Network Function Virtualization (NFV) Market to Reach $180.67 Bn, Globally, by 2031 at 23.8% CAGR: Allied Market Research
Decrease in capital and operational expenditure offered by network function virtualization and increase in deployment of virtualized software among enterprise data centers including internet service providers (ISP) and cloud service providers (CSP) and rapid automation across IT sectors drive the growth of the global network function virtualization (NFV) market.
PORTLAND, Ore., Aug. 5, 2022 /PRNewswire/ -- Allied Market Research published a report, titled, "Network Function Virtualization Market by Component (Hardware, Software, Services), by Enterprise Size (Large Enterprises, SMEs), by End User (Service Providers, Data Centers, Enterprises): Global Opportunity Analysis and Industry Forecast, 2021-2031." According to the report, the global network function virtualization industry generated $21.90 billion in 2021, and is estimated to reach $180.67 billion by 2031, witnessing a CAGR of 23.8% from 2022 to 2031. The report offers a detailed analysis of changing market trends, top segments, key investment pockets, value chain, regional landscape, and competitive scenario.
Drivers and Opportunities
Decrease in capital and operational expenditure offered by network function virtualization and increase in deployment of virtualized software among enterprise data centers, including internet service providers (ISP) and cloud service providers (CSP) and rapid automation across IT sectors drive the growth of the global network function virtualization market. However, increased network security risks in network function virtualization hamper the market growth. On the other hand, increase in demand for data-intensive applications and the need for cloud-based services present new opportunities in the coming years.
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The hardware segment to rule the roost during the forecast period
Based on component, the hardware segment captured the highest market share in 2021, contributing to nearly half of the global network function virtualization market, and is expected to maintain its leadership status during the forecast period. The virtualization of network functions reduces dependency on dedicated hardware appliances for network operators, and allows for improved scalability and customization across the entire network. Such benefits provide numerous opportunities for the growth of the hardware segment. However, the services segment is projected to witness the largest CAGR of 25.2% from 2022 to 2031. This is because services play a vital role in the NFV market. Services focus on meeting client requirements, including reduced cost and enhanced software performance.
The large enterprises segment to maintain its dominance during the forecast period
Based on eterprise size, the large enterprises segment held the highest market share in 2021, contributing to around two-thirds of the global network function virtualization market, and is expected to maintain its dominance during the forecast period. This is because the combination of orchestration, automation, and programmability provided by virtualization enables the IT department of large enterprises to become more agile. However, the SMEs segment is projected to witness the largest CAGR of 25.0% from 2022 to 2031. Surge in need to make business more streamlined, and rise in need to improve efficiency by shortening the time taken to troubleshoot a solution majorly drive the growth of the network function virtualization among small- & medium-sized businesses.
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The data centers segment to achieve the fastest growth during the forecast period
Based on end user, the enterprises segment held the highest market share in 2021, contributing to nearly two-fifths of the global network function virtualization market. Increased focus of enterprises on re-architecting their networking infrastructure to achieve automation, network security, and application performance is one of the major factors leading to significant adoption of network function virtualization technologies among enterprises. However, the data centers segment is projected to witness the largest CAGR of 24.6% from 2022 to 2031. This is because network function virtualization offers data center providers with advanced capabilities such as secured sharing on network, managing large network, efficiency, and flexibility of networking operations.
North America to maintain its dominance in terms of revenue by 2031
Based on region, North America contributed to the highest market share in terms of revenue in 2021, accounting for nearly two-fifths of the global network function virtualization industry, and is expected to maintain its dominance in terms of revenue by 2031. The NFV market in North America is aided by the early and fast adoption of technologies, such as cloud computing, software defined everything (SDx), and IoT. The favorable standards and networking regulations help in boosting the market growth in this region. However, Asia-Pacific is projected to manifest the fastest CAGR of 26.2% during the forecast period. This is because the region has a robust IT infrastructure and solid software and service offerings. In addition, rise in penetration of cloud-based services drive growth of the market in this region.
Leading Market Players
The report analyzes these key players of the global network function virtualization market. These players have adopted various strategies such as expansion, new product launches, partnerships, and others to increase their market penetration and strengthen their position in the industry. The report is helpful in determining the business performance, operating segments, product portfolio, and developments by every market player.
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