The global sales of cloud-native network function is estimated to be worth USD 16,564.1 million in 2024 and is anticipated to reach a value of USD 74,341.0 million by 2034. Sales are projected to rise at a CAGR of 16.2% over the forecast period between 2024 and 2034. The revenue generated by cloud-native network function in 2023 was USD 14,254.8 million. The industry is anticipated to exhibit a Y-o-Y growth of 15.9% in 2024.
South Asia and Pacific, East Asia, and North America are set to present significant growth opportunities for the market. 5G technology demands high scalability, flexibility, and active resource provision, which cloud-native network function provide efficiently, which surges the overall growth of the market.
| Attributes | Key Insights |
|---|---|
| Estimated Cloud-Native Network Function (CNF) Market Size (2024E) | USD 16,564.1 million |
| Projected Cloud-Native Network Function (CNF) Market Size (2034F) | USD 74,341.0 million |
| Value-based CAGR (2024 to 2034) | 16.2% |
Cloud-native technologies and principles such as containers, orchestration platforms like Kubernetes, and microservices provided by cloud-native network functions, are intended for cloud infrastructures in contrast to conventional network functions that require dedicated virtual machines or hardware.
Owing to its modular, loosely linked architecture, cloud-native network functions enable more effective network function development, deployment, and management, driving the cloud-native network function market growth.
Adopting CNFs signifies a major shift for businesses in the direction of more responsive and flexible network operations. The ability to provide new network services more quickly and with greater agility is one of the main advantages driving the cloud-native network function market growth.
Service rollouts may be delayed by the intricate and time-consuming deployment procedures associated with traditional network operations. On the other hand, CNFs can be quickly deployed due to their automated orchestration and container-based architecture, which enables businesses to launch new features and services more quickly.
Moreover, containerization and orchestration enhance agility and flexibility in CNF development and deployment. Developers can iterate faster, deploying updates more frequently through continuous integration and continuous delivery/continuous deployment (CI/CD) pipelines, which decrease time-to-market for new network services and features.
With cloud-native network functions (CNFs) becoming distributed and vulnerable to cyber threats, security and compliance are essential factors to take into account while deploying these functions. Sophisticated security measures are essential to safeguard confidential information and maintain operational integrity in CNFs' dynamic and frequently multi-tenant environments.
The use of zero-trust networking in CNFs to protect internal communications is growing. It is predicated on the idea that threats could come from both inside and beyond the network perimeter, necessitating rigorous authorization and identity verification for every individual and device trying to access resources.
By limiting access to CNFs to authorized entities, technologies such as mutual TLS (mTLS) encryption and authentication protocols reduce the risks of data breaches and unauthorized access.
Moreover, the ability to detect and mitigate security risks in real-time depends on ongoing monitoring and incident response capabilities. Automated monitoring systems can offer insight into CNF environments, quickly identifying unusual activity and possible security breaches. When operators have a clear incident response plan in place, they may reduce the effects of security incidents and preserve the availability and integrity of their services.
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Increased Adoption of 5G is an Emerging Trend
The implementation of 5G networks will need to modify the way network services are deployed and managed. 5G offers greater capacity, reduced latency, faster speeds, and simultaneous connections to multiple devices in comparison to earlier generations.
Cloud-native architectures are necessary components for flexible and scalable network management approaches needed in this complex and dynamic environment. The highly adaptive nature of containerization and microservices-based cloud-native network functions (CNFs) guarantees that the network can effectively manage varying demands and a wide range of service requirements.
The scalability needed for 5G networks is largely dependent on CNFs. To adapt to changing traffic loads, 5G's architecture requires a network that can scale up or down quickly. CNFs, for example, can dynamically deploy extra resources to preserve service quality and performance during peak usage periods or in high-device-density locations.
On the other hand, resources can be reduced during times of low demand, cutting expenses and maximizing the use of infrastructure. For applications like driverless cars, smart cities, and large-scale IoT deployments, in particular, this elasticity is essential to sustaining the high performance and dependability that consumers seek from 5G services.
Significant Demand for Low Latency Applications Driving the Cloud-Native Network Function Market Growth
Demand for edge computing and low latency solutions has been significantly impacted by the increase in applications that require low latency, such as AR/VR technologies, IoT devices, and real-time analytics.
These applications necessitate rapid data processing and immediate response times to function effectively. For instance, IoT devices frequently perform crucial functions in autonomous cars or smart healthcare systems, where even a few milliseconds of latency can lead to severe implications.
