Vendors set for windfall as NFV revenues hit $38 billion in 2022

News

Worldwide NFV revenues are set to reach $38 billion by 2022, with established vendors in line to be the biggest beneficiaries.

The NFV software market will see a growth rate of 55 percent while NFV services will grow 50 percent between 2017 and 2022, according to figures from ABI Research. Hardware spending will fall meanwhile.

In Europe, the overall market is set to see a 53 percent compound annual growth rate in the period.

However, North America will provide the bulk of overall revenues, with $13 billion of NFV-related investments during 2022.

“Early contracts and market trends illustrate the biggest winners are likely to be the established vendors, including Ericsson, Huawei, and Nokia, as well as specialists like Amdocs and Netcracker, with systems integration becoming more important each day,” said Neha Pachade, Senior Analyst at ABI Research.

Pachade said the forecasts indicated NFV will become a “sizeable opportunity” for vendors.

However, she cautioned that it is not clear if NFV will cannibalise existing hardware product lines or create new market use-cases.

“In 2015 and 2016, the market experienced some early successes but mostly reconsiderations and failures with NFV,” she added. “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.”

Nachade said, for the time being, NFV is mostly considered a cost-cutting exercise, but that this will change as 5G necessitates a broader transformation after 2020.

Earlier this month, Ericsson launched a new solution to help operators manage existing technologies on their networks while adding virtualised capabilities.

Also earlier this month, Telefónica announced it would deploy SD-WAN solutions from the Nokia-owned Nuage Networks as it looks to boost its enterprise offerings.