data center

The software defined networking (SDN) market will expand at a 53.9% CAGR through 2020, by which time it will be valued at nearly $12.5 billion annually, according to a new IDC SDN market forecast. IDC’s definition of the SDN market encompasses physical network infrastructure, virtualization/control software, SDN applications, such as network/security, and professional services.

“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,¨Brad Casemore, IDC Director of Research for Datacenter Networking, was quoted in a press release.

¨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.”

Early SDN adopters included ¨hyperscale¨ data centers and cloud service operators, but the technology is also gaining traction in enterprise data centers across a broad range of industries, IDC highlights in ¨SDN Market to Gain Enterprise Headway, Driven by 3rd Platform and Cloud

¨Large enterprises are now realizing the value of SDN in the data center, but ultimately, they will also recognize its applicability across the WAN to branch offices and to the campus network,” commented Rohit Mehra, IDC VP, Network Infrastructure.

SDN Market Forecast
Physical infrastructure, e.g. data center switches, will continue as the largest SDN market segment out through 2020, according to IDC. But the fastest growth rates will be found in SDN software – more specifically the virtualization/control layer and SDN applications. Together they’ll be worth some $5.9 billion.

Sales of SDN virtualiztaion/control layer software will rise at a CAGR of nearly 64% over the period to reach $2.4 billion, IDC’s SDN market forecast predicts. SDN applications, which includes Layer 4-7 network and security services, are expected to increase at a 66% CAGR out into 2020, generating annual 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,¨ Mehra was quoted.

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