Virtual CPE Software and Hardware Market Will Reach $3 Billion in 2021

Virtual CPE Software and Hardware Market Will Reach $3 Billion in 2021
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A new forecast from IDC estimates that the worldwide virtual CPE infrastructure market, hardware and software, will exceed $3 billion by 2021. IDC forecasts the virtual CPE software market to grow from $145.7 million in 2016 to $2 billion in 2021 at a compound annual growth rate (CAGR) of 68.3%. The virtual CPE hardware market is expected to grow from a base of $67.8 million in 2016 to $1.16 billion in 2021 at a CAGR of 76.4%.

The most significant driver of NFV at the network edge, virtual CPE, over the next five years will be digital transformation (DX) in which enterprises deploy 3rd Platform technologies, including cloud, big data and analytics, mobility, and social business, to unlock new sources of innovation and creativity that enhance customer experiences and improve financial performance. SD-WAN is the WAN's response to the migration of apps to the cloud in the enterprise's pursuit of DX goals. SD-WAN, is also the precursor of a broader virtual network functions (VNF) deployment at the network edge under the virtual CPE paradigm.

Finally, IDC believes there is a broader acceptance, and adoption, of software-defined networking (SDN) throughout the enterprise. As virtualization, cloud management, and SDN continue to gain traction throughout enterprise networks, virtual CPE will benefit from this paradigm shift and receive increasing consideration. It also helps that virtual CPE also promises enterprises a strong ROI.

"A strong business case exists for network functions virtualization at the network edge — the deployment of virtual CPE/VNF software on commodity hardware," said Rajesh Ghai, research director, Carrier Network Infrastructure. "While the short-term business benefit may be in the form of lower acquisition costs, the long-term business case rests on the advantages that accrue from simplicity, flexibility, and agility that it bestows on the enterprise or the service provider delivering the network service. This thought process underpins IDC's market forecast for vCPE infrastructure in this report.