centralized nature of the data plane. However, an increase in the implementation of IoT applications and intelligent edge, as well as the convergence of software-defined networking with emerging 5G networks are anticipated to bring new opportunities in the near future.
A huge shift toward cloud computing by various organizations during the COVID-19 pandemic has significantly increased the implementation of software defined networking systems among cloud service providers. In addition, investments in network function virtualization and software defined networking have considerably increased with rising internet traffic stemming during the pandemic.
Based on components, the solution segment contributed to the largest market share in 2019, accounting for more than three-fifths of the global software defined networking market, and is projected to maintain its lead status during the forecast period. This is attributed to increase in adoption of software-defined networking by enterprises and communication service providers to significantly accelerate the time for delivering new applications and services. However, the services segment is estimated to manifest the highest CAGR of 30.90% from 2020 to 2027, mainly driven by the growth in demand by enterprises to develop network strategies.
Based on industry vertical, the IT and telecom segment accounted for the highest market share, contributing to more than two-fifths of the global software defined networking market in 2019, and is expected to maintain its dominant share by 2027. This is attributed to enormous data generated by IoT, an increase in the need to improve agility and innovation, and the rising need to enhance employee collaboration. However, the consumer goods and retail segment is anticipated to grow at the highest CAGR of 32.9% during the forecast period, mainly driven by residential and other municipal sector applications.
The North America region held the largest share of the global software defined networking market, contributing to nearly two-fifths of the total share in 2019, and will continue its leadership position during the forecast period. This is due to a surge in the adoption of advanced technologies across various industry verticals, an increase in cloud computing and mobility, and increasing network management for large network traffic. On the other hand, the Asia-Pacific region is anticipated to manifest the fastest CAGR of 32.60% from 2020 to 2027. This is attributed to an increase in the number of start-ups and an upsurge in implementation of new and advanced technologies such as virtualization services and mobility systems.
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