According to the latest report published by Allied Market Research, the global software defined networking market garnered $9.99 billion in 2019, and is projected to generate $72.63 billion by 2027, witnessing a CAGR of 28.2% from 2020 to 2027.
The rising adoption of cloud computing along with increasing investments in software defined networking function virtualization to reduce capital expenditure and operating expenses are the major factors driving growth. Furthermore, the surge in need for mobility services and increases in bandwidth usage due to COVID-19 are also feeding market growth.
Hurdles to growth include legacy network equipment issues and security risks due to the centralized nature of the data plane. However, an increase in the implementation of IoT applications and intelligent edge, as well as the convergence of software-defined networking with emerging 5G networks are anticipated to bring new opportunities in the near future.
A huge shift toward cloud computing by various organizations during the COVID-19 pandemic has significantly increased the implementation of software defined networking systems among cloud service providers. In addition, investments in network function virtualization and software defined networking have considerably increased with rising internet traffic stemming during the pandemic.
Based on components, the solution segment contributed to the largest market share in 2019, accounting for more than three-fifths of the global software defined networking market, and is projected to maintain its lead status during the forecast period. This is attributed to increase in adoption of software-defined networking by enterprises and communication service providers to significantly accelerate the time for delivering new applications and services. However, the services segment is estimated to manifest the highest CAGR of 30.90% from 2020 to 2027, mainly driven by the growth in demand by enterprises to develop network strategies.