Software defined networking market to reach $35 billion by 2018
The software-defined networking (SDN) market is expected to surpass $35 billion in the next five years, far higher than previously reported, according to new research by Plexxi, SDNCentral and Lightspeed Venture Partners.
Adoption of SDN technology has accelerated in recent years from vendor sales of $10 million in 2007 to $252 million last year. Companies are turning to software-centric approaches to control their computer networks as they move beyond decades-old infrastructure that wasn’t designed for today’s cloud computing.
“The market for software-defined networking is growing faster than just about anyone predicted,” said Matthew Palmer, partner at SDNCentral. “While past efforts to measure the size of the SDN market focused on existing deployments, a more accurate analysis of companies that are factoring SDN compatibility into their current buying decisions shows that the shift toward software-defined networking is already having a massive impact on businesses.”
The emergence of the software-defined networking market is supported by growth in venture capital investment in SDN-focused companies. Venture capital funding of SDN-related companies rose from $10 million in 2007 to $454 million in 2012, the research found.
“Venture capitalists are focused on the disruptive potential of software-defined networking and its relationship to the software-defined datacenter as a whole,” said Chris Schaepe, co-founder and partner of Lightspeed Venture Partners. “We are seeing strong technical teams leaving incumbent vendors to implement the next wave of innovation throughout the network ecosystem, including network services and security.”
The research, compiled from publicly available market data and SDNCentral’s proprietary market-sizing models, also found:
The percentage of expenditures on SDN-enabled network equipment is expected to rise from 2 percent this year to 40 percent in 2018.
The network virtualization software market will reach $1.2 billion by 2018, up from $10 million this year.
Despite the shift to software-defined networking, hardware will continue to play a significant role in the network infrastructure, the research found. By 2018, 46 percent of overall datacenter network spending will be on SDN-enabled optical, switching and routing hardware while a slightly higher number – 49 percent – will be spent on non-SDN-enabled datacenter optical switching and routing.
“The rapid growth of software-defined networking will have far-reaching impacts beyond the network,” said Michael Bushong, vice president of technical marketing at Plexxi. “This new research shows that companies are already making buying decisions based on transitioning their networks to SDN. The momentum in the SDN market will accelerate in the next five years.”
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