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Worldwide Software-Defined Networking Market Expected to Reach $8 Billion by 2018, According to IDC

Software-defined networking (SDN) continues to gain ground within the broader enterprise and cloud service provider markets for datacenter networking. According to a new forecast from International Data Corporation (IDC), the worldwide SDN market for the enterprise and cloud service provider segments will grow from $960 million in 2014 to over $8 billion by 2018, representing a robust compound annual growth rate (CAGR) of 89.4%. This forecast for the SDN ecosystem includes in-use physical network infrastructure, controller and network-virtualization software, SDN network and security services and related applications, and SDN-related professional services.

Software-defined networking is an innovative architectural model that is capable of delivering automated provisioning, network virtualization, and network programmability to datacenter and enterprise networks. SDN has emerged as a key driver for innovation and change in networking as several market and technology factors converge:

  • Growth of cloud applications and services across enterprise and cloud providers
  • Focus on converged infrastructures (compute/storage/network) and on the software-defined datacenter
  • Lessons learned regarding the benefits and best practices of server virtualization have become apparent
  • Increased demand for network flexibility to support mission-critical technologies based on 3rd Platform technologies, particularly cloud, mobility, Big Data, and Internet of Things (IoT) applications

"SDN is taking center stage among innovative approaches to some of the networking challenges brought about by the rise of the 3rd Platform, particularly virtualization and cloud computing," said Rohit Mehra, Vice President, Network Infrastructure at IDC. "With SDN's growing traction in the datacenter for cloud deployments, enterprise IT is beginning to see the value in potentially extending SDN to the WAN and into the campus to meet the demand for more agile approaches to network architecture, provisioning, and operations."

IDC sees significant near-term use case opportunities for SDN in both cloud service provider rollouts and enterprise deployments. Although enterprises are largely still testing the waters to see what benefits will accrue from SDN, IDC sees the enterprise market as a major driver of overall SDN growth over the next several years. "The 2014 through 2016 period will be a significant launch point for SDN in the enterprise, with significant growth opportunities for both enterprise-focused SDN infrastructure and cloud service providers," said Brad Casemore, Research Director, Datacenter Networks.

Among the use cases for SDN are the following:

  • Web scaling for hosting/public cloud providers
  • Private/hybrid cloud deployments
  • Network programmability/customization
  • Security applications

The IDC study, SDN Momentum Builds in Datacenter and Enterprise Networks (IDC #250288), takes a closer look at the rapidly evolving SDN market and its associated ecosystem, while analyzing opportunities and challenges for datacenter and enterprise network managers.

To purchase this study, please contact IDC Sales at 508-988-7988 or [email protected].

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. In 2014, IDC celebrates its 50th anniversary of providing strategic insights to help clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com. Follow IDC on Twitter at @IDC.

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