Carrier VNF/CNF and NFVI markets to grow to more than US$29 Billion in 2025
Worldwide revenue for telecommunications network functions virtualisation (NFV) software, including virtual network functions (VNFs), network functions virtualisation infrastructure (NFVI), and cloud-native network functions (CNFs), will grow from a combined US$7.5 billion in 2020 to just over US$29 billion in 2025, representing a compound annual growth rate (CAGR) of 30.9 per cent over the 2020-2025 forecast period.
Despite the sustained headwinds from COVID-19 in 2020, communications service providers (SPs) continued to deploy VNFs as an adjunct to legacy physical network functions.
Additionally, the broader industry witnessed early instances of CNFs deployed in containers, primarily tied to the standalone 5G core as part of mobile network upgrades, giving rise to telco cloud infrastructure.
However, IDC does not expect material uptake for CNFs across comms SPs (wireless and wireline) until the latter part of the forecast.
While the VNF/CNF and NFVI markets have generally underperformed against expectations thus far, we expect 5G network rollouts to positively impact uptake, particularly across the latter portion of the forecast.
Additionally, virtualisation is incrementally seeing uptake across the core transport network, mobile backhaul, access network (cable and PON) and virtual CPE markets, particularly as multi-access edge computing (MEC) initiatives take hold, said Ajeet Das, research director, Carrier Network Infrastructure research at IDC.
“Communications SPs globally continue to gradually embrace network virtualisation technologies driven by the lower cost of ownership and elastic scaling of the network,” he noted. “Cloud-native network functions are now slowly being deployed alongside virtual network functions across cloud-based digital infrastructure so that the customer-centric services can be scaled, updated, and orchestrated easily, not only at the core but also at the edge of the network.”
