Global 5G Network Function Virtualization Market Size (2024 - 2030)

The Global 5G Network Function Virtualization Market was valued at USD 28.41 Billion in 2023 and is projected to reach a market size of USD 154.76 Billion by the end of 2030. Over the forecast period of 2024-2030, the market is projected to grow at a CAGR of 27.4%.

INDUSTRY OVERVIEW

Designing, implementing, and managing networking services is referred to as 5G Network Function Virtualization (NFV). NFV allows users to execute software on virtual machines while performing a variety of networking tasks on a hardware basis. Modern NVF systems may be installed on more hardware than the routers and firewalling devices that were once commonplace. It is frequently used in conjunction with several other services, including firewalls, caching, network address translation (NAT), and domain name service (DNS). An element manager, virtualized infrastructure manager, orchestrator, and operation support system make up the 5G NFV architecture.

One of the main elements fostering an optimistic view of the industry is significant expansion in the banking, financial services and insurance (BFSI), healthcare, retail, manufacturing, and information technology (IT) sectors. Managing the increasing network traffic and data complexity has raised the need for sophisticated network management and NFV solutions. The industry is also being driven by the increased deployment of virtual appliances. They often base their operations on a variety of networking functions, including traffic forwarding, monitoring, security, caching, intrusion detection systems, and domain name service. Another growth-promoting component is NFV, which provides optimal network scalability and agility to control the whole network and enhance its overall performance.For more flexibility, it may also be connected with private cloud computing and the Internet of Things (IoT). Additional factors that are anticipated to fuel the market's growth include the rising need for server virtualization and data centre consolidation, as well as rising investments in 5G network technologies.

COVID-19 IMPACT ON THE5G Network Function Virtualization Market

Numerous nations have suffered as a result of the COVID-19 epidemic. The IT and telecommunications sectors, among others, are being severely negatively impacted by countermeasures including blockades, social exclusion, and quarantine to combat COVID-19. Corporate VPN (Virtual Private Network) servers are now essential to businesses and educational institutions since some workers work from home and some students take online courses. 850 million students are presently learning and attending classes from home, according to UNESCO. The abrupt migration to remote work by hundreds of millions of people has a significant impact on how they use their communications networks. Since most people in Europe are confined to their houses, network traffic has increased by around 50%.Early in 2020, in China, one of the world's top producers and consumers of end products including smartphones, PCs, and tablets, the COVID-19 outbreaks began to affect the NFV industry. For several months, China's manufacturing facilities were shut down, which had a negative influence on the supply chain, the ability to import and export end devices to and from China's restricted regions, as well as the production, sales, and operations of the sector. A multinational organisation called 3GPP which is working on 5G technology declared in March 2020 that COVID-19 will push out the decision on 5G standards by three months. NFV device commercial development and 5G deployment are being slowed down by delayed releases.The worldwide network functions virtualization market and revenues are anticipated to be impacted in 2020 and 2021 by supply chain disruptions and delays in the introduction of 5G specifications.However, several businesses are doing a lot of effort to restart the NFV sector. Local governments have also implemented various countermeasures to COVID-19's unfavourable impacts. The NFV business is thus anticipated to gradually retrace its previous course after 2022.

MARKET DRIVERS: 

5G Network Function Virtualization helps companies cut costs and increase agility thus boosting market growth

Carriers must provide greater bandwidth at a lower cost. High bandwidth needs or on-demand services, however, were not included in typical carrier networks. In addition, attempting to enhance already-existing hardware-based networks is expensive, difficult, and unsuccessful. As a result, carrier revenue is now expanding more slowly than networking expenses. Furthermore, this is hardly a long-term business plan. 5G Network services virtualization solutions aim to help carriers move away from proprietary network hardware, which significantly lowers costs and increases service agility. They do this by isolating network software from hardware.

More initiatives and efforts are being made by market players which in turn is driving market growth

The advantages and ideas of NFV are simple, but putting them into reality becomes more challenging. This is because, to fully benefit from NFV, a certain level of engagement and cooperation between various network solution providers and network operators is required. Industry organizations can be helpful in these circumstances. The world's leading network operators are quickly forming an Industry Specification Group, or ISG, for NFV. The efforts of these organizations to define the NFV framework have garnered a lot of attention, but they are only one of many components in this quickly developing business area.

