Software defined networking (SDN) is an approach to network management that allows dynamic and programmatically efficient network configuration to enhance network performance and monitoring making it more similar to cloud computing than conventional network management. This helps operators to manage the entire network consistently irrespective of underlying network technology. This paradigm enables network administrators to establish data flow control across the entire network instead of individual devices. This also helps in creating secure paths for data flow with relative ease.
The global Software Defined Networking market is estimated to account for US$ 5690.1 Mn in terms of value by the end of 2019.
Market Dynamics- Drivers
- Increasing need for mobility is expected to drive growth of the global software defined networking (SDN) market during the forecast period
Rising use of mobile data has supported mobile network operators to upgrade their existing systems, in order to manage to expand consumer base and applications & devices. Customers use mobile phones for conducting financial transactions, which in turn, is driving the need for low latency and high-speed switches. Telecommunication service providers employ Operations Support Systems (OSS) to manage and support their business through provisioning services. However, re-architecting the entire network to accommodate OSS solutions is a cumbersome task. Companies such as Deutsche Telekom are aiming to establish an SDN model to simplify network operations while reducing costs. Thus, these factors are expected to drive growth of the global software defined network (SDN) market during the forecast period.
- Growing cloud service is expected to propel the global software defined networking (SDN) market growth over the forecast period
Many organizations have started storing, computing, and networking through cloud-based infrastructure. This is owing to the fact that cloud infrastructure is flexible, agile, and cost-efficient. A clear understanding of SDN technology is necessary to implement cloud computing services effectively within an organization. SDN technology can address the concurrent needs for virtualization, mobility, agility, and management in modern network environments and tackle the reliable delivery of new services and applications in the cloud. Currently, the majority of enterprises have infrastructure-based solutions such as infrastructure-as-a-service (IAAS). Thus, these factors are expected to propel the global software defined networking (SDN) market growth over the forecast period.
North America region held dominant position in the global software defined networking market in 2019, accounting for 36.6% share in terms of value, followed by Asia pacific, Europe, Latin America, and Middle East & Africa (MEA) respectively.
Figure 1: Global Software Defined Networking Market Share (%), in terms of Value, By Region, 2019
Market Dynamics- Restraints
- Lack of standardization in SDN technology is expected to restrain growth of the global software defined networking (SDN) market during the forecast period
Currently, there are no particular standards for SDN controllers, which is a major problem in finding the best and the most adaptable standard for the environment. Administrators are focused on creating customized solutions and investing more time in trying to find and adopt the best SDN solution. The conventional networking requires separate networks and management applications for wireless connectivity. Moreover, many SDN offerings are still incomplete and require extensive customization. Thus, many IT organizations are building and creating their own standards for SDN technology. Thus, such factors are expected to restrain growth of the global software defined networking (SDN) market during the forecast period.
- Challenges associated with interoperability are expected to hamper the global software defined network (SDN) market growth over the forecast period
Emerging service needs to perform well in the existing network, in order to achieve widespread implementation. Although vision SDN technology is lucrative, many vendors and service providers find it challenging to move from their legacy systems. This is due to the fact that SDN technology requires a new and different hardware and software setup. Moreover, it requires standard protocols and APIs. Besides, SDN network cannot perform on legacy network infrastructure. Interoperability is a key challenge in success of SDN technology at present. Therefore, these factors are expected to hamper the market growth over the forecast period.
Software Defined Networking Market Report Coverage
||Market Size in 2019:
||USD 5,690.1 Mn
|Historical Data for:
||2017 to 2019
||2020 to 2027
|Forecast Period 2020 to 2027 CAGR:
||2027 Value Projection:
||USD 26,3331.2 Mn
- North America: U.S., Canada
- Latin America: Brazil, Argentina, Mexico, Rest of Latin America
- Europe: Germany, U.K., Spain, France, Italy, Russia, Rest of Europe
- Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, Rest of Asia Pacific
- Middle East and Africa: GCC Countries, South Africa, and Rest of Middle East and Africa
- By End-users: (Enterprises, Cloud Service Providers, and Telecommunications Service Providers)
- By Solutions: (SDN Switching, SDN Controllers, Cloud Provisioning and Orchestration, and Others (Security and Services))
Alcatel-Lucent, Huawei Technologies, Cisco Systems, Inc., Juniper Networks, NEC Corporation, IBM Corporation, Google Inc., VMware, and Hewlett Packard Company.
