Friday, May 12, 2017

ABI forecasts NFV market to reach $38bn by 2022

According to ABI Research's latest Network Functions Virtualization Tracker and Forecasts report, after a slower start than initially anticipated, the network function virtualisation (NFV) market is set to experience moderate growth based on continuing NFV investments by major telcos.

ABI Research forecasts that North America will be the largest market, accumulating $13 billion in NFV-related investments during 2022, while Europe will see the highest growth rate with an estimated 53% CAGR between 2017 and 2022. The research firm notes that early adopters claim benefits offered by NFV-enabled systems including reductions in network capex and opex, service agility and faster deployment of new network elements.

ABI forecasts that overall NFV market revenue will reach $38 billion in 2022, although hardware expenditure, including servers, storage devices and switches, is expected to decline over time, while software and services segment spending is forecast to experience growth rates of 55% and 50%, respectively.

ABI notes that although the NFV market is evolving and technical expertise is starting to mature, the standardisation and multi-vendor involvement challenges will remain over the next two years. It adds that software and services vendors will have the opportunity to identify NFV use-cases for enterprise verticals and leverage these to deliver end-to-end integrated systems.

In terms of suppliers, ABI believes that the established vendors, including Ericsson, Huawei and Nokia, plus specialists such as Amdocs and Netcracker, will see early success, with systems integration becoming ever more important. It also notes that vendors are investing in open source software, which may increase business opportunities initially but could create difficulties in the future, particularly if telco interest in specific open source projects wanes.

ABI notes that currently, NFV is primarily seen as a means of reducing costs, but that new revenue opportunities will require a wider transformation which is likely to be driven by 5G after 2020.

Commenting on the report, Neha Pachade, senior analyst at ABI Research, said:

-           "In 2015 and 2016 the market experienced some early successes, but mostly reconsiderations and failures with NFV… early adopters conducted proof of concept testing and NFV-integrated system demonstrations to understand the impact of NFV in the technical, operational and cultural domains".


-           "Forecasts indicate that NFV will become a sizeable opportunity for vendors, although it is not yet clear whether it will cannibalise existing hardware-based product lines or create new market use cases".


Centec and DASAN Form Partnership

Centec Networks, a supplier of Ethernet switching silicon and SDN white box solutions, and DASAN Network Solutions, a provider of network solutions in Korea, announced a partnership intended to enable the joint development of flexible and cost-effective next generation network solutions.

By combining Centec's advanced high-speed Ethernet switching silicon with DASAN's system design expertise, the two companies plan to jointly develop next-generation network switching solutions designed to address all layers of the open-networking ecosystem, from chips and equipment to network operating systems and applications.

The partners noted that they are already collaborating in a number of industry standards groups, and through the new partnership plan to expand their work together on industry specifications and initiatives aimed at addressing networking demands arising from the growth in global data traffic, with a focus on enhancing flexibility and efficiency and reducing cost of ownership.

In September 2016, Zhone Technologies announced it had completed the acquisition of DASAN Network Solutions to create DASAN Zhone Solutions, a global provider of fibre access solutions for enterprise and service provider networks, with the combined entity 58% owned by DASAN Networks, formerly the parent company of DASAN Network Solutions.

DASAN Zhone Solutions, based in Oakland, California and with manufacturing facilities in the U.S., Korea and China, is a provider of fibre and copper broadband access, Ethernet switching, mobile backhaul, passive optical LAN and software defined networking solutions.

In November last year, Centec Networks and EmbedWay, a provider of intelligent infrastructure products and solutions, jointly introduced the ExSwitch6400 series 10 Gigabit Ethernet SDN white box solution, claimed to be the first high-density 10/40 Gigabit Ethernet open-networking platform to offer native 100 Gigabit Ethernet (4 x 25 Gbit/s SerDes) uplinks.

ADTRAN appoints Gregory McCray, CEO of Alphabet's Access, to board

ADTRAN, the provider of next-generation open networking solutions, announced the appointment of Gregory McCray, CEO of Alphabet's Access Company, the subsidiary that oversees the Google Fiber operation, to its board of directors.

ADTRAN stated that Mr. McCray's background in building the connected future is expected to be an asset to its board as the company focuses on expanding the availability of gigabit broadband to support the demands of smart cities, the Internet of Things (IoT) and software-defined networking (SDN).

Gregory McCray has extensive experience in marketing, sales, engineering, operations, M&A, management and international roles within the communications technology industry. As CEO of Access, he is leading efforts to deliver gigabit access to support Internet, TV and phone service in markets across the U.S.

Previously, Mr. McCray served in a number of executive roles, including CEO of Aero Communications, which provides installation, services and support to the communications industry and chairman and CEO of PipingHot Networks, a provider of broadband fixed wireless access equipment.

Gregory McCray has also held positions including SVP of customer operations at Lucent Technologies, where he managed the customer technical operations group for EMEA, and as a member of the board with CenturyLink, where he served as chairman of the cyber security and risk committee, as a member of the compensation committee and the nominating and corporate governance committee.


Mr. McCray holds a B.S. in Computer Engineering from Iowa State University, an M.S. in Industrial & Systems Engineering from Purdue University and has completed executive business programs at the University of Illinois, Harvard and INSEAD.


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