Market Research Reports - Industry Analysis Size & Trends - Technavio (2024)

Software-Defined Networking (SDN) Market Size 2024-2028

Thesoftware-defined networking (SDN) market size is forecast to increase by USD 67.37 billion,at a CAGR of 29.04% between 2023 and 2028.Market growth hinges on several factors such asthe escalating demand for cloud solutions adopted by enterprises seeking scalability and flexibility, an increasing emphasis from enterprises on modernizing data centers for enhanced efficiency and security, and the rising influx of investments into data centers. These trends underscore a fundamental shift in business strategies towards digital transformation, where cloud technologies and modern data center infrastructures play a pivotal role in meeting evolving business needs. As enterprises navigate the complexities of digitalization, the convergence of cloud solutions and data center modernization emerges as a crucial driver propelling market expansion and technological innovation in the industry.

What will be the Size of the Market During the Forecast Period?

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This report extensively coversmarketsegmentation by End-user (BFSI, Healthcare, Retail, Education, and Others), component (physical network infrastructure, SDN applications, and controller software) and geography (North America, APAC, Europe, South America, and MEA).

By End-user

The market share growth by the BFSI segment will be significant during the forecast period.The BFSI segment of the market is experiencing remarkable growth due to the need for secure and high-performance networks in the banking, financial services, and insurance industries. This enables financial institutions to centrally manage network policies and security configurations, ensuring compliance and enhancing application performance.

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The BFSI segment showeda gradual increase in the market share of USD 2.93 billionin 2018. With the increasing adoption of IoT devices and ecosystems, this becomes crucial for dynamically allocating resources, optimizing traffic flows, and enhancing security. Companies like Symantec are implementing Zero Trust and IoT Security solutions to address security concerns ininfrastructure. Interoperability challenges and security concerns persist, necessitating advanced encryption protocols, threat detection mechanisms, and proactive measures in cloud environments and networks. SDN use cases include autonomous networks for service providers and telecom operators and component-based SDN infrastructure for businesses. Cloud-native architectures and elasticity are key benefits of SDN, offering automation and increased security for diverse systems and cybersecurity needs. Therefore, the growing adoption of this technology in the BFSI segment is expected to fuel the growth of themarket during the forecast period.

By Component

The market encompasses a range of solutions and services that optimize the digital landscape of enterprise networks. This enables applications to interact directly with the network infrastructure via an SDN controller, requesting services and obtaining information. This interaction results in enhanced capabilities, including traffic engineering, routing, switching, monitoring, load balancing, and more. By automating network infrastructure and providing flexibility to application requirements, these solutions and services streamline network management and improve overall network performance.Thus, the physical network infrastructure segment of the global software-defined networking market will continue to witness growth during the forecast period.

By Region

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North Americais estimated tocontribute 38% to the growth of the global market duringthe forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

The market in North America is experiencing remarkable growth due to the increasing adoption of IoT devices and ecosystems in various industries. Financial institutions in the BFSI segment, including banking and insurance, are particularly driving this trend due to their requirement for secure and high-performance networks. This enables network policies and security configurations to be dynamically allocated, optimizing traffic flows and enhancing application performance. With the surge in IoT investments and 5G adoption, this is becoming increasingly important for businesses to address interoperability challenges and security concerns in diverse systems. Companies like Symantec are providing advanced encryption protocols, threat detection mechanisms, and proactive measures to ensure secure networks in cloud environments and cloud-native architectures. The elasticity and automation offered by theinfrastructure are also attractive to service providers and telecom operators. Use cases for SDN include autonomous networks, Zero Trust, and IoT Security at the LAN Edge. However, component interoperability and cybersecurity remain key challenges in the SDN market. Hence, these factors are expected to fuel the growth of themarket in North America during the forecast period.

Market Dynamics and Customer Landscape

In the dynamic and complex world of organizations' network management, Software-Defined Networking (SDN) architectures have emerged as a game-changer. This enables control functions to be decoupled from the underlying network infrastructure, providing targeted responses to system failures, unauthorized access, and malicious activities. SDN's centralized controller plays a crucial role in managing network resources, implementing authentication mechanisms, and encrypting data flows to ensure continuous monitoring and security. Advanced security technologies, such as SDN security, are essential in addressing emerging threats and advanced malicious activities that can disrupt network bandwidth, latency, and network redundancy. As the 5G ecosystem evolves, SDN's intelligent network architecture becomes increasingly relevant. SDN for 5G enables agile networks, collaboration, and reliability concerns, addressing outages and ensuring network redundancy. In the Enterprises segment, the control plane offers significant advantages, enabling organizations to adapt to the ever-evolving threat landscape and maintain network reliability.

Key Market Driver

The high demand for cloud solutions adoption by enterprises is the key factor driving market growth. In today's digital landscape, the market is witnessing significant growth due to enterprises' increasing adoption of cloud solutions. These businesses seek the advantages of lower operational expenses and the flexibility to adjust workloads based on their needs. Hybrid cloud solutions and multi-cloud environments have become popular choices, allowing enterprises to utilize both private and public clouds for scalability. Cloud data centers have expanded rapidly to cater to this demand. These services offer enterprises the ability to manage their grids more efficiently and effectively, making them an essential component of modern business infrastructure. Thus, these solutions that can offer enhanced utilization of network infrastructure will continue to witness significant demand, which in turn will drive the market during the forecast period.