- Increasing need for mobility
- Growing cloud service
|Restraints & Challenges:
- Lack of skilled personnel
- Rising acceptance of BOYD culture can present lucrative growth opportunities
Bring your own device (BOYD) is a policy allowing employees to bring their personal devices to their workplace and use both devices to access company information and application. BOYD is an emerging trend in the SDN market that poses major opportunities. Many enterprises do not allow employees to bring their devices at workplace due to the risk of company’s confidential data and information leakage. However, with the security benefits of SDN technology, they are allowing BYOD policy in their organization. It is estimated that by coming years, majority of the IT organization will allow BYOD policy to their employees as they would find it more familiar to use and thus, may become more productive.
- Research and development activities among market players can provide major business opportunities
Key players operating in the market are focused on research and development activities, in order to introduce novel products and gain a competitive edge in the market. For instance, in 2013, IBM introduced a new software solution that provides scalable overlays via SDN technology based on IBM’s DOVE (Distributed Overlay Virtual Ethernet). This software is supposed to provide faster provisioning and more scalable virtual networks. Furthermore, in 2012, VMware introduced vFabric, a cloud application platform that includes application performance management from VMware’s Hyperic monitoring tool.
Figure 2: Global Software Defined Networking Market Value (US$ Mn), 2017 - 2027
The global software defined networking market was valued at US$ 5,690.1 Mn in 2019 and is estimated to reach US$ 26,3331.2 Mn by 2027 exhibiting a CAGR of 61.5% between 2020 and 2027.
- Mergers and acquisitions among market players is a major trend
Major market players are involved in merger and acquisition activities, in order to enhance the market presence. For instance, in 2012, Cisco acquired vCider, an expert in the development of virtual network overlay technology for secure data center infrastructure virtualization. Furthermore, in February 2012, Juniper Networks acquired Mykonos Software, a provider of Intrusion Deception Systems that protect Websites and Web applications.
- Development of open source SDN is another major trend
Key market players in the market are focused on the development of open source SDN, in order to expand their consumer base and gain a significant advantage. For instance, Open Network Operating System (ONOS) is an open-source SDN controller used to build next-generation SDN/NFV solutions. It acts as an extensible, modular, distributed SDN controller.
Value Chain Analysis
The important participants of SDN value chain include Network Equipment Providers (NEPs), service providers, enterprises and end users. NEPs include Alcatel-Lucent, Cisco, IBM, NEC, VMware and Juniper Networks among others. They develop controller’s functions, virtual switches and routers. They offer entire range of products and turnkey services, which will be the key to drive SDN into mainstream data center applications. SDN technology is becoming a long-term threat for traditional hardware based networking equipment suppliers as new SDN entrants are emerging and dominating the legacy networking system. In addition, intense competition in the market and escalating network complexity has been generating demand for network efficiency, network resiliency as well as for cloud services.
Key players operating in the global software defined networking (SDN) market are Alcatel-Lucent, Huawei Technologies, Cisco Systems, Inc., Juniper Networks, NEC Corporation, IBM Corporation, Google Inc., VMware, and Hewlett Packard Company.
- Key companies are focused on business and capacity expansion, in order to enhance the market presence. For instance, in March 2018, Huawei Technologies inaugurated a software defined network innovation lab in IIIT Bangalore.
- Major market players are focused on product launches, in order to expand the product portfolio. For instance, in December 2019, Juniper Networks introduced SD-WAN Offering with LAN Functionality.