Next Generation Networking Market Size - By Component, By Technology, By Enterprise Size, By Deployment, By End-use, Growth Forecast, 2025 – 2034

Next Generation Networking Market Size

The global next generation networking market was valued at USD 32.5 billion in 2024 and is estimated to register a CAGR of 7.9% between 2025 and 2034. The growing adoption of cloud computing and storage is a significant driver of this market. The total user spending on public cloud services has grown significantly over the years. In 2021, as stated by Statista, total spending stood at USD 412.63 billion, which grew to 478.32 billion in 2022. This spending further increased to USD 561.1 billion in 2023.
 

As more companies shift their operations to cloud, the demand for networking solutions that are flexible, scalable and high performing will grow. With the growing dependence on cloud-based applications and frequent data transfer to and from cloud storage, reliable and secure networks have become necessary. The next generation networking technologies such as Software-Defined Networking (SDN) and Network Function Virtualization (NFV) help users improve their performance across different cloud environments, thus leading to their advantage.
 

TATA Communications in June 2024 launched its Unified/ Single Vendor Hosted Secure Access Service Edge (SASE), a solution that merges SD-WAN and service secure edge capabilities into a single technology. This integration enables businesses to leverage cloud-based solutions effectively while ensuring zero-trust security and exceptional performance.
 

Increasing demand for low latency and real time applications is another factor driving demand for next generation networking market. Industries such as online gaming, augmented and virtual reality, and facilities such as telemedicine and financial trading require low latency and high-speed support. Traditional networks fail to meet these requirements along with faster data processing, thus leading to the demand for next generation networks, which are designed to fulfill these obligations.
 

Next Generation Networking Market Trends

• IoT is of the major trends in the next generation networking industry. With the growing number of IoT and connected devices in both professional and personal aspects, the demand for efficient systems that can handle high volume and traffic is rising. Next generation technologies such as edge computing and network slicing are being adopted that help process data at source, which helps support expanding IoT ecosystem
   
• Increasing preference for hybrid cloud systems is creating demand for hybrid next generation networking solutions, as it can help connect and provide efficient services in both on-premises and public or private cloud set-ups, and results in smooth data transfer across both network types
   
• 5G Americas reported that the total number of 5G connections had reached around 2 billion, with the addition of 185 million new connections in Q1 of 2024. North America held a major share in terms of 5G adoption, with the region accounting for 32% of 5G connections out of the total wireless cellular connections
   
• With this expanding 5G adoption, the telecom providers are adopting next generation networking systems such as 5G radio access networks (RAN), network slicing, and software-defined networking (SDN) that helps provide reliable, fast, and low latency communication. Improvements and availability of IoT and 5G is also promoting adoption of industrial automation, smart cities, and autonomous vehicles, all of which requires high speed and secure connectivity, thus creating demand for next generation networks.
   

Next Generation Networking Market Analysis

Based on component, the market is segmented into hardware, software, and services. In 2024, the hardware segment held a market share of over 40% and is expected to reach USD 25 billion by 2034. 
 

• The hardware segment holds a significant share of the next generation networking market as it plays a key role for enabling high-performance networking. Hardware components such as routers, switches, servers and other specialized devices such as network processors are the basic requirements to ensure smooth functioning of 5G, network function virtualization, and software define networking
   
• The growing demand and adoption of fast and reliable connectivity in various industries including automotive, healthcare, and manufacturing, create a demand for advanced hardware. For example, deployment of 5G services requires high performance hardware system to support the large number of data and low latency, thus creating demand for efficient hardware components
   
• Hardware is also necessary as it supports the software and related services for the efficient functioning of the next generation networking solutions. Increasing investments to develop smart cities and IoT devices is leading to the demand for reliable and efficient hardware systems as they support these modern and connected systems
   
• Ericsson launched routers called Cradlepoint R980 and S400 in September 2024, for supporting and enhancing the connectivity of next generation AI and IoT technologies. These routers are developed to provide users with a secure and reliable Wireless WAN solution. These routers will help meet the advanced connectivity requirements in industries such as smart cities and public safety.

Based on enterprise size, the next generation networking market is segmented as SME and large enterprises. The large enterprises segment dominated in 2024 with a market share of around 71%, due to their need for robust networking solutions to carry out their operations
 

• Large enterprises hold a significant share of this segment as they require low-latency, high bandwidth, and secure connections to support their operations and employee and client interactions. These organizations are also equipped with enough resources that help them invest in such advanced technologies for simplified functioning
   
• These organizations also have their in-house team that can ensure easy deployment, usage, and management of next generation networking technologies efficiently. This also lowers the risk of inappropriate utilization and potential financial losses or functioning issues, thus encouraging them to invest in such systems
   
• Many large enterprises operate from different locations, leading to a demand for reliable and secure network systems to enable seamless communication and workflow among their various branches. To fulfil these requirements, these organizations adopt modern technologies such as SDN, cloud-based networking, and 5G services to support these demands.
   

