Market Size (2017)
2017
$2.96B
Vertical: ICTBase Year: 20189 Sections
Market Size (2017)
2017
$2.96B
Projected (2025)
2025
$48.02B
CAGR (2017–2025)
41.7%
41.7%Key Players
110+
The global SDN market was valued at USD 10,111.6 million in 2018 and is expected to register a CAGR of 42% during the forecast period. At present, in the SDN market, supply side vendors should focus on enhancing their capabilities in the fields of- professional service, implementation service, support and maintenance service, consulting service, and managed service. The utilization of these services is growing at a considerably high rate and this upsurge is projected to continue for the next five to six years.
Apart from the aforementioned services, SDN software controller is yet another major area in the SDN that manages the flow of data and controls it, accordingly, thereby enabling intelligent networking. In order to gain a competitive advantage and prevail in the SDN market, most of the companies are required to integrate SDN with machine learning and deep learning in order to cater to the new and upcoming use cases. For instance, in July 2019, IBM Corporation invented a deep reinforcement learning approach to maximize the overall performance of the modern programmable SDN architecture that supports 5G.
The datacenter SDN market is a key application area for the SDN vendors to focus on. It is growing at a healthy rate and its prospects remain robust. The modernization of datacenters due to the persistent pursuit of digital transformation is leading to an increasing requirement for SDN. Furthermore, the rising adoption of cloud infrastructure is expected to contribute to the growth of the datacenter SDN market significantly. Therefore, it is imperative for the vendors in the market to focus on the prospects to extend datacenter SDN overlays and fabrics to multi-cloud application environments.
The software-defined wide-area network (SD-WAN) is applied to different WAN connections such as 4G, broadband, LTE, or MPLS. The SD-WAN connects enterprises network, that includes datacenters and branch offices over considerable distance. With the growing number of cloud-based applications, the traditional WAN is unable to offer proper connectivity and speed; SD-WAN is used as it provides flexibility to control the efficiency of the connections in high traffic networks. The SD-WAN relies on edge connectivity abstraction, WAN virtualization, elastic traffic management, and policy-driven, centralized management. SD-WAN provides faster routing between network points, offers high-quality services for critical applications, and increases the network agility; therefore, it has a larger market share in the SDN market as compared to applications such as SD-LAN and security applications. Considering the current market situation, it is mandatory for the vendors in the SDN market to enhance their offerings and cater to the growing demand for SDWAN solutions in order to gain significant market shares.
The IT and telecommunications vertical holds the largest market share among the verticals, which include retail, healthcare, BFSI, industrial and government. SDN provides telecom operators with flexible and highly responsive central control of network traffic through a programmable network. As a result, the operators gain benefits such as lower capital requirement, reduced operational costs, increased service agility and innovation, and new opportunities for revenue generation. SDN enables telecom operators to empower their partners with operational support systems (OSS) and business support systems (BSS) tools, thereby providing a more customer-centric delivery. Telecom operators are increasingly partnering with SDN providers to develop their own managed SDN services. Deutsche Telekom, Verizon, Vodafone, China Mobile, Telefonica or Telecom Italia, Telstra were the early adopters of SDN technology and among the first to offer SDN-based offerings that provide agility and enable digitization. In September 2019, AT&T completed the implementation of SDN in 65% of its network; the company plans on virtualizing 75% of its network by the end of 2020. Other telecom operators are expected to follow suite in the near future. Enterprises in other verticals such as retail, healthcare, and BFSI have realized the importance of SDN as it helps them to tap into customer data and preferences at the points of service, along the provision of network security. In June 2019, British Telecom deployed Juniper's Contrail Networking platform for SDN capabilities and fabric management; it also implemented AppFormix monitoring software to analyze both physical and virtual environments, along with the high-density QFX series Ethernet switches. The telecom operators are increasingly investing in SDN technology; therefore, partnering with telecom operators would provide the SDN providers with a number of opportunities
Cisco Systems Inc., Juniper Networks Inc., NEC Corporation, Brocade Communications Systems Inc., Intel Corporation, Big Switch Networks, Hewlett Packard Enterprise Company, Huawei Technologies Co. Ltd, Pica8 Inc., Ciena Corporation, Pluribus Networks Inc., and IBM Corporation are the major companies in the market that compete in terms of services offered and pricing. These companies primarily focus on the development of switches, network infrastructure, and controllers. Although the global players are dominating the market, regional players with small market shares also have a strong presence. The global players are expected to strengthen their presence worldwide through organic and inorganic growth during the forecast period. In July 2019, IBM Corporation and AT&T partnered for cloud and software-defined networking. AT&T Business Solutions migrated its internal software applications to the IBM cloud. IBM made AT&T Business its primary provider of SDN technology. Similar initiatives by other players are seen prominently in the market. For instance, in December 2018, Pluribus partnered with Edgecore to accelerate open networking market and increase the speed across datacenter networks. In October 2018, Juniper Networks partnered with Nutanix to improve network automation and security to act as a unified partner for computational application and storage. Therefore, it is compulsory for the new entrants in the SDN market to follow similar strategies to attain inorganic growth and expand their customer base.