Similarly, ultra-low latency is essential for immersive and smooth experiences in AR/VR applications, which are being adopted majorly in training, gaming, and remote support. To meet these significant latency requirements, edge computing brings computation closer to the data source, shortening the distance that data must travel and thereby reducing latency.
Cloud-native network functions (CNFs) are instrumental in enabling these low latency solutions. By leveraging containerization and microservices, CNFs can be deployed flexibly and efficiently at the network edge. This proximity to end-users ensures that data processing happens near the source, drastically cutting down on latency.
Furthermore, CNFs offer scalability and dynamic resource allocation, which are essential for handling the variable and often unpredictable loads typical of real-time applications. This functionality ensures that applications maintain beneficial performance and reliability even during peak usage periods.
As a result, the utilization of CNFs in edge computing settings is critical for meeting the growing need for low-latency applications, spurring innovation, and improving user experiences across all sectors.
Expanding Markets in Developing Regions are creating Significant Opportunities for CNF Solutions
As their economies and populations expand, developing regions globally are adopting more sophisticated network technologies. Improving digital services, modernizing infrastructure, and boosting connections are the main factors driving its adoption. With their scalable, adaptable, and reasonably priced solutions, cloud-native network functions (CNFs) are essential to this shift because they can meet the particular needs and problems of these areas.
The rapid expansion of internet and mobile connectivity is a major factor driving the adoption of CNF solutions in developing regions. The need for dependable and high-performing network services is growing as more people acquire smartphones and other internet-enabled gadgets.
By enabling telecom operators and service providers to build and operate network functions more effectively, CNFs help underserved areas receive better coverage and higher-quality services.
Furthermore, traditional constraints including expensive deployment and limited infrastructure are overcome with the aid of CNF solutions. Operators can maximize resource utilization, lower operating costs, and scale services in response to variations in demand by utilizing cloud-native designs.
This scalability is especially useful in dynamic environments where population increase and rapid urbanization are driving the demand for resilient and flexible network infrastructures.
Security Concerns in CNFs may Restrict Cloud-Native Network Function Industry Growth
Despite significant advancements in security measures, the distributed nature of cloud-native network functions (CNFs) introduces unique challenges and vulnerabilities that require careful management. CNFs operate across diverse environments and utilize containerization and microservices, which can increase the attack surface compared to traditional monolithic architectures.
This distributed nature means that security controls must be robustly implemented at every layer; from the orchestration platform managing containers to the communication between microservices.
Potential container-specific vulnerabilities such as misconfigurations, insecure APIs, or vulnerabilities in shared resources are among the main causes for concern. Attackers may use these flaws to interfere with operations, alter services, or obtain unauthorized access.
Furthermore, maintaining constant security monitoring and compliance with security regulations is made more difficult by the dynamic nature of CNFs, where containers are frequently spun up or down based on demand. Tight access controls, encryption of critical data, frequent vulnerability assessments, and proactive monitoring to quickly identify and address threats are therefore essential components of good security policies for CNFs.
The global cloud-native network function industry recorded a CAGR of 15.4% during the historical period between 2019 and 2023. The growth of the cloud-native network function industry was positive as it reached a value of USD 14,254.8 million in 2023 from USD 7,818.7 million in 2019.
The need for flexible and adaptable network infrastructure, the expansion of 5G networks, and the increasing acceptance of cloud technologies propelled the growth of the market for cloud-native network services in 2019. The early adopters of microservices and containerization were mostly technology-orientated sectors and forward-thinking telecom operators.
To create the foundation for broader adoption, during this period the focus was on comprehending and putting into practice CNF fundamental technologies like Docker for containerization and Kubernetes for orchestration.
The COVID-19 virus outbreak in 2020 played a crucial role in fueling cloud-native network function industry growth as businesses and telecom operators faced unprecedented demand for consistent and scalable network services to support remote work, online education, and digital entertainment.
The increased reliance on cloud services owing to the shift towards digital transformation pushed many organizations to invest in CNFs to ensure operational continuity and enhance their network capabilities. Consequently, the industry saw a marked increase in deployments and investments, with many pilot projects moving into full-scale production environments.
Post pandemic, the industry experienced high demand, owing to the widespread adoption of edge computing solutions, driven by the need for low latency and real-time processing. With the ability to provide the required performance and agility, CNFs are being quickly implemented at the network edge to support applications like industrial IoT, autonomous cars, and smart cities.
Furthermore, as enterprises looked to ensure flexibility and resilience across a range of cloud environments, the emergence of multi-cloud and hybrid cloud solutions boosted the use of CNF.
