In a contemporary connected, always online world, software-defined networking (SDN) and network function virtualisation (NFV) have attracted attention and are gradually altering how networks are constructed and operated. SDN is a network architecture that allows networks to be smartly and centrally controlled, or programmed via software applications. This helps operators in managing entire networks consistently and holistically, regardless of the current network technology. NFV is quite similar to SDN in concept, but also has its own unique features. It uses technology to virtualise network services that usually run on proprietary hardware, such as firewalls, load balancers, routers and switches, in order to make them more efficient and reduce cost.
According to research conducted by Market Watch, the SDN and NFV market will witness a significant boost in the coming five years. The market, which was valued at $38.45 billion this year, is expected to reach $97.39 billion in 2028, demonstrating a compound annual growth rate of 16.75 per cent between 2023 and 2028. This growth is, in part, driven by enterprises across sectors that are leveraging SDN and NFV technologies to streamline their operations.
A look at the key applications of SDN and NFV across enterprise verticals…
Manufacturing
A trend that is being noticed worldwide is the automation of manufacturing processes through streamlined data exchange with SDN and NFV, creating smart factories. SDN architecture brings benefits such as easy integration and blending of new network components, deployment and service without any physical effort, opportunities to integrate gateways for cross-data centre and cross-domain connectivity, and the ability to control the bandwidth and scalability of system components for optimal performance. It also brings cost efficiency and sustainability. Today, the needs of large-scale manufacturers revolve around real-time information sharing across multiple operating functions. A resilient software-defined wide area network (SD-WAN) can cut down network downtime by detecting outages in real time.
Meanwhile, NFV decouples and relocates network functions to virtual servers, thus eliminating the need for dedicated hardware for each network function. This will ensure that tasks such as enterprise resource planning; material requirements planning; warehouse management systems; shipping; logistics; and handling channel partners, distributors and retailers will be entirely automated with respect to making real-time adjustments and forecasting based on need, inventory and scheduling changes.
Telecom and IT
Telecom operators are looking for new ways to prepare for business demands by investing in scalable and flexible next-generation network infrastructures. NFV facilitates a more agile network infrastructure with a reduction in cost and an increase in efficiency. Operators are looking to expand beyond voice and data. One of the major advantages of NFV in telecom is that the network functionality can be changed as per demand, since it runs on easily manageable virtual machines. Their capacity can be scaled up and down, resulting in a reduced time-to-market for new or updated products along with greater efficiency.
SDN, in contrast, became a popular term within the telecommunication industry over a decade ago. It revolutionised the way networks were designed, managed and operated by bringing in a centralised approach. It reduces the need for newer hardware to adapt to the requirements of the network, considerably limiting investment requirements. It also enables autonomy, making it easy to establish rules through codes. And finally, it reduces the requirement for human intervention when network conditions change, allowing all solutions to be more flexible. In 2023, The SDN market’s largest segment by application was the telecom and IT sector, with a market share of 57.81 per cent.
Healthcare
The healthcare industry is also being transformed with the advent of digitalisation. This industry is filled with rich data, and there are multiple cases where internet of things (IoT) and big data analysis can be used to provide the best patient care. The challenge here is to continuously introduce healthy amounts of highly advanced technologies that can offer efficient resource utilisation and ensure the security of cross-platform communications.
To this end, SDN can increase the adoption of IoT as it enables effective resource utilisation, adequate uptime safety, flow control, on-demand bandwidth and sustainable quality of service. Meanwhile, with the emergence of a variety of wearable devices, wellness information platforms are also undergoing major changes. To enable continuous monitoring of wellness service users, it is crucial to provide agility and mobility support for NFV.
Retail
Retailers today require networks that are flexible enough to keep up with the modernising landscape of the retail industry. The advent of retail IoT has, made it possible to satisfy consumers’ demand for trending insights across online and in-store interactions. Smart shelves, beacons, robots and more are being employed on a large scale to provide a personalised experience and win customer loyalty. The burgeoning IoT technology brings with it plentiful end devices and edge computing, dispersed across locations, but also the need for storing and managing this plethora of data. SDN’s flexibility is paramount in these situations, as its ability to dynamically adjust network behaviour based on traffic fluctuations, policy reforms and security outages will back IoT environments, allowing them to operate at full potential. SDN also brings down the cost of purchasing and installing hardware to support applications, while ensuring that the maintenance requirements of the centralised control facilitated by SDN remains minimal.
Edge computing is one of the numerous emerging technologies transforming retail stores. It provides a new paradigm for running existing applications such as point of sales, and is ready for all distributed microservices. This shows how software-defined concepts give retailers autonomy and power to make things happen instantly across their business from a single point, while not having to rely on anyone else.
Banking and finance
From enhancing existing features such as online banking to implementing emerging technologies such as blockchain and chatbots, financial institutions have always had a tech-forward mindset. A number of financial services firms require networking infrastructure that can provide all necessary security; be intelligent, flexible and agile enough to support its applications and services; and power customer-first experiences. Hence, multiple financial institutions are turning towards software-defined methods for network infrastructure. SDN provides the right intelligence to make a network more responsive and secure, regardless of where the data resides – be it on premises or in the cloud. Provisioning and management of network resources are handled centrally, thus ensuring that all systems are up to date and meet compliance requirements. The integrity and security of sensitive financial information are maintained from a centralised management system.
This, in turn, provides benefits in provisioning and management. SDN separates the intelligence of the network from the data, enabling network administrators to manage the devices on a network from a central site. Central management also benefits the security of the network. SDN controllers provide a central point of control to distribute security and policy information consistently. It lowers the operating cost, as many routine network administration tasks can be centralised and automated.
Conclusion
The SDN and NFV market has proven its viability time and again in this era of constant digitisation. As many countries are rolling out 5G services, the usability of both SDN and NFV is increasing. It is easier to integrate them with 5G infrastructures, in turn, enabling greater support for customisation, flexibility and management. SDN and NFV will soon become more responsive, fully automated and highly secure technologies. More and more companies will move towards using these technologies to solve traditional networking problems such as latency, bottlenecks and geographical boundaries.
