Software Defined Networking Market Size, Share & Trends Analysis Report By Component, By Type (Open SDN, SDN via API, SDN Via Overlay, Hybrid SDN), By End Use, By Region, And Segment Forecasts, 2024 - 2030

Report Overview

The global software defined networking market was valued at USD 34.29 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 17.9% from 2024 to 2030. Increasing demand for simplified network management solutions, SMEs' focus on cost reductions and process automation, and changing business demands in the information and technology industry are some of the key growth-driving factors for this market.

Over the last decade, multiple businesses linked to the information and technology sector and advanced computing technology have experienced enormous transitions. The emergence of complex network infrastructures has become common in numerous industries that rely highly on automation and computing technology for routine business operations. Enhanced centralized network control and simplified network management have attained significance in sectors. To improve network efficiency, control traffic, and achieve improved agility, flexibility, cost-efficiency, and visibility, various businesses in different industries are seeking suitable software-defined networking solutions and services.

A large number of companies from a variety of industries emphasize establishing a notable digital footprint to support their business strategies related to growth and customer engagement. The need for effective control and communication between networks, software, and underlying hardware infrastructure has increased. The rapid digital transformation of businesses and simultaneous growth in cyber-attacks and potential cyber threats have also contributed to the development of this market in recent years.

The emerging and growing adoption of advanced technologies such as artificial intelligence, the Internet of Things, machine learning, and system automation, coupled with the increasing penetration and availability of 5G network services, is expected to generate an upsurge in demand for the software-defined networking market during the forecast period. Telecommunication industry participants are investing large amounts in enhancing the further deployments of effective networking solutions to develop and secure a strong network infrastructure.

For instance, in July 2024, Chunghwa Telecom Co., Ltd., one of the prominent companies operating in the telecom industry, and EXATEL Telecom, a key organization in the telecom and technology market, jointly announced the accomplishment of 5G network and SDN solution validation. The newly formed solution integrates EXATEL's SDN system expertise with Chunghwa's network solutions and combines this with Askey's 5G deployment and Taiwan's network equipment. This marked the first-ever deployment of SDN solutions by EXATEL in Asia.

Component Insights & Trends

The solutions segment dominated the SDN market and accounted for a revenue share of 70.3% in 2023. Unlike generalized services, SDN solutions provide customized and targeted approaches for particular business requirements. Companies are focusing on improving network performances and reliability to align business functions with modern consumer demands and industry dynamics. SDN solutions provided by prominent market participants enable businesses to ensure enhanced network security, ease of network control, smooth cloud integrations, accommodation of growing demand in traffic volumes, and distributed application control. Organizations with the necessary funds have preferred adopting customized SDN solutions for complete control and efficient network management.

The services segment is expected to experience the fastest CAGR during the forecast period. Growth of this segment is primarily driven by factors such as the growing adoption of SDN technology, the increasing significance of centralized control over resources and networks, the rising need for management and direction of traffic volume, and growing network threats encouraging businesses and organizations to adopt enhanced security measures. The SDN services include consulting, training & maintenance, integration & deployment, and managed services.

Type Insights &Trends

The open SDN segment held the largest revenue share of the global industry in 2023. User enterprises prefer the openness of protocols, development processes, and standards as it allows software use, redistribution, and modification while eliminating limitations related to other proprietary solutions. The flexibility offered by open SDN solutions, a collaborative approach enabling contributions by co-developers, versatility, innovation, and cost effectivity are expected to drive demand for open SDN solutions during the forecast period. Open SDNs ensure quick identification of potential and existing security threats while allowing rapid response and address by many contributors.

The hybrid SDN segment will experience the fastest CAGR from 2024 to 2030. Growing demand for hybrid SDN is attributed to the capacity to ensure seamless integration of existing legacy systems without an entire overhaul of the technology, assistance in maintaining operational continuity, flexibility, compatibility with scaled network resources, cost efficiency, and ability to support advanced technologies such as IoT, cloud computing, and others. The hybrid SDN is increasingly preferred by businesses that choose to continue using legacy systems owing to dependency on critical business functions, extraordinary risks related to data migration activities, and extremely higher costs of replacement of systems and integrations that follow.

End Use Insights & Trends

Based on end use, telecommunication services providers dominated the global industry for software-defined networking in 2023. The growth of this segment is primarily driven by the factors such as increasing demand for centralized network control, growing adoption of hybrid SDN solutions by multiple companies, emergence of 5G, unceasing growth in demand for enhanced network availability and continuous focus of telecom industry participants on network expansions and improved security provisions to address rise in competition.

The cloud service providers segment is expected to experience the fastest CAGR during the forecast period. Growth of this segment is attributed to factor such as increasing adoption of cloud services by numerous businesses in various industries, growing need for scalability and flexibility to cater to changing workloads and customer demands, simplification of network management ensured by SDN, and more.

Regional Insights

North America software defined networking market dominated the global industry and accounted for the revenue share of 36.0% in 2023. This market is mainly driven by the presence of large enterprises operating in the technology and innovation industry, increasing demand for cloud computing technology solutions in the region, rising digital transformation of businesses from various markets, growing 5G networks and unceasing cyber threats developing a necessity of enhanced security solutions of companies in North America. Ease of availability and accessibility, cost effectiveness and growing adoption by the telecom industry is expected to generate upsurge in demand for this market in approaching years.

