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Summary

Over the next year, operators will either begin or continue network transformation with NFV. In response, vendors will continue to push cloud-native 5G platforms that support hybrid networking; and NFV will remain an important factor in optimizing network operations. Operators and vendors need to assure customers that they have a strong 5G value proposition in place with the right software, business models, and partner ecosystem for service delivery in the next generation of networking.

NFV investment needs to continue in wake of COVID-19

Omdia's NFV technology forecast represents the sum total of multiple regional and software product forecasts. Starting from an estimated $17 billion in 2019, the market for global NFV software and services is projected to hit $45 billion in 2025 due to a greater reliance on software to control the cost of network infrastructure and 5G commercialization. Drivers for the forecast are network agility, lower costs, and new service delivery. Other forecast drivers are the continued momentum around orchestration platforms, increased cloud-native architecture implementations, and more demand for assurance and analytics into NFVI platforms.

It is likely the NFV investment will slow over the next several months in response to the COVID-19 pandemic. However, Omdia believes operators cannot lose sight of the long-term need for network virtualization, with NFV as one of the key building blocks. A cloud-native network infrastructure that supports containerized network functions, edge compute, network slicing, and E2E orchestration is going to be fundamental to compete in 5G. So, NFV and other carrier software investments should continue over the next five years.

Appendix

Further reading

2019 Trends to Watch: NFV, SPT002-000285 (December 2019)

Dynamic service chaining in 2020, SPT002-000259 (September 2019)

NFV: Market Opportunity Analysis, SPT002-000244 (August 2019)

Author

Stephanie Gibbons, Principal Analyst, Service Providers & Communications

[email protected]

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