TABLE 1 Market synopsis
Market Size
· 2018: USD 10,111.6 Million
· 2024: USD 120,647.3 Million
CAGR (2019–2024)
· 42.9%
Key Market Drivers
· Growing Adoption By Enterprises With Remote And Multiple Branch Office
· Increasing Demand For Cloud Services, Data Centers, And Server Virtualization
Key Market Opportunities
· Increased Adoption Of Private Cloud Computing Service
· Telecom Operators Introducing A Number Of Advanced Service Offerings
Key Vendors
· Juniper Networks
· Big Switch Networks
· Cisco Systems
· Pluribus Networks
· Ciena Corporation
The SOFTWARE DEFINED NETWORKING SDN Market market is projected to grow at a CAGR of 41.7% from 2017 to 2025.
Historical performance and future projections (2020–2030, USD Billion)
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View Subscription PlansSoftware-defined networking or SDN is basically transformational technology which enables service providers to create highly programmable networks with the help of workflow automation. SDN is an architectural model for networking that is controlled by a software application termed as controller. Controller enables the network administrator to manage, configure, and optimize network performance. Controller is a customizable application that provides programmatic solutions to troubleshoot all network challenges. It enables the technology users to reduce operational costs while improving the overall customer service life cycle.
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View Subscription PlansThis report applies a rigorous multi-stage research process combining primary interviews, secondary data sources, and bottom-up market modelling to ensure accuracy and completeness across all segments and geographies.
Base Year
2018
Historical Period
2017 – 2018
Forecast Period
2018 – 2025
Primary Interviews
150+
Historical data (2017–2018) and forecast period (2018–2025)
Our research process spans primary interviews with industry stakeholders combined with comprehensive secondary data analysis, validated through triangulation across multiple independent sources.
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View Subscription PlansMarket estimates by geography (2025)
InsightNorth America leads with $48.02B by 2025, while Asia Pacific is projected to grow fastest at a 44.3% CAGR.
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View Subscription Plans| REGION | 2017 | 2018 | 2025 | CAGR | SHARE |
|---|---|---|---|---|---|
| North America | $2.96B | $11.38B | $48.02B | 41.7% | 40% |
| Asia Pacific | $1.25B | $5.16B | $23.44B | 44.3% | 19% |
| Europe | $2.22B | $8.69B | $37.32B | 42.3% | 31% |
| Rest of the World | $784.60M | $2.93B | $11.86B | 40.4% | 10% |
| Total | $7.21B | $28.16B | $120.65B | 41.7% | 100% |
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View Subscription PlansTotal Market Size
$128.13B
| APPLICATION | REVENUE ($B) | GROWTH RATE | MARKET PENETRATION |
|---|---|---|---|
| Physical Network Infrastructure Solution | $50.77B | 41.7% | 77% |
| Network Virtualization and Automation Solution | $45.80B | 41.7% | 85% |
| others | $31.56B | 41.7% | 53% |
* Revenue projections based on 2025 estimates. Growth rates represent CAGR 2024–2030. Market penetration indicates current adoption rate within addressable market segments.
