3 Network Virtualization Updates You Need to Know About for 2017

Network virtualization is rapidly becoming a priority for service providers such as mobile operators and home ISPs. According to a report from SNS Research, their investments in software-defined networking and network functions virtualization - the two building blocks of network virtualization - are expected to expand at a 46 percent compound annual growth rate between 2016 and 2020. These additional dollars will go toward upgrades to content delivery networks, customer premise equipment and other key infrastructures.

The rising profile of network virtualization

A separate study, the TechTarget IT Priorities Survey, found similar momentum for network virtualization among its 192 responses from network professionals:

  • Network upgrades were cited as the most important goal for 2017, with almost half (49 percent) of these respondents stating that their organizations would be purchasing new software and systems this year.
  • The top three technologies identified as major initiatives by survey takers were virtual private networks (36 percent of responses), management and monitoring of DNS/DHCP (also 36 percent) and network virtualization (33 percent).
  • IT budgets are growing, as 49 percent of respondents reported larger year-over-year budgets in 2017. More than one-fifth of those organizations saw budget increases of at least 10 percent, and much of this money will be spent on virtualization and cloud computing projects.

The overall trends within both the SNS Research and TechTarget reports confirm the long-term transition from legacy network infrastructures - which rely heavily on specific hardware and firmware - to virtualized alternatives. To see the impact of this transition, though, we need to break down what goes into a network virtualization - namely SDN and NFV.


SDN can be defined as the separation of the control and forwarding planes in a network. In practice, this means that the decisions of the network are executed by centralized software rather than programs directly intertwined with the networking hardware.


NFV is a similar concept, albeit one that refers specifically to the virtualization of network functions such as firewalling, network address translation and domain name services. These virtualized functions can be run in software instead of hardware and then chained together to support a service provider network, without having to navigate differences between specific, dedicated network appliances.

Network virtualization: 3 developments to watch

With these facts and trends in mind, let's look ahead at what is on the horizon for network virtualization this year:


Cisco Digital Network Architecture is a broad platform that integrates network virtualization, automation, security and much more under one umbrella. In March 2017, Cisco announced a variety of software and hardware updates to the platform, including a NFV device for branch offices (the Enterprise Network Compute System 5400 Series) as well as new security segmentation software. Cisco DNA will continue to be an important source for advancements in network virtualization.


VMware, which is synonymous with virtualization of all stripes, acquired SDN vendor Nicira in 2014 for $1.3 billion. Three years later, the company is well on its way to recouping that investment, as it is expecting $1 billion in revenue from its NSX platform this year. NSX was built upon technologies that originated at Nicira. Moreover, the overall market for network virtualization systems is expected to expand significantly in the coming years, rising from around $2.7 billion in 2015 to $15.5 billion by 2020, according to IHS Markit. Additionally, SDN and NFV help streamline corporate networks allowing for more productivity.



Optical networking is a vital component of today's IP networks, including the internet. Looking for technologies in this space to continue evolving to keep pace with the demand for SDN and NFV, as well as for consumer-facing services such as 4K video and social media. Specific innovations such as super-channeling in Dense Wavelength Division Multiplexing and hybrid Raman-EDFA deployments in long haul networks will be important assets in the spread of network virtualization.

Are you prepared for a career in network virtualization?

Network virtualization is a complex beast, and as such it demands highly capable IT professionals who understand its benefits, tradeoffs and technical requirements. A Cisco certification is a good place to start, given the vendor's centrality to the SDN, NFV and network virtualization movements. Learn more today by checking out our Cisco courses and finding a New Horizons Computer Center near you.

Mar 2017

By: Kayla Tellers