Network function virtualisation (NFV) and software-defined networking (SDN) are transforming industries across various verticals and are no longer confined to the telecom and IT sectors. They have reshaped industry workings from traditional integrated hardware-centric solutions to modular hardware-agnostic frameworks. Enterprises and businesses across verticals are now relying on SDN and NFV technologies to reap higher returns from their investments in the IT sector.

The SDN market is estimated to grow from over $8 billion in 2018 to $100 billion by 2025, as per a 2019 Global Market Insights report. The Asia-Pacific SDN market is anticipated to grow at a compound annual growth rate (CAGR) of over 40 per cent during the projected timespan. This exponential growth will be due to the widespread adoption of new networking technologies. The SDN controller market is estimated to grow at a CAGR of over 40 per cent over this time.

Cloud service providers are leveraging the abilities of SDN to build a cloud internetwork for augmenting flexibility and scalability of cloud-based platforms.

NFV focuses on the separation of software and hardware platforms. The main idea behind NFV is that virtualised network functions are implemented through software virtualisation techniques and run on commodity hardware, whereas SDN is a network architecture approach based on the idea of decoupling the control and data planes. When coupled with virtualisation, SDN can provide significant improvements in terms of agility for deployment and effective resource utilisation.

A look at some of the key applications of SDN and NFV in enterprises across verticals…

Financial services

Today, the financial services industry is facing competition from fintech companies and a more demanding client base. To this end, the industry is taking a more customer-centric approach. Networks in the financial sector need to be better secured as part of a comprehensive and uncompromised connectivity strategy. In this scenario, SDN can be deployed to make networks more responsive and secure. SDN offers many business benefits to financial institutions including greater security, centralised provisioning and management, traffic shaping and prioritisation, lower capex, lower opex and greater application control. For instance, North Carolina-based Entegra Bank has recently deployed a Silver Peak software-defined wide area network (SD-WAN) solution in order to increase connectivity and reduce its bills by 50 per cent, while simultaneously maintaining security regulations. By using SDN, the companies are repurposing their existing hardware to centralise the management. Further, SDN allows organisations to control and prioritise data traffic, ensuring that the most important services are delivered first. Using an SDN controller, organisations can provide and manage their network resources in all locations. Going forward, SD-WAN, SDN and NFV will make financial services companies flexible, responsive and agile.


In the era of SDN, virtualised networks are being configured by IT operators for better programmability and improved management. It has transformed the workings of network architecture in favour of industries, including manufacturing. As per the 2019 Global Market Insights report, the share of the SDN market in the manufacturing industry is expected to register a growth rate of over 40 per cent by 2025. The growth for SDN solutions is mainly driven by the increasing proliferation of advanced technologies such as internet of things (IoT) and machine-to-machine.

Today, the needs of large-scale manufacturers mostly revolve around real-time information sharing across multiple operating functions, manufacturing locations, partners and suppliers. SD-WAN has reshaped the manufacturing sector by providing IoT connectivity, cloud computing and most importantly, security. Enterprises in the manufacturing industry use WAN for applications such as real-time audio/video monitoring to manage the production line. IoT helps manufacturers gain a better understanding of supply chain information by connecting the machines and equipment to suppliers. Further, SD-WAN provides exceptional network visibility for managing IoT endpoints and prioritising traffic. With manufacturers drifting away from on-premises hosting, SD-WAN is becoming critical in the optimisation of cloud-service connectivity. The use of right SD-WAN solution offers exceptional security via superior quality firewall policies to rate, limit and automatically set up tunnels with end-to-end encryption for secure connectivity.


Healthcare organisations are introducing more connected devices into their health IT infrastructure, which calls for increased network visibility and management. At present, entities are dealing with Wi-Fi connectivity, which supports cloud applications, IoT devices and tele-health programs all running on the same wireless network. All this traffic potentially leads to slow connections due to overloaded bandwidth and bottlenecks as large healthcare organisations are faced with countless switches and routers that need to be maintained individually. SDN can help in preventing this problem.

In addressing the needs of improving patient care and medical technologies, upgraded networks can benefit from SDN’s speed, flexibility and agility. Further, SDN not only helps in better patient monitoring but also provides the security and flexibility needed to transfer patient data from one endpoint to the other. SDN helps hospitals prioritise critical applications over any other communication as it can differentiate between patient records for routine check-up and those for emergency. For instance, hospitals can use SDN to deploy separate virtual networks on an individual physical network to keep tabs on discharged patients.  Further, with big data analytics, healthcare providers can predict epidemics, more accurately diagnose and cure illnesses and avoid preventable deaths. Thus, in the healthcare space, SDN technology can both support applications used today and help organisations prepare for the future.

IT and telecom

As India plans to roll out 5G telecom services in the coming years, operators will adopt new network architecture under which virtualisation will be one of the most critical aspects. SDN and NFV are redefining the speed at which telecom and IT players can deploy services. SDN separates network control functions from network forwarding functions, while NFV virtualises network forwarding functions and other networking functions run on proprietary, dedicated hardware. There are certain features present in the cloud architecture based on NFV backed by SDN such as data analytics and automation that are not available in legacy networks. SDN and NFV can provide bandwidth flexibility, automation and programmability enabling telecom providers to monetise their whole range of cloud services, which are essentially linked to 5G, smart home, IoT, connected car and more. At present, original equipment manufacturers, mobile virtual network operators as well as major players such as Amazon, Google and Facebook have significantly increased their R&D investment in SDN and NFV. In addition, with NFV, telecom service providers can rapidly launch innovative network services. The technology also provides them the flexibility to scale up (or down) as per varying business demands. SDN also impact the way communication service providers build and operate their data centres/cloud networks.


The retail industry is the most competitive industry in India. With 5G knocking on the door, both online and offline retail are heavily dependent on SDN and NFV. With centralised management, enabled by SDN architecture, retailers can add or subtract cloud services, easily connect to them, configure and scale networks and increase bandwidth. This would provide them with greater flexibility and empower them to seamlessly try new services and set up new stores in different locations. Further, virtualised and centralised networking solutions can also help retailers to reduce the cost of purchasing and installing the hardware to support their applications and requirements. New retail services such as virtual fitting rooms will use augmented reality. The retail sector is slowly adopting SDN for connecting stores across locations. For instance, Gap Inc., an American clothing and accessories retail giant, started leveraging SDN way back in 2015 for connecting its internet stores over public internet using encrypted connections. The company has installed over 800 software-defined routers in its stores providing over 10 to 15 times more bandwidth to each store than it previously had. The software approach made network upgrades or changes in remote locations much easier and led to about 50 per cent reduction in costs compared to the conventional method of WAN connectivity. However, the dual challenges still remain including reduction of complexity across verticals and modernising the network and in-store IT infrastructure.


One of the key elements driving the adoption of SDN is the growing use of NFV. SDN and NFV technologies are complementary. While SDN focuses on the control plane, NFV critically optimises the actual network services that manage data flow. The biggest growth in demand for NFV would be from carrier network operators that plan to change the design and implementation of network services.