U.S. Software Defined Networking (SDN) Market Trends

The U.S. dominated the regional SDN market in 2023 and is expected to maintain its dominance throughout the forecast period. The presence and expansion of multiple data centers in the U.S., increasing demand for simplified network management solutions in various businesses, the need for network flexibility and scalability, a large number of digital transformations, availability of numerous companies providing SDN services in the country, and early adoption trends associated with innovation. The emergence of advanced technologies has developed a need for changes and enhancements in networks and infrastructures. The growing adoption of cost-effective open-source technologies and the alarming need to upgrade network capabilities to address the needs of modern citizens, military, and government structures are expected to develop growth for the U.S. software-defined networking market during the forecast period.

Asia Pacific Software Defined Networking (SDN) Market Trends

The Asia Pacific software-defined networking market is expected to experience the fastest CAGR over the forecast period. This is attributed to unprecedented growth in the digital transformation of businesses operating in the region, growing demand for network management solutions that are compatible with advanced emerging technologies such as artificial intelligence, IoT, and machine learning, and increasing need for improved network capabilities to address requirements of expanding telecom sector in the region. The rise in demand for SDN solutions by government agencies to manage urban networks and modern systems is also contributing to the growth of this regional market.

India software-defined networking market held significant revenue share of the regional industry in 2023. This market is mainly driven by the factors such as large number of businesses and organizations focusing on digital transformations, increasing number of services providers entering in the country from regions such as North America and Europe, rapidly expanding telecom industry networks in the country, and increasing emphasis by government to utilized digitized approach in business functions and service delivery. The substantial increase in digital activities of banking and financial services industry in the country, presence of multiple prominent companies from software business, and growing demand for simplified network management and security systems is expected to fuel growth of this market during forecast period.

Europe Software Defined Networking (SDN) Market Trends

The Europe software defined networking market is anticipated to experience significant growth over the forecast period. Strict regulations regarding data and network security, growing cyber threats identified by the governments and organizations, increasing demand for effective network management and infrastructure development services, and rise in adoption of modern technologies such as artificial intelligence, IoT and others. The expansion of telecom networks and increasing use of cloud computing technology by businesses in the region also has influenced this market.

The UK software defined networking market held a noteworthy revenue share of the regional industry in 2023. This is attributed to rapid pace of digital transformations in the country, large number of companies seeking enhanced, effective network security, and management solutions, growing demand for flexibility and scalability and availability of multiple SDN solutions provided by global and domestic industry participants.

Software Defined Networking Company Share & Insights

Some of the key companies in the market are Arista Networks, Inc., Cisco Systems, Inc., Dell Inc., IBM, Extreme Networks., Juniper Networks, Inc., Nokia, and others. To address the growing competition and need for enhanced portfolios regarding networking capabilities, the key market participants in this industry are adopting strategies such as mergers & acquisitions, portfolio expansions, enhanced research & developments, and innovation.

• IBM, one of the major market participants in the technology and computing services industry, offers multiple solutions related to IT automation, DATA & AI, customized end to end industry solutions, infrastructure, security, sustainability, and consulting services as well. It assists customers in over 175 nations in leveraging insights from data, optimizing business operations, cutting expenses, and obtaining a competitive advantage in their respective fields.

• Cisco Systems, Inc., a prominent organization in the technology and innovation market, offers IT and networking services related to enterprise network security, software development, data collaboration, cloud computing, and other related areas. It focuses on technology sectors such as the Internet of Things (IoT), domain security, video conferencing, and energy management. It offers top products such as Webex, OpenDNS, Jabber, Duo Security, Silicon One, and Jasper.

Recent Developments

• In March 2024, IBM, a major organization in the technology and computing industry, acquired a key player in network and IT automation solutions, Pilant. With this, IBM has accomplished enhanced capabilities to offer IT automation solutions to its clients in a radically simplified manner. This adds to the organization's capacity to assist client businesses in automating networks and infrastructures with the help of tools that help them secure automation, integration, and connection of platforms, applications, and services within their environment.

• In January 2024, Hewlett Packard Enterprise Development LP (HPE), one of the prominent companies in the technology and innovation industry, and Juniper Networks Inc., a major market participant in networking solutions, announced that the two have recently entered a definitive agreement under which Hewlett Packard Enterprise Development LP is set to acquire Juniper Networks Inc. The acquisition is expected to boost HPE’s networking capabilities and revenue share in the market with an expanded portfolio. A joint force of two key companies in software-defined networking is anticipated to influence the industry significantly in the next few years.

Software Defined Networking Market Report Scope

Global Software Defined Networking Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the software defined networking market report based on component, type, end use, and region.

• Component Outlook (Revenue, USD Billion, 2018 - 2030)

  • Solutions

    • Physical Network Infrastructure

    • Virtualization/Control Software

    • SDN Application

    • SDN Controllers

  • Services

    • Consulting

    • Integration and Deployment

    • Training and Maintenance

    • Managed Services

• Type Outlook (Revenue, USD Billion, 2018 - 2030)

  • Open SDN

  • SDN via API

  • SDN via Overlay

  • Hybrid SDN

• End Use Outlook (Revenue, USD Billion, 2018 - 2030)

  • Enterprise

  • Telecommunication Service Providers

  • Cloud Services Providers

  • Managed Service Providers

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

  • Middle East and Africa (MEA)

    • Saudi Arabia

    • UAE

    • South Africa