MARKET RESTRAINTS:

Scalability and security risks could slow market growth

The main worry that many individuals have concerning virtualization is what would happen to their jobs if their assets are unavailable. If a company is unable to access its data for a lengthy period, it will be difficult for it to compete in its industry. Additionally, virtualization does not provide customers control over their capacity to sustain connectivity because availability is maintained by external providers. Although rapid business or prospect expansion is made feasible by virtualization, users might not be able to do it as rapidly as they think. Growth causes slowness in a virtualized network since many entities are using the same resources.

5G NETWORK FUNCTION VIRTUALIZATION MARKET REPORT COVERAGE:

This research report on the 5G Network Function Virtualization Markethasbeen segmented and sub-segmented based on Component,Organization Size, Application, End-User and By Region.

5G Network Function Virtualization Market– BY COMPONENT

• Solutions
• Services

Based on the component, the 5G network function virtualization market is segmented into, Solutions and Services. With a significant revenue share of 74.1% in 2021, the solution category is anticipated to maintain its dominance during the projection period. Its expansion can be ascribed to the rising use of automation and virtualization technologies. The need for mobility services is predicted to increase, and businesses' importance in lowering operational costs using 5G NFV is likely to expand. The solution consists of orchestration and automation as well as other elements like virtual infrastructure managers, SDN controllers, NFV orchestrators, and WAN settings. Through virtualized network capabilities (VNF), scalability, self-healing, and resource lifecycle management of network services, orchestration's main goal are to automate and improve the production of network services.It is not necessary to use a cross-domain network orchestra for VNF to connect with the service orchestrator. Orchestration and automation are commonly used due to their simplicity and significance, especially when there is no vendor lock-in and the solution is tailored and promoted.

5G Network Function Virtualization Market- BY ORGANISATION SIZE

• Small & Medium Enterprises
• Large enterprises

Based on theorganization size, the 5G network function virtualization market is segmented intoSmall & Medium Enterprises and Large enterprises. With over 50% of the market's total revenue share in 2021, the big businesses segment was in the lead and is anticipated to develop rapidly during the forecast period. The category is anticipated to increase as network operations, virtualization tools, and services become more widely used by large businesses. The need for network functions, virtualization solutions, and services is also being driven by major organisations since they are early adopters of cutting-edge technologies like virtualization, orchestration, and automation.To manage their resources and boost productivity, large businesses need a solid network infrastructure. Thus, NFV helps to cut device prices and power consumption by combining devices and utilizing the economies of scale of the large company.

5G Network Function Virtualization Market- BY APPLICATION

• Virtual Appliance
• Core Network

Based on the application, the 5G network function virtualization market is segmented into Virtual Appliance and Core Network. With 56.9% of the market's total revenue share in 2021, the virtual appliance category was in the lead and is anticipated to develop rapidly over the coming years. Virtual appliances are generally used for a range of network functions, including domain name services, traffic forwarding, security, monitoring, and caching. The Virtual Customer Home Appliance is mostly used to send these processes over the edge. Because this has made it possible for businesses to simplify their networks, the market is anticipated to grow strongly over the next years.

In the worldwide market, the core network category is anticipated to expand at a CAGR of 24.9% from 2023 - 2030. The expansion of this market is being driven by the complexity of complex networks and the rising need for network virtualization and automation. Network functions including traffic forwarding, security monitoring, domain name services, and intrusion detection systems are typically included in the core network.

The virtually created packet core, which is used to send these processes over the edge, has greatly influenced the organization's ability to reduce network complexity. Few NFV solution vendors are aggressively investing in the R&D of 5G NFV for core networks due to the advantages of the core network sector, which will improve and make it more accessible to SMEs. During the projection period, this is anticipated to assist the segment's strong expansion.