Principal Consultant
In the global cloud-native network function industry, Tier 1 CNF solution providers gain prominent market share of 45% to 50%, making them the market leaders. These market leaders are characterized by their extensive global reach and strong consumer base.
These market players engaged in retaining their key position in the market by consistently upgrading their solutions. Prominent companies within Tier 1 include Cisco Systems, Inc., Huawei Technologies Co., Ltd., Amazon Web Services, Inc., IBM Corporation, and Dell Inc.
Tier 2 players are mid-sized businesses that may not have wide global reach as compared to tier 1 market players but they have established themselves as major market players in the local markets.
These businesses focus on strategic partnerships with technology providers to optimize their R&D costs and distributors to enhance their brand representation. Prominent companies in tier 2 include F5, Inc., Broadcom, ZTE Corporation, Juniper Networks, Inc., and Telefonaktiebolaget LM Ericsson.
Tier 3 businesses include small enterprises and startups that are emerging in the cloud-native network function market. These companies mainly develop the software as per the local market needs and may not have extensive distribution networks as compared to other Tiers. These companies target end-users companies who are seeking innovative and cost-effective cloud-native network functions.
The section below covers the industry analysis for the industry for different countries. Industry demand analysis on key countries in several regions of the globe, including the United States, China, and the United Kingdom is provided. The United States is anticipated to remain at the forefront in North America, with a value share of 80.2% through 2034.
| Countries | Value CAGR (2024 to 2034) |
|---|---|
| The United States | 14.1% |
| China | 15.8% |
| The United Kingdom | 13.5% |
North America, spearheaded by the United States currently holds around 80.2% share of the North America cloud-native network function industry. The United States market is anticipated to grow at a CAGR of 14.1% throughout the forecast period.
The market in the United States is witnessing remarkable growth, driven by rapid 5G network deployment across the country. The United States telecom operators are using CNFs to deploy cutting-edge network features like network slicing, which enables them to customize network resources and performance for certain applications and services, improving user experience and operational effectiveness.
Moreover, the increasing adoption of edge computing is fueling the growth of the cloud-native network function market. As applications requiring low latency, such as autonomous vehicles, industrial IoT, and smart cities become more widespread, the need for data processing intensifies.
CNFs enable the network functions deployment at the network edge, reducing latency and improving performance for critical applications. This is mainly relevant in the United States where the push towards smart infrastructure and IoT is robust, supported by substantial investments from both the public and private sectors.
The United Kingdom's cloud-native network function market is poised to exhibit a CAGR of 13.5% between 2024 and 2034. Currently, it holds a significant market share in the Western Europe market, and the trend is expected to continue through the forecast period.
In the United Kingdom, various sectors are being significantly influenced by digital transformation as companies are moving to cloud-based solutions to increase agility, lower operating costs, and boost digital capabilities. This change is brought about by the need to maintain competitiveness in an industry that is changing quickly and where customers are expecting more and more individualized, quick, and efficient service.
Businesses may accelerate the release of new services, scale operations in response to demand, and swiftly adjust to changes by migrating to the cloud. As essential components of contemporary cloud environments, flexible, scalable, and effective network management solutions are provided by cloud-native network functions (CNFs), which are vital in this transition.
China’s cloud-native network function market is anticipated to register a CAGR of 15.8% from 2024 to 2034. The country is expected to grow at a notable pace and hold its major share in East Asia through 2034.
Government support and policies are critical driving factors for the growth of the cloud-native network functions industry in China. The strategic initiatives of the Chinese government, such as the 'New Infrastructure' strategy, emphasize how crucial it is to construct reliable digital infrastructure, such as 5G networks, data centers, and the industrial internet.
With significant expenditures and legislative incentives that promote quick digital transformation, this policy framework aims to establish China as a leader in the global digital economy.
The government ensures that the required resources and regulatory assistance are available to encourage the widespread deployment of CNFs by giving priority to the development of these critical technologies. To achieve the efficiency, scalability, and flexibility needed to serve contemporary digital applications and services, these features are crucial.
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This section takes a closer look at the cloud-native network function market segmentation by deployment and end-user. Based on deployment, the public cloud CNF segment is leading with 35.1% of the global industry shares captured in 2024. Based on end-users, the telecom operator segment is leading with 29.8% of the global industry shares captured in 2024.
| Deployment | Public Cloud CNF |
|---|---|
| Value Share (2024) | 35.1% |
Public Cloud CNF segment is expected to acquire a share of 35.1% in the cloud-native network function market in terms of deployment in 2024. Public cloud environments offer unparalleled scalability and flexibility, which are crucial for businesses looking to deploy CNFs. Unlike traditional network functions that require substantial physical infrastructure, CNFs can be dynamically scaled up or down in the cloud based on demand.
