Service providers such as ISPs and mobile operators are rapidly embracing network virtualization. According to SNS Research, their investments into software-defined networking (and network functions virtualization) – two of the key building blocks of virtualization – are expected to grow at a 46 percent compound annual rate between 2016-2020. These additional dollars will be used to upgrade content delivery networks, customer premises equipment, and other critical infrastructures.
Network virtualization is gaining more attention
The TechTarget IT Priorities Survey found similar momentum in network virtualization among its 192 responses by network professionals.
49% of respondents reported that their IT budgets increased in 2017 by at least 10%. 49% of respondents reported an increase in their IT budgets year-over-year. This is a sign that organizations are moving away from legacy network infrastructures, which rely heavily upon specific hardware and firmware. We need to understand the components of virtualization, namely SDN or NFV, in order to see the impact of this transition.
SDN is the separation of control and forwarding planes within a network. This means that the network’s decisions are made by centralized software and not directly linked with the hardware.
NFV is a similar concept but it focuses on virtualizing network functions like firewalling, network address translation, and domain name services. These virtualized functions can run in software and be chained together to support a service-provider network without needing to navigate differences between different network appliances.
Three developments in network virtualization
Let’s take a look at the trends and facts that are being discussed so far this year for network virtualization.
Cisco Digital Network Architecture is a broad platform which integrates network virtualization and automation with security. Cisco announced several software and hardware updates to its platform in March 2017. These included a branch office NFV device (theEnterprise Net Compute System 5400 Series), as well as new security segmentation technology. Cisco DNA will remain an important source of network virtualization advancements.
VMware, a company synonymous with virtualization, bought Nicira, a SDN vendor, in 2014 for $1.3 billion. The company is on track to recoup its investment three years later. It expects $1 billion in revenue this year from its NSX platform. NSX was built on technologies developed at Nicira. According to IHS Markit, the market for network virtualization systems will grow significantly over the next few years, from $2.7 billion in 2015, to $15.5 billion by 2020. SDN and NFV also help to streamline corporate networks, allowing for greater productivity.

Optical networking is an essential component of today’s IP networks. We are looking for new technologies in this area to keep up with the demand for SDN/NFV as well as consumer-facing services like 4Kvideo and Social Media. In order to spread network virtualization, specific innovations like super-channeling in Dense Wavelength Division Multixing and hybrid Raman EDFA deployments on long haul networks will be key assets.
Are you ready for a career as a network virtualizer?
Network virtualization is a complicated beast that requires highly skilled IT professionals who are able to understand its benefits, tradeoffs, and technical requirements. Cisco certification is a great place to start due to its centrality to the SDN and NFV movements. Find a New Horizons Computer Center near to you and learn more about Cisco courses.