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Analytical insights on SOFTWARE DEFINED NETWORKING SDN Market covering market dynamics, competitive landscape, and strategic outlook.
The SOFTWARE DEFINED NETWORKING SDN Market market is projected to reach $48.02B by 2025, growing at 41.7% CAGR. The Physical Network Infrastructure Solution segment holds the largest share.
Over the years, SDN technology has transformed the field of networking by shifting the industry's focus from hardware to software-centric intent-based networking. The major end users driving the market are technology firms such as Facebook and Google that have created their own SDN switches; network service providers, such as Vodafone, have adopted the technology to optimize networks and create services such as Network as a service (NaaS); and large financial organizations.
The software-defined networking market is driven by various factors such as the growing demand for mobility services, cloud services, data centers, and server virtualization and increasing network complexities. However, security concerns and lack of technical expertise pose a major challenge to the existing market players. Nonetheless, the growing adoption of private cloud computing services offers market opportunities for software-defined networking players to offer comprehensive networking services to the cloud computing players
1.1.1
SDN is an enterprise networking innovation that has changed the way enterprises run their networks. SDN solutions address network challenges such as application performance, network complexities, and security while reducing the overall capital and operational expenditure. It has witnessed high adoption by enterprises with multiple branch offices as they mostly face the challenge of managing and securing their wide area network (WAN) and branch networks. Due to the growing bandwidth requirements, network complexity, increasing use of cloud resources, and growing security concerns, these enterprises find traditional networking solutions inefficient. Therefore, these enterprises are increasingly deploying SDN solutions in pursuit of gaining complete visibility and deliver applications across their distributed enterprise. Various telecommunication companies have conducted a number of surveys, which exihibit that enterprises are either planning to or have already invested in deploying SDN in 2020. In 2019, Vodafone interviewed around 1,200 network managers from multinational companies. The survey result found out that around 66% of the companies have invested in business intelligence, and around 56% of them have invested in machine learning or artificial intelligence, which rely on huge volumes of data to run effectively. Additionally, 88% have invested in new technologies to improve data security and have also made technological changes to become more trustworthy for their clients and other stakeholders. In the survey result mentioned above, one clear perspective among enterprises is that SDN technology will help them to achieve the goal of data security as it has proved to be the key technology that helps enterprises to achieve comprehensive security. Secure system starts with a secure network, and SDN technology offers the capability to effectively secure networks. Enterprises are willing to invest in SDN to secure their network architecture. Within SDN technology, network management is centralized by an SDN controller that maintains a universal view of the network. This virtualized network environment makes it easy to update security rules and put up firewalls quickly; therefore, response times are shorter for threats across all sites, devices, and the cloud. Another survey by Cisco in 2019 on the global networking trends suggested that around 60% of IT leaders believed that they have already attained advanced network strategy or will attain the same in 2020. Advanced network strategy includes investing and combining automation, SDN, analytics/AI, and security technologies across access, WAN, data center, and cloud network domains. These statistics display the significant adoption of SDN technology by enterprises.
A private cloud is a type of cloud computing architecture that provides superior control and security to its end users along with the key benefits of the cloud, such as scalability, longer uptime, pay-as-you-go model, and higher efficiency. The customer entirely maintains a private cloud and bears the associated cost of acquisition, deployment, and maintenance. It provides increased security and control, improved reliability, scalability, and overall system performance of the organization. SDN is increasingly being adopted as a solution to effective cloud networking. It transforms the networks and services to enable the use of cloud computing on a massive scale. The growth in private cloud computing services offers noteworthy market opportunities for SDN. The private cloud computing services market growth was estimated at USD 68.47 billion in 2017 and is expected to reach USD 147.86 billion in 2023 registering a CAGR of nearly 13%. The continuous evolution of IoT and smart technologies and the development of smart cities across the globe are expected to propel the adoption of private cloud computing services.
