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SDN Market Expected to Experience Strong Growth

Pete Goldin
Editor and Publisher
APMdigest

SDN is not expected to truly catch on in 2016, according to some experts on APMdigest's 2016 predictions list, however a recent International Data Corporation (IDC) forecast says: the worldwide software-defined networking (SDN) market — comprising physical network infrastructure, virtualization/control software, SDN applications (including network and security services), and professional services — will have a compound annual growth rate (CAGR) of 53.9% from 2014 to 2020 and will be worth nearly $12.5 billion in 2020.

IDC says software-defined networking continues to gain market traction as an innovative architectural model capable of enabling automated provisioning, network virtualization, and network programmability for datacenters at cloud-providers and enterprise networks. Although SDN initially found favor in hyperscale datacenters and at large-scale cloud service providers, it is winning adoption in a growing number of enterprise datacenters across a broad range of vertical markets.

While the physical network, encompassing datacenter switches, will still account for the largest single segment of the SDN market in 2020, per the IDC research, the fastest growth will be found in the two software categories – the virtualization/control layer and SDN applications – which together will be worth approximately $5.9 billion. IDC expects the virtualization/control layer software market to reach $2.4 billion in 2020, with a CAGR of nearly 64% during the forecast period. SDN applications – including Layer 4-7 network and security services and analytics – are forecast to achieve a CAGR of 66% through 2020, when they will account for revenue of more than $3.5 billion.

"Cloud computing and the 3rd Platform have driven the need for SDN, which will represent a market worth more than $12.5 billion in 2020. Not surprisingly, the value of SDN will accrue increasingly to network-virtualization software and to SDN applications, including virtualized network and security services. Large enterprises are now realizing the value of SDN in the datacenter, but ultimately, they will also recognize its applicability across the WAN to branch offices and to the campus network," said Rohit Mehra, VP, Network Infrastructure at IDC.

“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. 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," said Brad Casemore, Director of Research for Datacenter Networking at IDC.

Pete Goldin is Editor and Publisher of APMdigest

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SDN Market Expected to Experience Strong Growth

Pete Goldin
Editor and Publisher
APMdigest

SDN is not expected to truly catch on in 2016, according to some experts on APMdigest's 2016 predictions list, however a recent International Data Corporation (IDC) forecast says: the worldwide software-defined networking (SDN) market — comprising physical network infrastructure, virtualization/control software, SDN applications (including network and security services), and professional services — will have a compound annual growth rate (CAGR) of 53.9% from 2014 to 2020 and will be worth nearly $12.5 billion in 2020.

IDC says software-defined networking continues to gain market traction as an innovative architectural model capable of enabling automated provisioning, network virtualization, and network programmability for datacenters at cloud-providers and enterprise networks. Although SDN initially found favor in hyperscale datacenters and at large-scale cloud service providers, it is winning adoption in a growing number of enterprise datacenters across a broad range of vertical markets.

While the physical network, encompassing datacenter switches, will still account for the largest single segment of the SDN market in 2020, per the IDC research, the fastest growth will be found in the two software categories – the virtualization/control layer and SDN applications – which together will be worth approximately $5.9 billion. IDC expects the virtualization/control layer software market to reach $2.4 billion in 2020, with a CAGR of nearly 64% during the forecast period. SDN applications – including Layer 4-7 network and security services and analytics – are forecast to achieve a CAGR of 66% through 2020, when they will account for revenue of more than $3.5 billion.

"Cloud computing and the 3rd Platform have driven the need for SDN, which will represent a market worth more than $12.5 billion in 2020. Not surprisingly, the value of SDN will accrue increasingly to network-virtualization software and to SDN applications, including virtualized network and security services. Large enterprises are now realizing the value of SDN in the datacenter, but ultimately, they will also recognize its applicability across the WAN to branch offices and to the campus network," said Rohit Mehra, VP, Network Infrastructure at IDC.

“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. 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," said Brad Casemore, Director of Research for Datacenter Networking at IDC.

Pete Goldin is Editor and Publisher of APMdigest

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The Latest

According to Auvik's 2025 IT Trends Report, 60% of IT professionals feel at least moderately burned out on the job, with 43% stating that their workload is contributing to work stress. At the same time, many IT professionals are naming AI and machine learning as key areas they'd most like to upskill ...

Businesses that face downtime or outages risk financial and reputational damage, as well as reducing partner, shareholder, and customer trust. One of the major challenges that enterprises face is implementing a robust business continuity plan. What's the solution? The answer may lie in disaster recovery tactics such as truly immutable storage and regular disaster recovery testing ...

IT spending is expected to jump nearly 10% in 2025, and organizations are now facing pressure to manage costs without slowing down critical functions like observability. To meet the challenge, leaders are turning to smarter, more cost effective business strategies. Enter stage right: OpenTelemetry, the missing piece of the puzzle that is no longer just an option but rather a strategic advantage ...

Amidst the threat of cyberhacks and data breaches, companies install several security measures to keep their business safely afloat. These measures aim to protect businesses, employees, and crucial data. Yet, employees perceive them as burdensome. Frustrated with complex logins, slow access, and constant security checks, workers decide to completely bypass all security set-ups ...

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In MEAN TIME TO INSIGHT Episode 13, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses hybrid multi-cloud networking strategy ... 

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In 2025, enterprise workflows are undergoing a seismic shift. Propelled by breakthroughs in generative AI (GenAI), large language models (LLMs), and natural language processing (NLP), a new paradigm is emerging — agentic AI. This technology is not just automating tasks; it's reimagining how organizations make decisions, engage customers, and operate at scale ...

In the early days of the cloud revolution, business leaders perceived cloud services as a means of sidelining IT organizations. IT was too slow, too expensive, or incapable of supporting new technologies. With a team of developers, line of business managers could deploy new applications and services in the cloud. IT has been fighting to retake control ever since. Today, IT is back in the driver's seat, according to new research by Enterprise Management Associates (EMA) ...

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