Nearly 81% of respondents to a IHS Markit survey say that they are likely to deploy Network Functions Virtualization (NFV) by 2017. Nearly 59% of the respondents said that they have already deployed NFV or expect to do it by the end of the current year.
Globally most of the telcos are planning to virtualize their networks to reduce hardware and operating costs. It is believed to lead to faster deployment of services thus offering significant competitive advantage to the service providers. Pressure from OTT to innovate and reduce their time to market are the key reasons for them to deploy Virtualization.
“Between 2015 and 2020, the service provider NFV market will grow at a robust compound annual growth rate (CAGR) of 42 percent — from $2.7 billion in 2015 to $15.5 billion in 2020,” says Michael Howard, Senior Research Director, Carrier Networks, at IHS Markit in a press statement.
NFV represents the shift in the telecom industry from a hardware focus to a software focus, with operators making much larger investments in software than in server, storage and switch hardware. “NFV software will comprise 80 percent of the $15.5 billion total in 2020 — or around $4 out of every $5 spent on NFV,” said Howard.
The service providers would be spending on NFV hardware and software to deliver software-based services to customers via the consumer virtual customer premises equipment (vCPE) and enterprise vCPE use cases. The vCPE use case opportunity, including spending to deploy consumer and enterprise services, is forecast to reach over $1.5 billion worldwide by 2020, says the press release.