The size of the Network Function Virtualization (NFV) market will be $38 billion in 2022 – driven by investment from telecom operators, according to ABI Research.
The global NFV market will see a drop in the hardware spend — including servers, storage devices, and switches. Software spend on NFV will grow at 55 percent. Services spend on NFV will grow at 50 percent. The standardization and multi-vendor involvement challenges will be stagnant for the next couple of years.
ALSO READ: Network Function Virtualization market report from ABI Research
ABI Research said software and services vendors will have opportunities to identify NFV use-cases in enterprise verticals and use these to offer end-to-end integrated systems.
North America will lead the NFV market, accumulating $13 billion in NFV-related investments during 2022.
The European NFV market will experience the highest growth rate at an estimated 53 percent CAGR between 2017 and 2022.
Early adopters claim several benefits to NFV-enabled systems, which include reductions in network CAPEX & OPEX, service agility, and reduced deployment times for new network elements.
“In 2015 and 2016, the market experienced some early successes but mostly reconsiderations and failures with NFV,” says Neha Pachade, senior analyst at ABI Research.
ABI Research said early adopters conducted proof of concept testing and NFV-integrated system demonstrations with the aim to understand the true impact of NFV in the technical, operational, and cultural domains.
Early contracts and market trends illustrate the biggest winners are top vendors, including Ericsson, Huawei, and Nokia, as well as specialists like Amdocs and Netcracker.
Several technology vendors place heavy and risky bets on open source software, which may increase business opportunities but may create difficult choices for them in the future, particularly if telecoms interest in specific open source projects fizzles out.
Telecom operators are considering NFV as a cost-cutting exercise. Telecoms could look for better revenue opportunities which are more likely to be driven by 5G, after 2020.
