How Has the Network Function Virtualization Market Evolved Historically and What is its Current Size?
The network function virtualization market has seen considerable growth due to a variety of factors.
• The size of the network function virtualization market has expanded swiftly over the past few years. It is projected to increase from $26.31 billion in 2024 to $31.41 billion in 2025, reflecting a compound annual growth rate (CAGR) of 19.4%.
The growth during the previous period is tied to the needs for lowering network infrastructure costs, a demand for scalability and adaptability, progress in virtualization technologies, a surge in data traffic and network complexity, and the shift towards software-defined networking (SDN).
What is the Forecasted Market Size and CAGR for the Network Function VirtualizationMarket?
The network function virtualization market is expected to maintain its strong growth trajectory in upcoming years.
• The size of the network function virtualization market is forecasted to witness a rapid expansion in the approaching years. By 2029, it is projected to reach $70.33 billion, with a compound annual growth rate (CAGR) of 22.3%.
Several factors are driving its growth during the projected period, such as a concentration on edge computing, a heightened demand for network automation, a focus on virtualized environment network security, decreased capital and operational costs, and network and related process optimization. Key trends during the projected period entail containerization in NFY deployments, network slicing for bespoke services, multi-vendor NFY solutions and interoperability, NFY integration with cloud-native technologies, and dynamic orchestration for service agility.
What Are The Primary Growth Drivers In The Network Function Virtualization Market?
The surge in demand for services based on the cloud is playing a substantial role in propelling the network function virtualization market's evolution. The term "cloud" pertains to servers accessible via the Internet, as well as the software and databases housed on these servers. Network operators leverage this cloud technology to dynamically avail new network services, circumventing the need for hardware installation. For example, Flexera's 2022 State of the Cloud Report, which included input from 753 technical professionals, indicated that the annual cloud expenditure of small to medium-sized businesses (SMBs) had seen significant growth, reaching 53% equating to an annual spend of $1.2 million in 2022 — a notable rise from 38% in the previous year. Consequently, the augmented demand for cloud-based services is paving the way for the growth of the network function virtualization market.
What Is The Segmentation Of The Global Network Function Virtualization Market?
The network function virtualization market covered in this report is segmented –
1) By Component: Solutions, Orchestration And Automation, Services
2) By Infrastructure: Hardware Resources, Virtualized Resources
3) By Application: Virtual Appliance, Core Network
4) By End User: Service Providers, Data Centers, Enterprises
Subsegments:
1) By Solutions: Virtualized Network Functions (VNFs), Virtual Routers, Virtual Firewalls, Load Balancers, Network Analytics Solutions
2) By Orchestration And Automation: Network Orchestration Tools, Service Orchestration Platforms, Policy Management Solutions, Automation Frameworks
3) By Services: Consulting Services, Integration And Implementation Services, Support And Maintenance Services, Training And Education Services
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What Emerging Trends Are Shaping The Network Function Virtualization Market Landscape?
Technological innovations have become a significant trend, raising their popularity in the network function virtualization market. The leading corporations in the NFV domain are emphasizing the creation of the most recent technologies to maintain their market dominance. To illustrate, in February 2022, a collaboration was negotiated between Mobileum, a telecom analytics firm in the US, and VoerEir, a cloud technology agency from Sweden. Their aim was to establish a robust testing platform for network function virtualization infrastructure. The fusion of Mobileum's SITE active test solution and VoerEir's Touchstone test suite results in a vertically integrated resolution, enabling communication service providers to fully automate service testing from the lab to the live network, and extending it to virtual and cloud-native network functionalities.
Who Are the Key Players in the Network Function Virtualization Market?
Major companies operating in the network function virtualization market include:
• Cisco Systems Inc.
• Telefonaktiebolaget LM Ericsson
• Huawei Technologies Co. Ltd.
• Nokia Corporation
• Hewlett Packard Enterprise Company
• Dell Technologies Inc.
• Juniper Networks Inc.
• Affirmed Networks Inc.
• NEC Corporation
• Ribbon Communications Operating Company Inc.
• ZTE Corporation
• Fujitsu Limited
• Ciena Corporation
• Amdocs Limited
• Mavenir Systems Inc.
• Radisys Corporation
• Accenture plc
• ECI Telecom Ltd.
• Wind River Systems Inc.
• Comba Telecom Systems Holdings Ltd.
• Intel Corporation
• Redline Communications Group Inc.
• Arista Networks Inc.
• Broadcom Inc.
• F5 Networks Inc.
• Fortinet Inc.
What are the Regional Insights into the Network Function Virtualization Market?
North America was the largest region in the network function virtualization market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the network function virtualization market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
