Software-defined Networking Market to Be Worth $73.5 Billion by 2031 - Exclusive Report by Meticulous Research®

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May 07, 2024, 10:05 ET

REDDING, Calif., May 7, 2024 /PRNewswire/ -- According to a new market research report titled, 'Software-defined Networking Market by Offering, Model (API SDN, Overlay SDN, Open SDN), Application (Control Flow, Packet Forwarding, Security Flow Open Flow Switch), End User (Data Centers, Enterprises), and Geography—Global Forecast to 2031,' the software-defined networking market is projected to reach $73.5 billion by 2031, at a CAGR of 22.8% from 2024–2031.

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Software-defined Networking (SDN) is an approach to networking that uses software-based controllers or application programming interfaces (APIs) to communicate with underlying hardware infrastructure and direct traffic on a network. It enables a new way of controlling the routing of data packets through a centralized server. SDN offers the potential to deliver application environments as code and minimize the hands-on time needed for managing the network.

SDN is much more flexible than traditional networking and is a step above it. It enables increased control with greater speed and flexibility, customizable network infrastructure, and robust security. It also allows data to move easily between distributed locations, which is critical for cloud applications.

The growth of the software-defined networking market is driven by the proliferation of data centers, the increasing utilization of smart devices in industrial and infrastructure applications, and the growth in network infrastructure automation in Asia-Pacific. However, interoperability issues due to uneven SDN standards restrain the growth of this market.

Furthermore, the increasing deployment of 5G networks and enterprises' growing preference for network slicing are expected to generate growth opportunities for the stakeholders in this market. However, the shortage of skilled networking professionals is a major challenge impacting the growth of the software-defined networking market.

The global software-defined networking market is segmented by offering (software and services), model (open SDN, API SDN, overlay SDN, and hybrid SDN), application (control flow, open flow switch, packet forwarding, security flow, data migration, and other applications), end user (data centers, enterprises, cloud service providers, telecommunication service providers, and other end users). The study also evaluates industry competitors and analyzes the market at geographical levels.

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Based on offering, the software-defined networking market is segmented into software and services. In 2024, the software segment is expected to account for the larger share of 70% of the software-defined networking market. The large market share of this segment can be attributed to the benefits offered by SDN. SDN facilitates dynamic and centralized control of network resources, enabling administrators to adjust network behavior through software rather than manual configuration of individual devices. Additionally, SDN enables the automation of network provisioning, configuration, and management, resulting in faster service deployment, enhanced resource utilization, and reduced human errors.

However, the services segment is projected to register the highest CAGR during the forecast period. This growth can be attributed to the benefits provided by SDN services, particularly in enabling the scaling of network infrastructure to accommodate fluctuating workloads. Such scalability is crucial for businesses experiencing growth or variations in demand. Moreover, SDN centralizes network management, enabling administrators to define and enforce policies across the entire network efficiently.

Based on model, the SDN market is segmented into open SDN, API SDN, overlay SDN, and hybrid SDN. In 2024, the overlay SDN segment is expected to account for the largest share of the global software-defined networking market. Overlay SDN enables the creation of virtual networks over existing physical infrastructure, offering flexibility in network design and deployment. This capability enables swift adjustments to evolving business needs. Moreover, overlay SDN facilitates the creation of isolated virtual networks, which is essential for supporting multiple tenants or applications with different requirements on a shared physical infrastructure. These benefits contribute to the large market share of this segment.

However, the hybrid SDN segment is projected to register the highest CAGR of 24.3% during the forecast period. Hybrid SDN provides a balance between the centralized control and programmability of SDN and the distributed nature of traditional networking. This flexibility is essential for organizations that need to support a variety of workloads, applications, and network architectures. These benefits are expected to increase the adoption of hybrid SDN and drive the growth of this segment during the forecast period.

Based on application, the software-defined networking market is segmented into control flow, open flow switch, packet forwarding, security flow, data migration, and other applications. In 2024, the control flow segment is expected to account for the largest share of 31% of the software-defined networking market. SDN enhances network resource utilization and cost efficiency in control flow applications. SDN facilitates the implementation of more granular security policies, thereby bolstering overall network security. These advantages significantly contribute to the large market share of this segment.

