A year ago, networking looked very different. The COVID-19 pandemic caused enterprises to pivot hard toward deploying virtual network functions (VNF)—SD-WAN gateways, firewalls, VPNs and routers—to meet the rising need for fast and secure remote worker connectivity and quickly optimize hybrid multicloud networking to accelerate enterprise digital transformation. VNF devices also compensated for the hold and shortages on network hardware deliveries to businesses around the world during the pandemic.
Last year’s outlook for the trends driving virtual network services focused on the transition from an emerging virtual networking market to one that is coming into its own. IDC’s forecast of worldwide revenue for telecommunications network functions virtualization (NFV) software, including VNF devices, network functions virtualization infrastructure (NFVI), and cloud-native network functions (CNFs) shows an impressive compound annual growth rate of 30.9%, increasing from $7.5 billion in 2020 to just over $29 billion in 2025.[i]
This year’s trends outlook is all about how virtual network services are enabling the acceleration of digital transformation, hybrid multicloud adoption, automation, legislation and cost reduction.
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Trend #1: Virtual networking accelerates digital transformation
Virtual networking will deliver the agility for enterprises to accelerate digital transformation efforts, enabling them to quickly deploy when and where they need functionality without the overhead of personnel or CAPEX to deploy new hardware. As more enterprises adopt regional cloud presence, virtual networking will simplify the adoption of a distributed network architecture with multiple points of presence. These new architectures are foundational to an interconnected-oriented world where compute, data and users converge. The need for this agility was brought to the fore by the pandemic as enterprises needed to adapt to changing traffic patterns and will be a lasting lesson for disaster recovery planning.
Trend #2: Virtual networking advancements will drive hybrid multicloud growth
Many challenges involved in deploying hybrid multicloud architectures are mitigated when companies modernize and optimize their networking out to the edge with virtual networking. SD-WAN gateways and virtual cloud routers simplify cloud adjacency to data, access to multiple clouds and data exchange between clouds. Programmable network functionality makes it easier and faster to dynamically establish security perimeters, distribute cloud resources across data and applications, and establish business continuity and disaster recovery environments. For companies deploying these low-latency, software-defined networking environments, they also gain greater network performance for less cost when interconnecting with hybrid multicloud environments.
Trend #3: Automation will lead to greater optimization and security
Programmable virtual networks with standard APIs and programming tools such as Terraform open the door to greater network automation. This capability will accelerate the ability to deploy infrastructure and quickly adapt to changes. Automation in network and cloud security, such as with Secure Access Service Edge (SASE), will make it easier for companies to ensure that more complex network and hybrid multicloud environments are secure and aligned with other agile virtual network automation policies.
Trend #4: Legislation will catch up with regional virtual networking spread
Countries that have stringent regulations around data privacy and protection, such as the European Union General Data Protection Regulation (GDPR), or concerning communications equipment posing national threats, such as with the U.S.’s Secure and Trusted Communications Networks Act of 2019, could develop new legislation that will further regulate data sovereignty. Virtual networking makes it easy to adapt the network for data access at various edge locations.
Trend #5: The value of virtual networking will continue to rise
During the global pandemic, network agility was a critical element in keeping businesses up and running and adapting to traffic changes. This was further exacerbated as companies struggled to receive hardware on-site due to chip shortages from the global supply chain disruption. We see virtual networking providing business agility, improved time-to-market and lower complexity.
Moving toward a more virtual, automated digital infrastructure platform
At Equinix, we are evolving Platform Equinix® and its foundational digital infrastructure products and services to meet the agility, performance and cost requirements of our expanding global customer base. This includes future-proofing our global platform to provide digital leaders with the foundational infrastructure that powers their success at software speed. We will continue our legacy of offering a vendor-neutral platform that cultivates and grows our customers’ interaction with thriving ecosystems, which include vendors from every industry sector.
Network Edge services from Equinix provide a marketplace of NFVI solutions from multiple providers, helping enterprises modernize networking and deploy digital-ready infrastructure at the edge virtually, in minutes. Network Edge is integrated with Equinix Fabric™ to enable fast and dynamic access to multiple cloud service providers across virtual networks and deploy VNF devices such as cloud routers and firewalls. And over the next year, we will be expanding the number of markets that Network Edge is available in worldwide.
For more information on how you can modernize and optimize your network via virtualization services, read the Network Edge data sheet.
You can also sign up for a free trial of Network Edge.