This capability is particularly valuable for businesses experiencing variable traffic loads or seasonal peaks. Public cloud providers like AWS, Azure, and Google Cloud offer robust infrastructure that supports the elastic nature of CNFs, enabling organizations to efficiently manage resources and costs.
| Industry | Telecom Operators |
|---|---|
| Value Share (2024) | 29.8% |
The telecom operators’ segment is expected to capture a share of 29.8% in 2024. One of the primary factors driving telecom operators towards CNFs is the need for scalable and flexible network infrastructures. CNFs provide unmatched scalability because they are built with containerization and microservices to operate in cloud settings.
Operators can handle varying traffic levels and ensure effective use by dynamically allocating resources based on demand. Supporting the vast array of services needed in contemporary telecom contexts, including as 5G, high-speed internet, and the Internet of Things, depends on this adaptability.
Key players operating in the cloud-native network function market are investing in advanced technologies and also entering into partnerships. Key cloud-native network function providers have also been acquiring smaller players to grow their presence to further penetrate the market across multiple regions.
Industry Updates
In terms of type, the industry is divided into private cloud CNF, public cloud CNF, and hybrid cloud CNF.
In terms of enterprise size, the industry is divided into small & medium enterprises and large enterprises.
The industry is classified by industry as managed service provider (MSP), telecom operators, internet service provider (ISP), data center operator, enterprises/corporate, and others.
Key countries of North America, Latin America, East Asia, South Asia & Pacific, Western Europe, Eastern Europe, and Middle East & Africa (MEA) have been covered in the report.
The global cloud-native network function industry is projected to witness CAGR of 16.2% between 2024 and 2034.
The global cloud-native network function industry stood at USD 14,254.8 million in 2023.
The global cloud-native network function industry is anticipated to reach USD 74,341.0 million by 2034 end.
South Asia & Pacific is set to record the highest CAGR of 17.4% in the assessment period.
The key players operating in the global cloud-native network function industry include Cisco Systems, Inc., Huawei Technologies Co., Ltd., Amazon Web Services, Inc., IBM Corporation, and Dell Inc.
1. Executive Summary
2. End User Introduction, including Taxonomy and Market Definition
3. Market Trends and Success Factors, including Macro-economic Factors, Market Dynamics, and Recent End User Developments
4. Global Market Demand Analysis 2019 to 2023 and Forecast 2024 to 2034, including Historical Analysis and Future Projections
5. Pricing Analysis
6. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Type
6.1. Private Cloud CNF
6.2. Public Cloud CNF
6.3. Hybrid Cloud CNF
7. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, by Enterprise Size
7.1. Small & Medium Enterprises
7.2. Large Enterprises
8. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, by End User
8.1. Managed Service Provider (MSP)
8.2. Telecom Operators
8.3. Internet Service Provider (ISP)
8.4. Data Center Operator
8.5. Enterprises/Corporate
8.6. Others
9. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, by Region
9.1. North America
9.2. Latin America
9.3. Western Europe
9.4. Eastern Europe
9.5. East Asia
9.6. South Asia and Pacific
9.7. Middle East and Africa
10. North America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries
11. Latin America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries
12. Western Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries
13. Eastern Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries
14. East Asia Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries
15. South Asia & Pacific Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries
16. Middle East and Africa Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries
17. Sales Forecast 2024 to 2034 by Type, Enterprise Size, and End User for 30 Countries
18. Competition Outlook, including Market Structure Analysis, Company Share Analysis by Key Players, and Competition Dashboard
19. Company Profile
19.1. Cisco Systems, Inc.
19.2. Huawei Technologies Co., Ltd.
19.3. Amazon Web Services, Inc.
19.4. IBM Corporation
19.5. Dell Inc
19.6. F5, Inc.
19.7. Broadcom
19.8. ZTE Corporation
19.9. Juniper Networks, Inc.
19.10. Telefonaktiebolaget LM Ericsson
19.11. Mavenir
19.12. Tigera, Inc.
19.13. Kyndryl Inc.
19.14. Ribbon Communications Operating Company, Inc.
19.15. Nokia
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Cloud-Native Network Function (CNF) Market
