​Go software-defined or go home? Market prepares for 50 percent growth boom

"Cloud computing and the 3rd Platform have driven the need for SDN..."

The worldwide software-defined networking (SDN) market - comprising physical network infrastructure, virtualisation/control software, SDN applications (including network and security services), and professional services - will have a compound annual growth rate (CAGR) of 53.9 percent from 2014 to 2020 and will be worth nearly $US12.5 billion in 2020.

IDC findings back up industry claims that software-defined networking continues to gain market traction, built around its ability to provide an “innovative architectural model” capable of enabling automated provisioning, network virtualisation, and network programmability for data centres at cloud-providers and enterprise networks.

Although SDN initially found favour in hyper-scale data centres and at large-scale cloud service providers however, it is winning adoption in a growing number of enterprise data centres across a broad range of vertical markets.

Indeed, SDN delivers the agility, flexibility, and programmability that align closely with IDC's 3rd Platform for IT, especially for public and private cloud rollouts.

"Cloud computing and the 3rd Platform have driven the need for SDN, which will represent a market worth more than $US12.5 billion in 2020,” says Rohit Mehra, Vice President, Network Infrastructure, IDC.

“Not surprisingly, the value of SDN will accrue increasingly to network-virtualisation software and to SDN applications, including virtualised network and security services.

“Large enterprises are now realising the value of SDN in the data centre, but ultimately, they will also recognise its applicability across the WAN to branch offices and to the campus network.”

While the physical network, encompassing datacenter switches, will still account for the largest single segment of the SDN market in 2020, Mehra believes the fastest growth will be found in the two software categories – the virtualisation/control layer and SDN applications - which together will be worth approximately $US5.9 billion.

Consequently, IDC expects the virtualisation/control layer software market to reach $US2.4 billion in 2020, with a CAGR of nearly 64 percent during the forecast period.

SDN applications - including Layer 4-7 network and security services and analytics - are forecast to achieve a CAGR of 66 percent through 2020, when they will account for revenue of more than $US3.5 billion.

“While networking hardware will continue to hold a prominent place in network infrastructure, SDN is indicative of a long-term value migration from hardware to software in the networking industry,” adds Brad Casemore, Director of Research for Data centre Networking, IDC.

“For vendors, this will portend a shift to software- and service-based business models, and for enterprise customers, it will mean a move toward a more collaborative approach to IT and a more business-oriented understanding of how the network enables application delivery.”