The global NFV market is projected to grow at close to a CAGR of 33% over the next four years, according to a recent report.
Several factors are driving the growth of NFV, according to the report, including more connected devices via Internet of Things applications and services, as well as the move towards 5G.
Connected homes, cars, healthcare and smart cities are banking on the Internet of Things (IoT) to enable increased data transfers. The report by Technavio said that NFV would connect and manage the various elements of IoT securely.
The eventual commercial deployment of 5G technologies will require VNFs and management software to create agile, on-demand networks, which will also drive the NFV's market growth.
While telecom operators, such as AT&T, Telefónica, Verizon and CenturyLink, are already deploying NFV and SDN, the report said enterprises and ISPs would be adding NFV into their network operations as well.
Chris Haddock, head of marketing at OpenCloud Ltd. , wrote in an email that operators needed to take a measured approach to their NFV deployments to avoid recreating proprietary networks.
"Operators are beginning to realize the benefits of NFV, making significant investments to take advantage of the flexibility, price and performance of virtualized network functions (VNFs)," according to Haddock. "These software-based VNFs can be made to work together, breaking open the fixed and closed nature of traditional hardware-based network appliances.
"However, to truly reap the benefits of the technology, operators need to be smart about how they choose to virtualize the various functions in their networks."
Haddock also wrote that most operators were typically outsourcing NFV to a single equipment provider, but that would once again lead to vendor lock-in "with limited flexibility and opportunity for competitive differentiation," which would water down the benefits of virtualization.
"Instead, operators need to invest in a selection of best-in-class software building blocks, using a number of smaller components, to make best use of the computing resources available to them," Haddock wrote. "Used in this manner, NFV can empower operators to evolve their networks and services at their own pace, ahead of and in response to local competition."
— Mike Robuck, Editor, Telco Transformation