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SDN Market Will Reach $3.52 Billion, Report Says

Transparency Market Research says the industry will be driven by the need for greater programability and efficiency in networks.

Another study is out showing that the software-defined networking space will be a boom market in the coming years.

According to the study by Transparency Market Research released Aug. 21, the worldwide software-defined network (SDN) market will hit $3.52 billion by 2018, growing at a rate of 61.5 percent between 2012 and 2018.

The numbers are similar to what other market research firms are seeing. IDC analysts in December 2012 said they expect global SDN revenues to grow from $360 million in 2013 to $3.7 billion by 2016. Meanwhile, in a report earlier this year, officials with SDN startup Plexxi, Website SDNCentral and venture capital firm Venture Partners said they expect the SDN market to grow significantly faster, to $35 billion by 2018.

Whatever the numbers, most reports agree that SDN—which promises greater programmability and scalability in networks by decoupling the network intelligence from the underlying physical infrastructure—will grow rapidly over the next several years as enterprises try to deal with the rapid changes in the data center driven by such trends as cloud computing, mobility, big data and bring-your-own-device (BYOD).

"Nowadays, many organizations are storing, computing, and networking through cloud-based infrastructure," the Transparency report read. "They are doing this for more agility, flexibility, manageability and programmability in their network infrastructure. The growing adoption of BYOD (Bring Your Own Device) policy within an organization serves as an opportunity for this market."

Of the three types of end users, enterprises—driven by the need for greater agility, cost efficiency and flexibility in their networks—accounted for more than 35 percent of the SDN market in 2012. However, cloud service providers will prove to be the fastest-growing adopters over the next few years, because SDN will help them reduce their operating and capital costs and deliver new services, which will drive up revenues, according to the report.

Cloud provisioning and orchestration will continue to be the fastest-growing part of the SDN space, with SDN switching coming in as the second-largest revenue driver in 2012. "SDN switching is the first layer of SDN network infrastructure, and is growing due to the increasing demand from new entrants who want to set up SDN technology in their organization," the report stated.

North America is the largest consumer of SDN technology, while the Asia-Pacific will be the fastest-growing region over the next five years, thanks to the broad adoption of BYOD policies in China, India and Australia.

The report also noted the large number of vendors in what the authors said is an industry "fragmented in nature." A partial listing not only mentioned such established networking players as Cisco Systems, Juniper Networks, IBM and Hewlett-Packard, but also startups like Big Switch Networks and larger companies like Intel, VMware and Google, who are looking to grow their influence in the SDN space.