Brandon Smith

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Virtual Network Functions Market 2020 to 2027 – Market Share, Growth, Industry Segments, Competitor Landscape, Key Players, Trends and Forecasts

Market Synopsis

The global market for virtual network functions is expected to grow to around USD 25 billion by 2027, at a 30% CAGR over the review period (2020-2027).

Drivers and Restraints

The major factors driving the demand for virtual network functions include the rising need for advanced network management systems to handle the increasing complexity and complexities of networks. The virtual network function market is expected to experience a rapid growth as network virtualization technologies enable companies to reduce the costs associated with hardware equipment procurement and maintenance. Compared with traditional networking approach, the technologies help deliver network services in a more scalable way. The enterprises quickly embrace network virtualization solutions as they promote faster server delivery and rapid deployment of network services. SMEs are projected to experience a heavy use of virtualization solutions as they allow server & device consolidation and enhance disaster recovery. They can also handle multiple workloads with maximum uptime and improved performance by deploying those solutions. Rapid investment to market 5 G networks will also drive demand for solutions to virtual network functionality. Implementing the virtualization system would greatly improve the practical and technological feasibility of the 5 G network including improved mobility and decreased capital expenditure.

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On the flip side, service providers' lack of quality as per the normal policies and safety requirements regulated by the European Telecommunications Requirements Institute (ETSI) is expected to be a major challenge factor for the virtual network functions over the review period.


The virtual network functions market is differentiated by component, organization size, deployment, and end-user.

By component, the virtual network functions market is sub-segmented as software, hardware, and services. The hardware sub-segment comprises switches, storage, servers, and others. The software sub-segment comprises network security, application software, and load balancing. Furthermore, the service sub-segment is categorized as consulting service, training & support, integration & implementation and others. 

On the basis of deployment, the market is bifurcated into on-premises and on-cloud. 

Based on the organization size, the market is divided as large enterprises and Small & Medium Enterprises (SMEs).

Furthermore, on the basis of end-user, the market is classified as IT & telecom BFSI, healthcare, manufacturing, government, and others.

Regional Assessment

The Virtual Network Functions are geographically segmented into four different regions, namely North America, Asia Pacific , Europe and the rest of the world.

In the market for virtual network functions North America is presumed to have a significant growth. The United States and Canada are the region's premier countries. That is due to the region's advanced telecom services. Europe is also projected to see substantial demand growth.

It is expected that the United Kingdom, France and Germany will be leading countries due to the increase in service providers, which will focus mainly on virtual network platforms in the coming years. 

Asia Pacific is also projected to be the fastest-growing region in the market for virtual network functions over the review period. Japan , India, and China are the leading countries on the Virtual Network Functions market, owing to the increased use of tablets , laptops, and smartphones, as well as the increased availability of IP content.

The remaining segment of the world is also expected to witness significant growth over the review period. The the number of data centers in countries like Mexico, Brazil and GCC increased the use of virtualization server solutions to run heavy workloads and cloud applications. As well, growing investments in 5 G technology creation would fuel market growth. Countries including Mexico, Saudi Arabia, Dubai and Kuwait are exploring 5 G technology in this region and undertaking 5 G live tests on speed, equipment and latency. Telecom operators in the region are therefore preparing to switch to technology for virtualisation and SDN-based solutions for flexible and scalable network management.

Key Players

Some of the market players of Virtual Network Functions market include Cisco Corporartion (U.S.), Alcatel-Lucent (France), Ericsson (Sweden), F5 networks (U.S.), Huwaei (China) , Tech Mahindra (India), Ribbon Communications (U.S.), Trend Micro (Japan), Telefonica (Spain), Verizon Communications (U.S.), Fujitsu (Japan), NEC corporation (Japan), HP Enterprise( U.S.), and Aricent Incorporation (France).

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Table of Contents

1 Executive Summary

2 Scope of The Report

2.1 Market Definition

2.2 Scope of The Study

2.2.1 Research Objectives

2.2.2 Assumptions & Limitations

2.3 Market Structure


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