NFV will account for the bulk of the virtualisation market, with vendors set to make money from applications, rather than orchestration and control, a new report has claimed.
The latest figures from Infonetics has revealed the market will be worth $11 (€8.8) billion by 2018. Michael Howard, Co-Founder and Principal Analyst for Carrier Networks, said: "To better understand spending in this emerging market, we classify SDN and NFV hardware and software in three distinct categories. First, revenue from brand new SDN and NFV software, which we expect to make up 20% of the total SDN and NFV market in 2018.
"Second, revenue that comes from products that companies will buy instead of buying something else-what we refer to as 'displaced' revenue, including NFV infrastructure (NFVI) hardware (servers, storage, switches) purchased instead of network hardware (routers, DPI, firewalls, etc.). This segment will make up about 12% of the market in 2018.
"And third, revenue that comes from newly identified segments of existing markets: mostly the virtualized network functions (VNFs), and also ports on routers, switches, and optical gear that have become SDN capable. This last segment makes up the largest slice of the SDN and NFV pie, 68% in 2018."
The report found that virtualised network functions such as policy and charging rules, deep packet inspection and evolved packet core will account for 90 percent of the NFV software market. By 2018, three quarters of total SDN and NFV sales will come from software.