The Network Virtualization Market in 2022

Network virtualization software allows companies to virtually discover and see network conditions, recreate network conditions, and improve network performance.

The physical network that is set up manually by a company can be managed and provisioned with network virtualization software. The technology is being embraced by companies, as 92% of them are using network virtualization, as of 2020.

See below to learn all about the network virtualization sector:

Network virtualization market

The network virtualization market value was valued at $18 billion in 2021 and is estimated to grow to $51 billion in 2027, with a compound annual growth rate (CAGR) of 23%, according to Market Data Forecast.

Several industries are driving growth in the network virtualization market: banking, finance services, and insurance (BFSI), manufacturing, retail, healthcare, education, and transportation.

Relatedly, 45% of businesses are planning or considering moving their servers to network virtualization architecture, and 25% of businesses are considering moving their storage to network virtualization, according to SpiceWorks.

There are multiple other operational and cost drivers of growth in the network virtualization space:

  • CAPEX and OPEX savings for enterprise
  • Growing demand for mobility
  • Growing demand for data center and server virtualization
  • Investment in 5G technology
  • Reduction in telecom carrier costs

Also learn about The Virtualization Market.

Network virtualization features

There are two key types of network virtualization:

External network virtualization: pulls in multiple local networks into a single network to improve efficiency.

Internal network virtualization: one network that emulates a physical network.


  • Switching
  • Routing
  • Load balancing
  • Distributes firewall
  • Context-aware micro-segmentation
  • Automation and cloud management

Benefits of network virtualization

Energy costs: Due to limited servers, energy is saved, on average 80%, according to VMware. “Virtualization enables the repurposing and decommissioning of some existing servers. According to the Uptime Institute, decommissioning a single 1U rack server can annually save $500 in energy, $500 in operating system licenses, and $1,500 in hardware maintenance costs,” according to EnergyStar.

Lower hardware costs: Reduce the number of servers in the network.

Disaster recovery: Virtualized hardware resources and data support disaster recovery (DR) plans, testing, and execution

Lower hardware costs: Reduce the number of servers in the network.

Agility and speed: Team members can access IT resources more quickly to improve the network.

Improved security: Catch and remove cyber threats, such as malware, making the network and related applications safer for use and less likely to cause issues.

Network virtualization use cases

Hepta Technologia e Informática has 300 VM’s, and they wanted better security, which they felt like they received with VMware NSX.

“VMware NSX is a network virtualization platform that follows the same model already used for server virtualization,” says Jorge Filho, virtualization analyst, Hepta Technologia e Informática.

Filho says the software has “tools that assist in troubleshooting, such as flow monitoring, packet capture, and traceflow in a graphical interface.”

Cisco Application-Centric Infrastructure (ACI) for software-defined networking (SDN) was implemented in a data center to “manage internal user traffic on the applications that are used and in turn separate external users with tenant,” says an engineer in the telecommunications industry at TrustRadius.

“The platform has a very high scalability and that makes network migrations easier for implementers,” they say.

Verizon CEO Lowell McAdam believed that virtualization would be able to save the company nearly $10 billion by 2021, according to an article at Fierce Telecom.

Verizon EVP and President of Global Operations John Stratton also called network virtualization a “very robust” opportunity, Fierce Telecom reports.

“We have a really, really strong technology team that has been engaged in finding ways to leverage the investments we make there, with an orientation towards virtualization of the network,” Stratton said.

Stratton said Verizon’s customers “still would like to have a very intuitive, simple, easy experience online,” which he believes network virtualization can help provide.

See examples of How Virtualization is Used by Nasdaq, Bowmicro, Nilkamal, Isala, University of Pisa, and AeC: Case Studies.

Network virtualization providers

These are some of the leading companies in the network virtualization market, and the software they provide:

  • VMware: VMware NSX
  • Red Hat: Red Hat Virtualization (RHV)
  • Microsoft Azure: Hyper-V Network Virtualization
  • Cisco: Cisco ACI
  • Anuta Networks: NFV Management & Orchestration (MANO)
  • Micro Focus: Micro Focus Network Virtualization
  • Nuage Networks: Virtualized Network Services (VNS)
  • Arista: VXLAN
  • Check Point: Network Function Virtualization (NFV)

Looking for a network virtualization product?: VMware: NSX Review

Emma Crockett
Emma Crockett
Emma Crockett is a writer for Enterprise Storage Forum and Datamation based in Nashville, Tennessee. She writes research-based articles about data science and data storage. When she is not writing, she is searching for the best lattes in Nashville and playing with her dog, Dante.


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