Based on deployment, the next generation networking market is segmented on-premises, cloud-based, and hybrid. The cloud-based segment led the market in 2024, as it provides cost-effective and flexible solutions, necessary to modern business needs
 

• One of the major factors contributing to the rising preference for cloud platforms is that it offers higher scalability, flexibility, and innovation capabilities. This helps businesses in providing improved services while maintaining their initial and overhead costs
   
• The adoption of IoT among businesses is also gaining traction as it helps automate repetitive tasks, gain real time data insights helping make improved information-backed decisions, and thus improve outputs, services, and customer expectations. The total number of IoT connections, as stated by Statista, increased from 12.11 billion in 2022 to 15.1 billion in 2023
   
• Cloud networks support this growing IoT trend by analyzing large amounts of data in real time. This helps in better functioning of organizations, and thus the growing trend towards IoT is also expected to contribute to the adoption of cloud infrastructure
   
• Next generation technologies such as 5G, AR, AI, and blockchain also require massive data bandwidth and high-performance networking, which is seamlessly provided by cloud-based solutions. As these technologies become more streamlined and accepted, the adoption of cloud platform is expected to grow further.
   

Based on end use, the next generation networking market is divided into telecommunication, healthcare, government, automotive, manufacturing, and others. The telecommunications segment held a major market share in this segment in 2024.
 

• The telecommunication sector is the primary provider of advanced technologies such as 5G, which is transforming the communication segment by providing lower latency and faster speed. To meet the rising consumer demand for these technologies, telecom providers are investing in millimeter wave spectrum, network slicing, and NFV. These technologies help meet the high-speed data requirements of smart cities and autonomous vehicles, leading to demand for next generation networking systems
   
• The telecommunication industry is also adopting SDN (Software-Defined Networking) and NFV (Network Functions Virtualization), which helps providers manage network traffic more effectively and expand network services without investing any higher amounts in hardware. These virtualization services help telecom operators to launch new services and make them accessible to users faster, thus resulting in demand for next generation networking services.

North America dominated the global next generation networking market with a major share of over 34% in 2024 and U.S. led the market in the region and was valued at around USD 5.6 billion in 2024.
 

• U.S. is home to many telecom companies such as AT&T and Verizon, investing heaving in developing and scaling modern technologies. These companies have also expanded their 5G services in the country, which need specialised hardware and software to provide low latency and high speed. The Cellular Telecommunications Industry Association reported that in 2023, 40% of all wireless devices in U.S. is equipped with 5G, indicating a growth of 34% than in 2022
   
• The U.S. government has also supported this growth by introducing favourable policies such as the 5G fund and the National Strategy to Secure 5G, leading to expansion and demand for next generation networks
   
• U.S. holds a significant share in technology and cloud services, due to presence of major technology companies including AWS, Google, and Microsoft in the country. These companies lead the digital transformation, and offers cloud computing, enterprise networking, and edge computing. The demand for AI, AR/VR, and IoT is also growing in the country, which create demand for advanced networking solutions to handle data volume and processing
   

The growth forecast for the next generation networking market in Germany from 2025 to 2034 is highly encouraging.
 

• Germany holds a major share due to its developed telecommunication infrastructure, which is backed by major companies such as Deutsche Telekom, Vodafone Germany, and Telefonica Deutschland. Deutsche Telekom alone accounted for approximately 40.3% of internet providers in the country, followed by Vodafone, holding 27.6% of the market share, as reported by Statista
   
• These companies are also investing actively in expanding their 5G services in the entire country to support the IoT adoption and faster internet services, essential to support the growing autonomous vehicle and industrial automation initiatives in the country
   
• The country also leads the industry automation trends, and plays a key role in Industry 4.0, particularly in automotive and engineering fields. This requires high speed internet connection and low latency support to help scale the growth of automated services. Technologies such as SDN and NFV provide the necessary base to scale these communication and network systems, which creates demand for next generation network systems.
   

China is expected to show remarkable and promising development in the next generation networking market from 2025-2034.
 

• China is one of the major counties that is heavily investing developing and expanding telecommunication services to cater to the network and data requirements of the vast population. 5G remains one of the major trends in the country, with the total 5G subscribers’ numbers reaching 1.002 billion by end of November 2024, as stated by the State Council Information Office
   
• The country is also at the forefront of industrial automation to help scale their production and outputs. The Chinese government and companies are increasingly embracing IoT, AI, and other such technologies, necessary to develop and support the development of next generation networks
   
• The country is also actively focusing and investing in cybersecurity and data privacy, leading to the demand for next generation networking solutions. As the adoption of digital technologies grow, the need for strict cybersecurity policies also increases. Considering the growing trend, Chinese companies are investing in next generation network solutions that not just improves performance but also provides strong security features such as data encryption and firewalls.
   

The next generation networking market in Mexico is expected to experience significant and promising growth from 2025 to 2034.
 

