According to the report, the SDN market is driven primarily by the need for efficient infrastructure and mobility, as well as the increasing demand for cloud services. "Nowadays, many organizations are storing, computing and networking through cloud-based infrastructure. They are doing this for more agility, flexibility, manageability and programmability in their network infrastructure," the firm said in a prepared statement.
The report breaks out four categories of SDN technologies: SDN switching, SDN controllers, cloud provisioning and orchestration, and security and services.
Cloud provisioning and orchestration dominates the global SDN market and also is expected to be the fastest growing area as it helps to design, optimize, secure and monitor the network, according to the research firm. SDN switching had the second largest revenue share of the SDN market in 2012. The firm forecasts an overall compound annual growth rate for the SDN market of 61.5% from 2012 to 2018.
According to the report, enterprises accounted for more than 35% of end users in the SDN market in 2012 due to their growing need for agility, cost efficiency and flexibility in network infrastructure. In the coming years, cloud service providers will be the fastest growing segment of end users, the report predicts.
Leading vendors in the SDN market includes Cisco, IBM, NEC, and Juniper Networks, the firm said.
In an email interview with Network Computing, PricewaterhouseCoopers Principal Aritomo Shinozaki said software-defined networking remains in its infancy, and that demand tends to be generated by organizations with "innovative use cases" and interest at the incubation or proof-of-concept level.
"The big promise driving the market today is a combination of more consolidated, accurate and real-time control, change and visibility to the architecture of the network and the potential for virtualizing a broad range of network functionality," he said.
[Read about how SDN is a set of use cases that uses many technologies to meet customer needs in"SDN Is Not A Technology, It's A Use Case."]
"SDN in theory would give a service provider or the enterprise the ability to free the structure and function of the virtual network completely from the underlying physical infrastructure," he added. "Given that 'rapidity of change,' 'agility to adapt' and 'ability to scale' are the buzz words of the modern digital-driven enterprise, most people recognize that traditional networking paradigms are too static and require a lot of effort to physically change and laboriously configure and validate the network."
Shinozaki added that the forces are in place to drive the technology into meaningful use in the next five years. But while the benefits are real, the ecosystem and applications to drive the benefits are nascent, he said. Right now, some companies are applying a lot of their own R&D to exploit available SDN technologies, he said.
"This is not the situation with the majority of potential customers and users. But with every major network equipment and virtualization technology vendor having offerings in SDN already, five years to make a meaningful dent in traditional network architecture products may be conservative," Shinozaki said.
Also, SDN technology may increasingly be found as an element of every new network equipment product introduced in the future, even if the equipment is largely a traditional router or switch, he added.
[Software-defined networking and increasing automation are changing the roles of network and IT professionals. Don't miss a lively discussion of this topic in "Will SDN Make Me Homeless?" at Interop New York Sept. 30-Oct. 4. Register today! ]