Cloud Packet Core revenue is projected to grow from $11 billion in 2022 to $16 billion in 2027

LONDON, March 7, 2023 /PRNewswire/ — The 5G Core Network (5GC) marks the first “G” that paves the way for CSPs to work exclusively at the software layer. Cloud-native EPC capabilities and 5GC are key drivers of new telecom value creation. With the continued adoption of cloud packet core networks, for the first time the industry is relying on the core network to introduce something beyond Enhanced Mobile Broadband (eMBB). Cloud package core sales will grow from $11 billion in 2022 to $16 billion in 2027, according to a new report from global technology intelligence firm ABI Research.

In a modular and increasingly disaggregated ecosystem characterized by “vertical” and “horizontal” openness, technology options for software, hardware and services that support the building of packet cores are for the expansion of BT, Orange, Telefónica and Vodafone, alongside other CSPs, fundamentally existing MBB business and explore new business opportunities. Global technology intelligence firm ABI Research forecasts that MBB core network application software will grow from US$4.8 billion in 2022 to US$6.6 billion in 2027 at a compound annual growth rate (CAGR) of 6 % will grow.

“Today, much of the traffic that flows through the packet core is handled through physical network elements. With a growing 5G subscriber base and continued adoption of 5GC, 4G traffic can be expected to shift to 5G networks,” said Don Alusha, 5G Core and Edge Networks Senior Analyst at ABI Research. “This means, in addition to a rapid spread of software-driven advances, that today’s classic model for selling packet core equipment is likely to take on a different structure tomorrow.” What makes this point clear is that hardware sales for packet -Core networks projected to reach $3.9 billion in 2027, no significant growth from the current market estimated at $3.5 billion in 2022 The imperative for vendors such as Cisco, HPE and Juniper among others is clear: away from a limited supply of integrated devices to models based on software, where the supply is essentially infinite.

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In addition, new values ​​are to be created in the area of ​​professional services. ABI Research forecasts that packet core services are expected to grow from $3 billion in 2022 to $5.2 billion in 2027 at a CAGR of 12%. “There is a growing market for services that help CSPs manage 5G rollouts driven by hardware and software separation, multi-vendor stacks and expanded business scope. In this order. In 3G and 4G, packet core services revolve around a vendor that integrates their own software and hardware to ensure function alignment, performance and lifecycle management,” says Alusha. But in the future, the industry structure will be horizontally stratified with Cloud Packet Core. Hence the vendor of the future must support CSPs in all aspects of the technology – from defining the network architecture to managing workloads to building applications that may be from different vendors.

The rules for buying and selling package cores are changing. How suppliers build products, grow sales, what services they offer, and what they do to thrive in an increasingly cloud-based ecosystem is on the table. “In the next few years companies like Cisco, HPE and Juniper will have to adopt a ‘do both’ model. They must execute the current product playbook and adopt a new software-based sales strategy that reflects the new economic realities. Alusha advises. Ultimately, suppliers need to help, not sell. Helping will sell, but selling will not help. Helping requires strong system integration and service capabilities. In addition, the market is becoming more complex and risky. Success will go to the fittest – not necessarily the biggest – because “greatness” is weakened by commercialization. Innovation in the process – how things are done internally – will be just as important as innovation in core packaged products that vendors sell,” concludes Alusha.

These findings come from ABI Research’s Network Cloud Infrastructure market data report. This report is part of the company’s 5G Core & Edge Networks Research Service which includes research, data and analyst insights. Based on extensive primary interviews, application analysis reports provide an in-depth analysis of key market trends and drivers for a given technology.

About ABI Research

ABI Research is a global technology intelligence firm providing actionable research and strategic guidance to technology leaders, innovators and decision makers around the world. Our research focuses on the transformative technologies that are dramatically transforming industries, economies, and the workforce today.

ABI Research provides breakthrough research and strategic advice to help clients understand rapidly changing technologies. Since 1990, we’ve partnered with hundreds of the world’s leading technology brands, innovative companies, forward-thinking government agencies and innovative trade groups. We help our clients achieve real business results.

For more information about ABI Research’s services, contact us at +1.516.624.2500 in Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia Pacific or visit www.abiresearch.com.

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Deborah Petra
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SOURCE ABI Research

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