IDC Study: SDN Market Expected to Grow From $960 Million in 2014 to over $8 Billion by 2018

Software-defined networking (SDN) continues to gain ground within the broader enterprise and cloud hosting service provider markets. According to a new forecast from International Data Corporation (IDC), the worldwide SDN market for the enterprise and cloud hosting service provider segments will grow from $960 million in 2014 to over $8 billion by 2018.

The IDC forecast for the SDN ecosystem represents a robust compound annual growth rate (CAGR) of 89.4%. This global forecast includes in-use physical network infrastructure, controller and network-virtualization software, SDN network and security services and related applications, and SDN-related professional services.

idc-studyIDC sees significant near-term use case opportunities for SDN in both cloud hosting 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.

According to IDC, the use cases for SDN include:

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

“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, IDC’s Datacenter Networks.

Software-defined networking is an innovative architectural model that is capable of delivering automated provisioning, network virtualization, and network programmability to data center and enterprise networks. SDN would have 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 hosting 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

“With SDN’s growing traction in the data center 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,” said Rohit Mehra, Vice President, Network Infrastructure at IDC.

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.