The software-defined networking (SDN) market is expected to surpass $35 billion in the next five years, far higher than previously reported, according to research by start-up vendor Plexxi, website SDNCentral and venture capital firm Lightspeed Venture Partners. Market researcher IDC had forecast the market to be $3.7 billion by 2016.
Adoption of SDN technology has accelerated in recent years from vendor sales of $10 million in 2007 to $252 million last year, Plexxi and its research partners say, given the demands for more software control over decades-old network hardware with the advent of virtualization, mobility and cloud computing. Also, venture capital funding of SDN-related companies rose from $10 million in 2007 to $454 million in 2012, according to the researchers.
The companies also found that the percentage of expenditures on SDN-enabled network equipment is expected to rise from 2% this year to 40% in 2018; and that the network virtualization software market will reach $1.2 billion by 2018, up from $10 million this year. On the hardware side, 46% of overall data center network spending will be on SDN-enabled optical, switching and routing hardware by 2018, while 49% will be spent on non-SDN-enabled gear.
The research estimates the growth of the SDN market by focusing on sales opportunities where SDN capabilities are required for a customer to make a purchase decision, the research partners said. The research sought to estimate the amount of network spend that will be directly influenced by SDN.
In contrast, IDC's research tallies deployed boxes, ports and software instances, including SDN overlays and hybrid implementations, as well as pure OpenFlow networks .
The Plexxi/SDNCentral/Lightspeed Venture research was conducted using SDNCentral's proprietary market-sizing models and is based on publicly available data on optical networking, storage area networking, switching, routing, application networking and network security from 2009 to 2013.
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