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Global Software Defined Networking (SDN) Market: Burgeoning Subscriber Numbers to Increase SDN Adoption amongst Telecom Service Providers, says TMR

Posted on Sep 30, 2016

The global software defined networking (SDN) market is highly fragmented in nature, with the presence of multiple players in this industry across different categories including hardware, service, and software providers. The market is still at its nascent stage and not all players are operating across the whole value chain. The existing players are focusing on customized services to achieve maximum consumer retention in this highly competitive marketplace, finds Transparency Market Research (TMR) in a new study. Some of the key players in the market are Cisco, IBM, VMware, Juniper Networks, NEC, HP, and Alcatel-Lucent.

“Mergers and acquisitions have become the most commonly followed strategy by the players in the SDN market to sustain the competition. The competition is expected to increase as new entrants in the market are likely to capitalize on the increasing demand for flexible and reliable systems for networking,” says the author of the report.

The global SDN market was valued at US$1.08 bn in 2015 and is estimated to reach US$3.52 bn by 2018, rising at a CAGR of 61.5% from 2012 to 2018. Based on end-users, enterprises was the leading segment by revenue till 2014. However, due to the increasing use of mobile data, telecommunication service providers will be the largest segment through 2018, expanding at an impressive CAGR of 64.8% during the forecast period. 

Rising Penetration of Mobile Devices to Put North America in Leading Position

Geographically, North America will continue to be the leading segment until 2018, representing 56.6% of the overall market revenue. The growth of this region can be attributed to the rising penetration of mobility and growth of cloud services. However, due to increasing popularity of bring your own device (BYOD) and increasing access to the internet through smartphones, Asia Pacific is expected to rise at a significant CAGR during the same period.

Shifting Preferences Towards Cloud-based Systems to Trigger Implementation of SDN

The increasing penetration of mobile devices such as smartphones and tablets, especially in Asia Pacific, is propelling the growth of the global software defined networking market. The burgeoning mobile subscriber base has encouraged the mobile network operators to upgrade their existing systems. “Increasing financial transactions on mobile phones coupled with the advent of budget devices is driving the need for high-speed data and low latency switches,” says a TMR analyst. This factor is, therefore, leading to increasing adoption of SDN. Moreover, the large-scale migration from conventional storage systems to cloud-based infrastructure for storing, computing, and networking is increasing the implementation of SDN across telecom provider platforms and cloud platforms. These factors are collectively fuelling the growth of the global market.

Interoperability Issues to Limit Large-scale Adoption of SDNs

The interoperability challenges associated with SDNs is restraining the growth of the global software defined networking market. This is because SDN technology requires a new and different hardware and software setup. In addition, it requires standard protocols and APIs as it is not able to perform on legacy network infrastructure. Moreover, network administrators have been facing problems in finding the best SDN solutions due to lack of standardization. However, with the provision of a complete stack of networking hardware and software and standardization of technology, the impact of these restraints is expected to subside in future. On the other hand, the increasing adoption of BYOD policy in IT organizations is likely to boost the implementation of SDN solutions in the forthcoming years.

The information presented in this review is based on a Transparency Market Research report, titled, ‘Software Defined Networking (SDN) Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2012 – 2018.’

The report segments the global SDN market into three segments: 

By End Users

  • Enterprises
  • Cloud service providers
  • Telecommunications service providers

By Solutions

  • SDN Switching
  • SDN Controllers
  • Cloud Provisioning and Orchestration
  • Others (Security and Services)

By Geography

  • North America
  • Europe
  • Asia Pacific
  • RoW

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