Trusted Business Insights answers what are the scenarios for growth and recovery and whether there will be any lasting structural impact from the unfolding crisis for the Network Transformation market.
Trusted Business Insights presents an updated and Latest Study on Network Transformation Market 2020-2029. The report contains market predictions related to market size, revenue, production, CAGR, Consumption, gross margin, price, and other substantial factors. While emphasizing the key driving and restraining forces for this market, the report also offers a complete study of the future trends and developments of the market. The report further elaborates on the micro and macroeconomic aspects including the socio-political landscape that is anticipated to shape the demand of the Network Transformation market during the forecast period (2020-2029).
It also examines the role of the leading market players involved in the industry including their corporate overview, financial summary, and SWOT analysis.
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Report Overview: Network Transformation Market
The global network transformation market size was valued at USD 11.80 billion in 2020 and looks set to grow at a compound annual growth rate (CAGR) of 30.6% from 2021 to 2027. The market is likely to witness traction, owing to the collaboration among market players for the promotion and development of next-generation networking solutions. Furthermore, the increasing adoption of IT as a Service (ITaaS), Bring Your own Device (BYOD) policy, and network virtualization will contribute to the growth. Moreover, the increasing bandwidth requirement and the rising need for the enhancement of present networking solutions is further anticipated to propel the growth.
The network transformation rebuilds the network architecture based on data center-centric Information and Communication Technology (ICT) infrastructure, where information is stored, managed, and exchanged as well as business transactions and service processing are done in data centers. It offers a platform for businesses to modernize their infrastructure when it comes to information technology. It allows users to support cloud-controlled environment and helps in carrying huge amounts of data in more effective and cost-efficient manner compared to traditional processes. Such transformation of data allows users to exchange information by using small amount of energy and provides faster data processing.
Lack of expertise and skills in the development of next-generation networking solutions is expected to be the key restraining factor for the market growth. There is a growing need to employ skilled talent that can use innovative technologies such as Internet of Things (IoT) and analytics to push the growth of the market. Presently, there is a lack of skilled solution development professionals such as data analysts and data scientists. However, the companies are undertaking partnerships and engaging in mergers and acquisitions with small companies working in this field to overcome the shortage of skilled professionals.
Furthermore, integration of advanced technologies such as machine learning, Artificial Intelligence (AI), and big data with network transformation solutions is expected to provide lucrative opportunities for growth. The solution providers are concentrating more on current technological trends to enhance their software designs as per the client requirements. Several companies are investing in R&D activities to provide solutions that are easy to deploy, understand, and offer improved efficiency for the clients. Furthermore, government initiatives to augment the implementation of digital technologies, internet connectivity, and mobile applications to lower manual efforts in a bid to improve the productivity of organizations, are likely to fuel the market growth.
Network transformation solutions provide affluence in operating a communication network. It enables a telecom operator to decrease the network complexity and lessen the overall management cost. Cloud service providers, telecommunication service providers, and enterprises are biggest beneficiaries of this as in telecommunication sector, there is huge margin pressure on service providers, owing to the varying needs of consumers such as usages of OTT services and data consumption. Conventional networks of service providers are not capable to handle this demand from consumers and hence they are reconfiguring their network with the help of network transformation solutions, to manage the challenges of increasing the Average Revenue Per User (ARPU) and traffic explosion. All these factors are remarkably contributing to market growth.
The COVID-19 virus outbreak has affected many countries all around the world and many companies have had to put their remote working plans in place. Companies having highly distributed workforce had to place in flexible working policies such as work from home, flexible working hours, BYOD, and virtual collaboration environments. However, as technologies of today can be readily deployed on the cloud and introduced to users with nominal training. The companies will see transformation because of this outbreak as they plan on collaboration technologies and flexible work policies. On the other hand, the telecommunication sector has been focusing on increasing network resiliency and reliability for the consumers, for quite some time, which has been impacted due to the COVID-19 outbreak. This has subsequently created challenges in the deployment of physical infrastructure particularly in 5G.
Solution Insights: Network Transformation Market
The SDN and NFV solutions led the network transformation market and accounted for more than a 45% share of the revenue share in 2019. Software Defined Networking (SDN) changes the Wide Area Network (WAN) design by decoupling the data planes and control, extracting applications from the original network infrastructure, and centralized network intelligence. By deploying SDN and NFV data centers, the telecom operators can get enhanced network programmability, control, and automation over their network. Furthermore, SDN and NFV enhance the flexibility and scalability of WAN, which further advances the network availability and performance. All these factors are increasing the adoption of the solutions and boosting the market growth.
The 5G networks segment is expected to emerge as the fastest growing segment over the forecast period as it is one of the core elements of network transformation. Currently, in most parts of the world, the 5G networks are in testing and development phase. The path towards 5G comprises the mutual motive to support numerous access networks that are apparent to end-users. Furthermore, the major driving factor is the rising adoption of virtual networking environments in telecommunications and rise in mobile data traffic which increasing the adoption of 5G networks.
Service Insights: Network Transformation Market
The professional service segment led the market and accounted for over 60% share of the global service revenue in 2019. Professional services help organizations across many verticals to efficiently improve performance and enhance agility of their networks. Professional services help businesses to create a highly secure and better network environment that helps the enterprise growth vision while encompassing the convergence of voice, data systems, and traffic. These services are elementary and the most integral aspect of executing network transformation solutions to enhance network technologies. While deploying networking solutions & services, industry and regulatory compliances set by organization and regulatory bodies are considered and provisioned by vendors.