However, the security flow segment is projected to register the highest CAGR during the forecast period. SDN enables the rapid deployment of security policies and updates. Additionally, SDN enables the automation of security responses, leading to reduced time and effort needed to mitigate threats. These advantages are expected to drive the growth of this segment during the forecast period.

Based on end user, the global software-defined networking market is segmented into data centers, enterprises, cloud service providers, telecommunication service providers, and other end users. In 2024, the enterprises segment is expected to account for the largest share of 41% of the software-defined networking market. SDN plays a crucial role in automating network management tasks, thereby reducing the need for manual configuration efforts. Moreover, SDN simplifies the process of scaling network infrastructure to meet evolving business requirements. These advantages contribute to the segment's large market share.

However, the telecommunication service providers segment is projected to register the highest CAGR during the forecast period. The growth of this segment can be attributed to the benefits provided by SDN, which offers a new level of flexibility, agility, and efficiency. These advantages enable telecommunication service providers to effectively address the constantly increasing demands of their customers.

Based on geography, the software-defined networking market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2024, North America is expected to account for the largest share of 40% of the software-defined networking market. The North America SDN market is estimated to be worth USD 7.0 Billion in 2024. North America's significant market share can be attributed to factors such as the presence of a larger and well-established sales force specializing in network automation solutions, the increasing initiatives by service providers to implement network automation and the growing demand for data center and IT infrastructure automation.

However, the Asia-Pacific SDN market is projected to record the highest CAGR of 25% during the forecast period. The growth of this regional market is attributed to the increasing deployment of SDN by enterprises in the region, the rising demand for a broad range of value-added network services, the need for more agile and flexible networks, and the growing demand for network automation.

The key players operating in the global software-defined networking market are Cisco Systems, Inc. (U.S.), Broadcom Inc. (U.S.), Huawei Technologies Co., Ltd. (China), Juniper Networks, Inc. (U.S.), Telefonaktiebolaget LM Ericsson (Sweden), Ciena Corporation (U.S.), Hewlett Packard Enterprise Company (U.S.), Nokia Corporation (Finland), Oracle Corporation (U.S.), NEC Corporation (Japan), Dell Technologies Inc. (U.S.), IBM Corporation (U.S.), Pica8 Software Inc. (U.S.), Riverbed Technology LLC (U.S.), and flexiWAN Ltd. (Israel).

Prominent companies such as Cisco Systems, Inc. (U.S.), Broadcom Inc. (U.S.), Huawei Technologies Co., Ltd. (China), Juniper Networks, Inc. (U.S.), and Hewlett Packard Enterprise Company (U.S.) are the industry leaders with relatively high market shares. These market players have strong brand recognition and established product offerings with a strong strategic focus on business expansion. These players focus strongly on research and development activities and are aligned to innovate their product portfolio in line with the industry trends for the coming years.

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Scope of the Report:

Software-defined Networking Market Assessment—by Offering

Software
Services

Software-defined Networking Market Assessment—by Model

Open SDN
API SDN
Overlay SDN
Hybrid SDN

Software-defined Networking Market Assessment—by Application

Control Flow
Open Flow Switch
Packet Forwarding
Security Flow
Data Migration
Other Applications

Software-defined Networking Market Assessment—by End User

Data Centers
Enterprises
Cloud Service Providers
Telecommunication Service Providers
Other End Users

Software-defined Networking Market Assessment—by Geography

North America
- U.S.
- Canada
Asia-Pacific
- China
- Japan
- India
- South Korea
- Thailand
- Indonesia
- Australia & New Zealand
- Taiwan
- Rest of Asia-Pacific
Europe
- U.K.
- Germany
- Italy
- France
- Spain
- Rest of Europe
Latin America
Middle East & Africa
- Saudi Arabia
- UAE
- Israel
- Rest of the Middle East & Africa

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