• The demand for next generation networking in Mexico is backed by the growing automotive and electronics industry of the country. The automotive products output in Mexico, as per Statista, grew from USD 157.2 billion in 2022, to USD 163.5 billion in 2023, and USD 165.7 billion in 2024. To meet the growing trend, Mexico is adopting to Industry 4.0, creating a demand for advanced networking solutions that provide improved efficiency at lower costs. The next generation networks help manufacturers build more flexible and efficient networks to meet industry demands
   
• Mexico, being located close to the U.S., also attracts major company investments and thus leads to inflow of latest technologies. Strong trade agreements such as United States-Mexico-Canada Agreement, not only improves the trade relations between the countries, but also results in flow of latest technologies and expertise, such as next generation network solutions.
   

Next Generation Networking Market Share

Top 7 companies leading the next generation networking industry in 2024 were Cisco, Huawei, VMware, ZTE Corporation, Nokia, Juniper Networks, and Ericsson. Together, they held around 33% market share.
 

• Cisco and Huawei are significant players in this market due to their strong geographical presence, wide range of products and services. Cisco, with their decades of experience in networking, technology, and telecom products, have made it a trusted brand and partner in this market
   
• Huawei is one of the major service providers of 5G network infrastructure and related technology. The company has contributed significantly to the expansion of 5G services by supplying 5G base stations and core network equipment. This also makes the company a significant player in this market
   
• VMware is a global player in cloud computing and virtualization services, offering software that help businesses manage, deploy and scale cloud infrastructures efficiently. As the demand for cloud networks grows, the company’s solutions such as virtualization and SDN are playing a key role in supporting next generation networking
   
• ZTE offers a wide range of solutions for the next generation network market such as 5G, IP routing and optical network. The company capabilities to build solutions for both core network and edge infrastructure helps it gain significant position in the market
   
• ZTE Corporation, in October 2024, showcased their AI powered 5G fixed wireless access and mobile broadband solutions at Network X, 2024. Through this the company showcased its actions in technological innovation and high-performance connectivity delivery solutions globally  
   
• Nokia specializes in offering network automation and SDN services, which are necessary for scaling next generation networks. Its cloud-based network automation platforms help companies manage and improve and scale their network and services, thus leading to its preference
   
• Juniper Network offers high performance networking solutions for businesses and service providers. The company specializes in switching, routing, security, and network management systems that support the development of advanced network systems
   

Next Generation Networking Market Companies

Major players operating in the next generation networking industry include:

• A10 Networks
• Adtran
• AT&T
• Cisco
• Ericsson
• Huawei
• Juniper Networks
• Nokia
• VMware
• ZTE

• Companies in the next generation network market are focused on innovation and continuous investment in research and development activities to meet the evolving digital demands. Factors such as network virtualization, cloud computing, IoT, and AI-driven services are creating strong competition among these players
   
• With the growing cyber security issues, companies in this market are investing in data protection features to prevent cyber-attacks and comply with data privacy laws. This trend is leading to a competitive advantage for companies who are already invested in security solutions
   
• Service providers are also investing in customer centric offerings to meet the specific and customized solutions for end users. In sectors such as healthcare, solutions are being developed such that they provide real time data processing in cases such as remote health service provisions. This will help healthcare providers provide better medical services to patients located at different locations.
   

Next Generation Networking Industry News

• In February 2025, Obscure Technologies partnered with Palo Alto Networks to enhance network security services by adopting the next generation firewalls. This collaboration aims to address the limitations of traditional firewall systems for combating cyber threats, and thus providing strong cyber security solutions
   
• In February 2025, Kyocera Corporation announced full scale development of AI-powered 5G virtualized base station. The company will be leveraging its virtualization technologies and telecommunication services to bring the base station functionalities to general purpose servers using NVIDIA GH200 Grace Hopper Superchip. Through this, the company aims to enhance the 5G mobile network, which is gaining traction globally and necessary for digital transformation
   
• In November 2024, Colt Technology Services collaborated with Rivada Space Networks with the aim to develop a next generation connectivity network, by utilizing Rivada’s Outernet. These Outernet services, consists of Earth low orbit satellites. Through this collaboration, the company aims to enhance their digital infrastructure capabilities by providing low-latency and ultra secure connectivity, especially developed for companies with rapid and secure data transfer requirements
   
• In September 2024, Rogers Communications partnered with Comcast for implementing Comcast’s advanced network architecture in Canada. This collaboration was done with the aim to provide next generation internet services, including multi-gigabit speeds and improved reliability to the Canadian population.
   

The next generation networking market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) from 2021 to 2034, for the following segments:

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Market, By Component

• Hardware
  • Routers
  • Switches
  • Firewalls
  • Servers
  • Others 
• Software
  • Network management systems
  • Network security software
  • SDN Controllers
  • Network virtualization
  • Others
• Services
  • Professional services
  • Managed services

Market, By Technology

• SDN
• NFV
• 5G networks
• Edge computing
• Others

Market, By Enterprise size

• SME
• Large enterprises

Market, By Deployment

• On-premises
• Cloud-based
• Hybrid

Market, By End use

• Telecommunication
• Healthcare
• Government
• Automotive
• Manufacturing
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina 
• MEA
  • UAE
  • South Africa
  • Saudi Arabia