Network Function Virtualization Market Size & Share 2018 - 2024
Market Size by Component (Hardware [NFV Servers, Storage, Switches], Software [NFV Management and Orchestration {NFV-MANO}, Virtual Network Function {VNF} Software], Service [Training & Consulting, Integration & Maintenance, Managed Service]), by Application (IT & Telecom, BFSI, Healthcare, Retail & Consumer Goods, Government, Manufacturing), Industry Analysis Report, Regional Outlook, Growth Potential, & Forecast.
Report ID: GMI2768
|
Published Date: July 2018
|
Report Format: PDF
Download Free PDF
Authors:
Suraj Gujar, Ankita Chavan
Network Function Virtualization Market Size
NFV Market size exceeded USD 5 billion in 2017, growing at a CAGR of over 42% from 2018 to 2024.
The NFV market is expected to witness a sharp growth as network virtualization technologies enable enterprises to eliminate the costs associated with the procurement and maintenance of hardware equipment. The technologies help to deliver network services in a more scalable way compared to the traditional networking approach. The enterprises are rapidly embracing network virtualization solutions as they promote faster server provisioning and quick deployment of network services. The SME are projected to witness a heavy usage of virtualization solutions as they enable consolidation of server & applications and improve disaster recovery. By deploying these solutions, they can also handle multiple workloads with maximum uptime and improved performance.
Rapid investments for the commercialization of 5G networks will also drive the demand for NFV solutions. The implementation of virtualization technology will help to enhance 5G network’s functional and architectural viability including increased agility and reduced capital expenditure.
Network Function Virtualization Market Analysis
The hardware network function virtualization (NFV) market is expected to witness a growth rate of over 35% from 2017 to 2024 due to the heavy usage of hardware equipment such as switches, storage devices, and servers. To support the diverse networking demands of enterprises, they need high-performance virtual switches and routers, which play a key role in IT architecture and enable robust & flexible NFV infrastructure. The training & consulting service segment will exhibit a growth rate of above 50% as these services assist customers in analyzing gaps and assessing operational & infrastructural readiness. The increasing inclination toward virtualized networks will fuel the need for training & consulting service providers, helping enterprises in effective planning for NFV-based deployments.
The BFSI sector will hold a market share of above 15% by 2025 as banking and financial institutions are rapidly transforming their traditional IT infrastructure to more robust and flexible network infrastructure. These institutions are highly dependent on IT networks to deliver services including online banking, mobile banking, and core banking services. This increases the demand for network virtualization and cloud computing platforms to improve network performance, scalability, and deliver faster network services. The investment in cloud-based virtualization solutions will enable BFSI institutions to scale up the network with minimal effort, while retaining the control of every asset.
The LAMEA NFV market is estimated to witness a growth rate of over 45% due to the growing popularity of technologies such as cloud computing and network virtualization. The rising number of data centers in countries including Mexico, Brazil, and GCC increased the uptake of server virtualization solutions to run heavy workloads and applications in the cloud. The rising investments for the development of 5G infrastructure will also fuel market growth. In this region, countries including Mexico, Saudi Arabia, Dubai, and Kuwait are exploring 5G technology and undertaking live trials of 5G on speed, equipment, and latency. Therefore, telecom operators in the region are preparing to switch to virtualization technologies and SDN-based solutions for flexible and scalable network management.
Network Function Virtualization Market Share
Companies operating in the NFV market are adopting product development strategy to meet the needs of various customers and to target untapped markets. For instance, in May 2017, AT&T added new network connectivity options and new security applications to its AT&T FlexWare NFV solution. With this release, the solution got enabled with connectivity options including Ethernet, VPN, and dedicated internet as well as broadband. These options helped AT&T FlexWare to integrate virtually with any network. In July 2016, AT&T and Amdocs collaborated to provide open software solutions to accelerate NFV. Under this partnership, Amdocs became a system integrator for companies using AT&T’s open source ECOMP platform to enable software-centric network capabilities.
Some of the key players operating in the network function virtualization (NFV) market are
Industry Background
As new networking technologies are gaining traction, enterprises struggle to remain agile. The siloed network architecture is not capable to meet new networking demands such as low latency, high scalability, and security. Enterprises are embracing network virtualization technologies, which integrate hardware & software network resources, minimizing operational costs. The network virtualization technology is expected to gain more acceptance with the proliferation of cloud computing and Network as a Service (NaaS) business model.
Research methodology, data sources & validation process
This report draws on a structured research process built around direct industry conversations, proprietary modelling, and rigorous cross-validation and not just desk research.
Our 6-step research process
1. Research design & analyst oversight
At GMI, our research methodology is built on a foundation of human expertise, rigorous validation, and complete transparency. Every insight, trend analysis, and forecast in our reports is developed by experienced analysts who understand the nuances of your market.
Our approach integrates extensive primary research through direct engagement with industry participants and experts, complemented by comprehensive secondary research from verified global sources. We apply quantified impact analysis to deliver dependable forecasts, while maintaining complete traceability from original data sources to final insights.
2. Primary research
Primary research forms the backbone of our methodology, contributing nearly 80% to overall insights. It involves direct engagement with industry participants to ensure accuracy and depth in analysis. Our structured interview program covers regional and global markets, with inputs from C-suite executives, directors, and subject matter experts. These interactions provide strategic, operational, and technical perspectives, enabling well-rounded insights and reliable market forecasts.
3. Data mining & market analysis
Data mining is a key part of our research process, contributing nearly 20% to the overall methodology. It involves analysing market structure, identifying industry trends, and assessing macroeconomic factors through revenue share analysis of major players. Relevant data is collected from both paid and unpaid sources to build a reliable database. This information is then integrated to support primary research and market sizing, with validation from key stakeholders such as distributors, manufacturers, and associations.
4. Market sizing
Our market sizing is built on a bottom-up approach, starting with company revenue data gathered directly through primary interviews, alongside production volume figures from manufacturers and installation or deployment statistics. These inputs are then pieced together across regional markets to arrive at a global estimate that stays grounded in actual industry activity.
5. Forecast model & key assumptions
Every forecast includes explicit documentation of:
✓ Key growth drivers and their assumed impact
✓ Restraining factors and mitigation scenarios
✓ Regulatory assumptions and policy change risk
✓ Technology adoption curve parameter
✓ Macroeconomic assumptions (GDP growth, inflation, currency)
✓ Competitive dynamics and market entry/exit expectations
6. Validation & quality assurance
The final stages involve human validation, where domain experts manually review filtered data to identify nuances and contextual errors that automated systems might miss. This expert review adds a critical layer of quality assurance, ensuring data aligns with research objectives and domain-specific standards.
Our triple-layer validation process ensures maximum data reliability:
✓ Statistical Validation
✓ Expert Validation
✓ Market Reality Check
Trust & credibility
Verified data sources
Trade publications
Security & defense sector journals and trade press
Industry databases
Proprietary and third-party market databases
Regulatory filings
Government procurement records and policy documents
Academic research
University studies and specialist institution reports
Company reports
Annual reports, investor presentations, and filings
Expert interviews
C-suite, procurement leads, and technical specialists
GMI archive
13,000+ published studies across 30+ industry verticals
Trade data
Import/export volumes, HS codes, and customs records
Parameters studied & evaluated
Every data point in this report is validated through primary interviews, true bottom-up modelling, and rigorous cross-checks. Read about our research process →