Significant Market Trends

The rise of IoT and edge computing is the primary trend shaping market growth.In the digital landscape of today, Software-Defined Networking (SDN) solutions and services have gained prominence due to the escalating demand for IoT applications. With the proliferation of connected devices in sectors such as automotive, residential, and urban development, there is a pressing need for networks that can provide low latency and high bandwidth. Traditional networks are ill-equipped to handle the massive data volumes generated by IoT applications. SDN, with its software-controlled network management and dynamic resource allocation capabilities, offers a viable solution. As enterprises expand their reach globally to tap new markets, SDN's centralized network management and improved network efficiency become essential components of their digital strategy.

Major Market Challenge

Network design challenges in SDN technology is a challenge that affects the market growth. In the digital landscape, Software-Defined Networking (SDN) has emerged as a prominent solution for enterprises seeking to optimize network resources and reduce operating costs. However, the adoption of SDN is not without challenges. One such challenge is the design of SDN networks, which necessitates addressing scalability concerns. With the potential for heavy network traffic, there is a risk of bottlenecks between the controller and forwarding devices, as a single controller may not be able to accommodatescale-up. Enterprises require reliable SDN services to mitigate these challenges and ensure network efficiency, flexibility, and elasticity. This process has slowed down the growth of themarket to an extent over the past few years, which in turn may impede the growth of the market during the forecast period.

Key Market Customer Landscape

The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

GlobalMarket Customer Landscape

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

  • Arista Networks Inc.: The company offers software-defined networking solutions such as Arista EOS network stack, and network data lake architecture, with the application of artificial intelligence and machine learning (AI/ML) to automation and security challenges.
  • AT and T Inc.: The company offers software-defined networking solutions such as NEC ProgrammableFlow Networking Suite to leverage the OpenFlow protocol.
  • Broadcom Inc.: The company offers software-defined networking solutions that support a wide range of applications and network management tasks while reducing network complexity, harnessing network level control, and boosting optimization.

The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

  • Ciena Corp.
  • Cisco Systems Inc.
  • Dell Technologies Inc.
  • Extreme Networks Inc.
  • Hamburgnet eK
  • Hewlett Packard Enterprise Co.
  • Huawei Technologies Co. Ltd.
  • International Business Machines Corp.
  • Juniper Networks Inc.
  • Kyndryl Inc.
  • Nokia Corp.
  • NVIDIA Corp.
  • Oracle Corp.
  • Schweitzer Engineering Laboratories Inc.
  • Telefonaktiebolaget LM Ericsson
  • VMware Inc.
  • Wipro Ltd.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024to 2028, as well as historical data from 2018to 2022for the following segments.

  • End-user Outlook
    • BFSI
    • Healthcare
    • Retail
    • Education
    • Others
  • Component Outlook
    • Physical network infrastructure
    • SDN applications
    • Controller software
  • Region Outlook
    • North America
      • The U.S.
      • Canada
    • Europe
      • U.K.
      • Germany
      • France
      • Rest of Europe
    • APAC
      • China
      • India
    • South America
      • Chile
      • Brazil
      • Argentina
    • Middle East & Africa
      • Saudi Arabia
      • South Africa
      • Rest of the Middle East & Africa

Market Analyst Overview

Software-Defined Networking (SDN), a revolutionary technology, is transforming the networking industry. The architecture separates the control plane from the data plane, enabling centralized management and automation of network functions. This innovation brings agility, flexibility, and efficiency to enterprise networks. Themarket is experiencing significant growth due to its ability to address modern networking challenges. With SDN, organizations can easily implement traffic engineering, network security, and application optimization.

Moreover, the open standards and interoperability make it an attractive choice for businesses seeking seamless integration with their existing infrastructure. companieslike SDN, Cisco, and Juniper Networks are investing heavily in R&D to deliver advanced features and functionalities. The market is expected to grow at a CAGR of 25% between 2021 and 2026, driven by increasing adoption in various industries, including telecommunications, healthcare, and finance. In conclusion, Software-Defined Networking is a game-changer in the networking landscape, offering numerous benefits to organizations. Its market is poised for exponential growth, driven by the demand for agile, flexible, and efficient networking solutions.

Market Scope

Report Coverage


Page number


Base year


Historic period


Forecast period


Growth momentum & CAGR

Accelerate at a CAGR of 29.04%

Market growth 2024-2028

USD 67.37 billion

Market structure


YoY growth2023-2024(%)


Regional analysis

North America, APAC, Europe, South America, and Middle East and Africa

Performing market contribution

North America at 38%

Key countries

US, Australia, China, Japan, and UK

Competitive landscape

Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks

Key companies profiled

Arista Networks Inc., AT and T Inc., Broadcom Inc., Ciena Corp., Cisco Systems Inc., Dell Technologies Inc., Extreme Networks Inc., Hamburgnet eK, Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., International Business Machines Corp., Juniper Networks Inc., Kyndryl Inc., Nokia Corp., NVIDIA Corp., Oracle Corp., Schweitzer Engineering Laboratories Inc., Telefonaktiebolaget LM Ericsson, VMware Inc., and Wipro Ltd.

Market dynamics

Parent market analysis, market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period.

Customization purview

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What are the Key Data Covered in thisMarketReport?

  • CAGR of the market during the forecast period
  • Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
  • Precise estimation of the size of the market size and its contribution to the parent market
  • Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
  • Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
  • Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
  • Comprehensive market analysis and reporton the factors that will challenge the market research and growth of market companies

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Market Research Reports - Industry Analysis Size & Trends - Technavio (2024)
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