Cost and return on investment are the primary concerns among enterprises. Enterprises, when strategizing about investing in SD-WAN technology, are skeptical about the return on investment; this is because the deployment of SD-WAN requires a significant amount of research in terms of the workload, network structure, and support for legacy systems. In this case, enterprises are doubtful whether SD-WAN providers will be able to effectively take these factors into consideration. Vendor lock-in is another key concern among enterprises. Vendor lock-in is an economic term, wherein the customer using a product or service cannot easily transition to a competitor's product or service. These two key concerns have created resistance among enterprises in investing in technology. According to a survey conducted by SDxCentral in 2018 titled “Real-World SD-WAN Deployment—A Survey-Backed Analysis” a significant number of enterprises were either unaware or not confident about different vendors and their SD-WAN offerings. Additionally, the enterprises were concerned regarding SD-WAN implementation and that it will not offer return on investment. In 2019, a large number of enterprises shifted to the managed service model, wherein enterprises trusted the service providers to manage the deployment of SD-WANs.
In a traditional networking setup, the IT team in enterprises consisted of people aware of network infrastructures, storage, servers, and virtualization. However, with the implementation of SDN solutions such specializations are insufficient and IT professionals are required to have additional expertise that span across multiple technical domains. The desired skillset includes knowledge about application development, software management, and troubleshooting so that they can take advantage of network programmability. However, professionals with such capabilities are scarce and training someone with such requirements is challenging. Moreover, the transition in network infrastructure from traditional hardware-based architecture to software-oriented, programmable, automated, and converged architecture is divisive. In order to smoothen the transformation process, enterprises need to spread awareness among their employees and provide training to manage hybrid and converged solutions.
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Profiles of 110 companies operating in the SOFTWARE DEFINED NETWORKING SDN Market market, including revenue, employee count, and market positioning where available.
Showing 110 of 110 companies
Broadcom
Broadcom Inc. (Broadcom) provides a range of semiconductors, including complex digital and mixed-signal complementary metal oxide semiconductor (CMOS)-based devices and analog III-V-based products. It operates through four segments—wired infrastructure, wireless communications, enterprise storage, and industrial & others. The wired infrastructure segment provides a broad set of standard Ethernet switching technologies to deliver system-on-chips (SoCs) for high-performance computing applications and high-speed serializer/deserializer technology integrated with application-specific integrated circuits (ASICs). It also offers semiconductor solutions for set-top boxes, digital subscriber line cable, and fiber broadband access markets. The segment also provides transceivers that transmit and receive Ethernet data packets through copper wires or optical fiber cables. Broadcom provides optical laser and receiver components for Ethernet networking and access, metro, and long-haul telecommunication networks. The wireless communication segment offers a variety of radio frequency (RF) semiconductor devices that amplify and filter RF signals. The enterprise storage segment offers products designed to enable secure movement of digital data to and from host machines, such as servers, personal computers, and storage systems, to underlying storage devices including hard disk drives (HDDs) and solid-state drives (SSDs). The products offered by the company include enterprise and data center networking, home connectivity, broadband access, telecommunications equipment, smartphones, data center servers and storage, factory automation, power generation and alternative energy systems, and electronic displays. Geographically, the company operates in the US, China, and Singapore, among others.
HPE
Hewlett Packard Enterprise Company (HPE) is one of the leading providers of technology solutions to increase customers' traditional information technology. The company operates through three business segments, namely enterprise group (EG), financial services (FS), and corporate investments. EG segment offers a wide range of enterprise technology solutions for the next generation of applications, web services, and user experiences. It offers servers, storage, networking, and technology services. The company also offers networking devices such as switches, routers, wireless local area network (WLAN), and network management products. These networking devices provide consistent solutions that can be implemented in data centers, campuses, and offices and deliver software-defined networking (SDN) and unified communications capabilities. HPE also offers support and consulting services. The support services offerings cover various levels of customer support requirements and include HPE Foundation Care, HPE Proactive Care, HPE Datacenter Care, and Lifecycle Event services. HPE has a presence in the Americas, Asia-Pacific, Europe, and the Middle East & Africa.
