Virtual customer premises equipment (VCPE) is a method of delivering network services such as virtual private network connectivity, routing, and firewall security to organizations by making use of software instead of hardware devices. Virtual customer premise equipment enables service providers to manage and remotely configure devices, accelerate and simplify service delivery, and allow customers to adjust existing services on-demand. Traditional customer premises equipment (CPE) consists of specialized service provider-owned hardware devices. Service providers are required to send technicians’ onsite to configure and provision customer premises equipment, which makes deployment of new services expensive and time-consuming. On the contrary, virtual customer premises equipment abstracts the intelligence of traditional CPE devices into software-based functionalities residing in remote data centers. The software utilizes inexpensive, simple, on-site hardware. Such model allows consolidation of individual, specialized devices into a general purpose box for cost-effectiveness and convenience. VCPE is a major driver of network functions virtualization, by virtue of its ability to speed up service delivery and simplify operations.
The rising demand for mobility and cloud based solutions, and the cost benefits due to reduction in hardware maintenance are the major factors driving the growth of the VCPE market. The proliferation of private clouds among organizations is promoting the growth of cloud-based applications, which is boosting the VCPE market. VCPE allows the transformation of physical network infrastructure into sharable virtual resources, capable of being accessed from any location without the use of networking hardware. Telecom companies handle huge amounts of data that is stored in data centers. VCPE solutions enable telecom companies to geographically transfer their business functions with ease, which is another major factor fueling the growth of the VCPE market. Virtualization technology enables group discussions, information exchange, and online programs, which has resulted in the increasing adoption of VCPE solutions by the education industry. However, lack of skilled workforce, and reliability and security concerns of virtual architecture pose challenges in the growth of VCPE market.
The VCPE market can be categorized by solutions, by services, by service models, by areas of application, by organization type, and by geography. By solutions, the market can be further segmented into controller and application platform, virtual switches, orchestration and infrastructure management, virtual routers, and compliance and security. By services, the market can be categorized into managed services and professional services. On the basis of service models, the market can be further categorized into infrastructure as a service (IaaS), platform as a service (PaaS), and others. Furthermore, by areas of application, the market can be sub-segmented into healthcare, manufacturing, information technology enabled services (ITES), public sector utilities and government, telecom service providers and data centers, and banking, financial services and insurance (BFSI). Moreover, by organization type, the market can be divided into small and medium enterprises (SME’s) and large enterprises. Geographically the market is segmented into North America, South America, Middle East and Africa, Asia-Pacific, and Europe.
The key players operating in the virtual customer premises equipment market include IBM Corporation, Juniper Networks, Inc., Cisco Systems Inc., Brocade Communication Systems, Inc., Hewlett Packard Enterprises, Arista Networks, Inc., Dell Inc., Telefonaktiebolaget LM Ericsson, NEC Corporation, and Versa Networks.