The managed service segment is expected to witness remarkable growth over the forecast period 2021-2027. Factors that drive the growth of managed services are lack of availability of skilled professionals and budget constraints to push enterprises to leverage managed services. The rising focus on cloud deployment, rise in the automation in IT environments, and continuous increase in the demand for managed services among SMEs are expected to create a pool of opportunities for managed services vendors. Moreover, increasing security breaches coupled with applications in conducting the IT functions by getting control over the IT infrastructure and networks of enterprises is expected to positively influence the growth. Furthermore, the long-term managed service collaborations provide significant strategic benefits such as cost reduction.
Enterprise Size Insights: Network Transformation Market
The large enterprise segment led the market and accounted for approximately 60% revenue share in 2019. The increasing number of adversities such as cyber-attacks due to old network infrastructure could lead to a vast amount of data loss that can potentially impact the large enterprises. Hence, large enterprises are heavily investing in adopting several measures to safeguard their technologies, products, and capital. Network transformation requires huge capital investment for full-scale deployment and large enterprises can afford the deployment of such solutions.
The Small and Medium Enterprise (SME) segment is expected to expand at the highest CAGR over the forecast period. The number of SMEs functioning in emerging economies such as India, China, and Japan are increasing. These SMEs are gradually implementing network transformation solutions and services to enhance their business capabilities as they offer data scalability and security. Further, the increasing government initiatives intended at encouraging and promoting SMEs and various digital SME campaigns across the world are expected to further drive the growth of this segment.
End-use Insights: Network Transformation Market
The IT and telecom segment led the market and accounted for nearly 25% revenue share in 2019. The IT and telecom segment is growing owing to the integration of latest technologies such as big data and machine learning and implementation of latest networking infrastructure by the organizations. Network transformation solutions are widely used in the industry for the purpose of handling Wide Area Network (WAN) circuit trouble tickets and connectivity equipment, and enhancing site bandwidth, connectivity, and traffic utilization. Furthermore, the IT & telecom industry is in the increasing need for data center functions to integrate with business operations for boosting operational efficiency, which is anticipated to bode well for the market growth.
The market adoption in the manufacturing sector is witnessing rapid growth as the production lines are being continuously automated to enhance overall efficiency. This has triggered the need for seamless wireless communication among the actuators, robots, sensors, and other devices installed in manufacturing facilities. As a result, the manufacturing segment is expected to witness significant growth over the forecast period. Moreover, the healthcare industry is expected to witness significant adoption of the network transformation solutions and services to provide enhanced healthcare emergency and telemedicine services.
Regional Insights: Network Transformation Market
North America dominated the market and accounted for over 30% revenue share in 2019, owing to the increasing acceptance of smart connected devices and Internet of Everything (IoE). The U.S. is an early adopter of innovative technologies. Companies in the country have implemented new technology solutions for improving the flexibility and manageability required for adding new network capacity and capabilities. Moreover, increased grants and budgets have encouraged various leading players in the region to make significant investments. The market has seen massive applications across numerous verticals in the U.S. For instance, a U.S.-based global media company, UBM Tech has deployed network transformation solutions to enhance the flexibility and manageability of its networking atmosphere for its flagship trade show, Interop ITX.
Asia Pacific is estimated to witness substantial growth over the forecast period. The rapid adoption of new technologies and the development of IT infrastructure, along with improved investments in R&D projects are the factors expected to drive growth in the region. The implementation of cloud-based solutions and growing investments in data security among numerous companies in the region is expected to contribute to market growth. Moreover, the increasing investments in SMEs by emerging economies such as India and China are expected to further propel the market growth.
Key Companies & Market Share Insights: Network Transformation Market
The market is highly fragmented, and several players hold a significant market share. Key industry participants include NEC Corporation; IBM, Juniper Networks Inc.; Fujitsu; and Cisco Systems, Inc. Companies are stressing on inorganic growth strategies to develop technologically advanced products to gain a competitive edge.
Companies are engaging in partnerships, mergers, and acquisitions, aiming to strengthen their product portfolio, manufacturing capacities, and provide competitive differentiation. For instance, in February 2018, NEC Corporation declared that Vodafone Group has selected NEC Corporation/Netcracker”s Hybrid Operations Management (HOM) solution to help its transformation into a telecommunications cloud provider. The virtualization program emphasized the use of cloud native, SDN/NFV technologies to develop operational, business systems, and processes. NEC/Netcracker”s HOM aimed at supporting this initiative by organizing and managing end-to-end services and resources within Vodafone fields. Vodafone Group is a telecommunications company and offers a range of services including messaging, voice, data, and fixed communications. Some of the prominent players in the network transformation market include:
Key companies Profiled: Network Transformation Market Report
- NEC Corporation
- IBM Corporation
- Juniper Networks Inc.
- Fujitsu; Cisco Systems, Inc.
- Dell EMC
- Intel Corporation
This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Trusted Business Insights has segmented the global network transformation market report based on solution, service, enterprise size, end use, and region:
Solution Outlook (Revenue, USD Million; 2016 – 2027)
- 5G Networks
- Network Automation
- SDN & NFV
Service Outlook (Revenue, USD Million; 2016 – 2027)
- Professional Service
- Managed Service
Enterprise Size Outlook (Revenue, USD Million; 2016 – 2027)
- Large Enterprise
- Small & Medium Enterprise
End Use Outlook (Revenue, USD Million; 2016 – 2027)
- Energy & Utility
- IT & Telecom
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