5G Network Function Virtualization Market- BY END-USER

• Service Providers
• Data Centers
• Enterprises
  • Banking, Financial Services, and Insurance (BFSI)
  • Healthcare
  • Retail
  • Manufacturing
  • Government and Defense
  • Education
  • IT-enabled Services
  • Others

Based on the application, the 5G network function virtualization market is segmented into Service Providers, Data Centers and Enterprises. With over 40% revenue share in 2021, the service provider category was the greatest revenue contributor. Over the projection period, this segment is anticipated to rise significantly. The network infrastructure of the service providers is under a lot of strain from growing data volume and variety, connection for IoT / M2M devices, and increased smartphone penetration leading to higher data consumption per user. As a result, the service providers may easily increase capacity to match the rising demand.However, the designs of modern networks are made up of pricey hardware-based devices with closely integrated software. Because of this, the network becomes less scalable and more costly in addition to being robust and fragmented. As a result, the NFV changes the network architecture to give apps real-time network visibility. Applications may program the network to suit their demands, assisting in the development of an adaptable infrastructure.During the forecast period of 2022–2030, the enterprise sector is anticipated to develop at a CAGR of 24.9% in the worldwide network functions virtualization market. Because NFV offers substantial advantages including centralizedadministration for network efficiency, IT agility, and quick and dependable application services for network adaption, enterprise clients are prepared to adopt it.

5G Network Function Virtualization Market- BY REGION

• North America
• Europe
• The Asia Pacific
• Latin America
• The Middle East
• Africa

By region, the 5G network function virtualization market is grouped into North America, Europe, Asia Pacific, Latin America, The Middle East and Africa. In 2021, North America had the highest revenue share, which was 31.2%. The usage of technologies like Software Defined Everything (SDx), cloud computing, and IoT is increasing, supporting the expansion. The fast expansion of several sectors has been facilitated by the high level of industrialization in nations like the United States and Canada. The 5G NFV sector is growing because of the favourable norms and laws in North American nations.In North America, several companies offer5G NFV infrastructure, including Juniper Networks, Cisco, IBM Corporation, and Extreme Networks. It also presents new chances for NFV infrastructure adoption and is a viable investment sector. With 5G NFV, the controller is left in charge of the whole network. Deployment would thus necessitate severalorganisational, functional, and cultural adjustments.

The Asia Pacific is anticipated to increase quickly throughout the forecasted timeframe. The adoption of technologies like Software Defined Everything (SDx), cloud computing, and the Internet of Things is the main factor driving the rise. Moreover, the area includes nations like China, India, and Japan, which contributes to the increase of the subscriber base, favourable governmental laws, and the need for greater data storage and security in the region, all of which are anticipated to fuel the market's progress.

5G Network Function Virtualization Market- BY COMPANIES

Some of the major players operating in the 5G network function virtualization market include:

1. CISCO SYSTEMS, INC.
2. ERICSSON
3. HUAWEI TECHNOLOGIES CO., LTD.
4. VMWARE, INC.
5. NOKIA CORPORATION,
6. HEWLETT PACKARD ENTERPRISE COMPANY
7. DELL EMC
8. JUNIPER NETWORKS, INC.
9. ZTE CORPORATION
10. FUJITSU LIMITED
11. COMBA TELECOM SYSTEMS
12. AFFIRMED NETWORKS
13. NETSCOUT SYSTEMS, INC.
14. WIND RIVER SYSTEMS, INC.
15. ECI TELECOM
16.  MAVENIR
17.  CIENA CORPORATION

NOTABLE HAPPENING IN THE 5G Network Function Virtualization Market

• ACQUISITION-In April 2022, Intel purchased assets from Granulate Cloud Solutions, a renowned supplier of expert services for cloud-based CRM software. Through this purchase, the firm hoped to grow its portfolio and help clients in decreasing the usage of CPU and app latencies.
• COLLABORATION- In July 2021, Intel partnered with the Indian telecom company Bharti Airtel. Following their partnership, the businesses hoped to hasten the advancement of both radio access network technology and 5G and 4G virtualized radio access networks.
• PRODUCT LAUNCH- Hewlett Packard introduced a new 5G software solution to its current 5G range in June 2021. The new solution includes the capacity to coordinate network operations, infrastructure operations, and service operations. Additionally, the new 5G software solution automatically recognizes and fixes problems to ensure service continuity.
• ACQUISITION- Hewlett Packard finished acquiring Scytale, a pioneer in InfoSec compliance automation, in February 2020. Through the merger of skills, the corporation hoped to hasten its progress toward realizing its objectives.