IBM Corporation
Company Headquarters: US Founded: 1911 Workforce: ~2,82,100 Company Working: IBM Corporation is a global provider of integrated business solutions and services. Its Cloud & Cognitive Software division provides software for vertical and domain-specific solutions in a variety of application areas, as well as customer information control system and storage, analytics, and integration software solutions to support client mission on-premises workloads in the banking, airline, and retail industries. It also provides middleware and data platform software, such as Red Hat, which allows clients to run hybrid multi-cloud environments; cloud paks, WebSphere distributed, and analytics platform software, such as DB2 distributed, information integration, and enterprise content management; and IoT, blockchain, and AI/Watson platforms. Business consulting services, packaged software system integration, application management, maintenance, and support services, and finance, procurement, talent and engagement, and industry-specific business process outsourcing services are all available through the company's global business services segment. IT infrastructure and platform services are provided by the company's global technology services business, as well as project, managed, outsourcing, and cloud-delivered services for enterprise IT infrastructure environments and IT infrastructure support services. The cognitive solutions segment offers a cognitive computing platform called Watson, which interacts in natural language, processes big data, and learns from interactions with people and computers. This segment also provides data and analytics solutions, data management platforms, cloud data services, enterprise social software, and transaction processing software that run mission-critical systems in the banking, airline, and retail industries. IBM provides speech recognition products using computer hardware and software-based techniques to identify and process the human voice and convert the spoken words into computer text. Furthermore, the company is also investing heavily in designing and developing automatic speech recognition technology-based products, which are capable of authenticating users via their voice and performing an action based on the instructions defined by the human.
Pluribus Networks
Pluribus Network Inc. is a provider of network virtualization, software-defined fabric networking, and performance analytics software solutions used to build public and private clouds for improving performance, reliability, and service velocity. The company provides various types of products such as Netvisor ONE OS, Adaptive Cloud Fabric, open networking switches, Pluribus UNUM, Insight Analytics, and VirtualWire. It also provides solutions for distributed cloud, data center interconnect, network and traffic segmentation, lab automation, and network performance monitoring.
Huawei Technology Co. Ltd
Huawei Technologies Co. Ltd (Huawei) is one of the leading providers of global information and communications technology (ICT) solutions. The company offers competitive solutions, products, and services to telecom service providers, enterprises, and consumers. The company operates through four business divisions—carrier business, enterprise business, consumer business, and Huawei cloud. The carrier segment offers products and services in 5G networks, NB-IoT, and all cloud networks covering NFV and SDN contracts. Additionally, the carrier business offers testing for 5G and all-cloud networks and digital O&M systems for data centers. The enterprise segment offers various solutions for the cloud, big data, campus networks, data centers, and IoT domains. The consumer business segment includes high-tech products that offer a premium user experience in end-use applications. Huawei Cloud is the newest segment include by the company that offers customers with stable, reliable, secure, and trustworthy cloud services for various industry verticals such as manufacturing, healthcare, e-commerce, connected vehicles, high-performance computing, IoT, and SAP applications. The company has its presence in Europe, Middle East & Africa (EMEA), Asia-Pacific, and the Americas.
NEC Corporation
Founded in 1899, NEC Corporation is one of the leading companies in IT integration and network technologies providing products & solutions that cross utilize the company's experience and global resources. The company is headquartered in Japan and has offices across the globe. Other than Japan, the company serves Americas, EMEA and Asia-Pacific regions. One of the subsidiaries of the company is NEC Corporation of America.The company operates in four business segments namely, public, enterprise, telecom carrier and system platform business. The public business segment includes safe, secure and efficient social solutions for domestic and foreign governments, governmental agencies, public institutions, financial institutions and other organizations. The enterprise business segment includes IT solutions to meet private-sector demand, centering on manufacturing and retail, simultaneously launching new services to help create new value for customers. In the telecom carrier business the company supplies equipments required for network implementation to telecom carriers. The system platform business provides products for business, like mobile terminals, network equipment, computer equipment, software products and service platforms, and solutions based on them. The public business segment has the highest share of revenue. It contributed USD 6.8 billion in 2016 which is approximately 27% of company’s total revenue.
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SOFTWARE DEFINED NETWORKING SDN Market