US Network Function Virtualization Size & Share Analysis - Growth Trends and Forecast (2026 - 2035)
US Network Function Virtualization Market: by Type (Software, Hardware, Services), Application (Virtual Appliances, Core Networks, Edge Networks, Data Centers, Test & Measurement, Others), Distribution Channels (Direct, Indirect, Distributors, System Integrators, Online, Others), Technology (SDN, VNF, MANO, NFVI, Orchestration, Others), Organization Size (Small, Medium, Large) and By US Historical & Forecast Period (2020-2035) Comprehensive Study 2025
Last Updated: 13-09-2025 | Format: PDF | Report ID:21205 | Author: Clara
US Network Function Virtualization Market: Industry Overview, Share, Growth, and Trends Forecast, 2025-2035
Network Function Virtualization (NFV) transforms the way network operators architect networks by decoupling network functions from proprietary hardware and running them in software. This innovative approach facilitates agility, lowers operational costs, and accelerates the deployment of new services. In the US, the NFV market is seeing robust growth driven by the expanding adoption of 5G, edge networks, and cloud-native architectures. Core concepts include virtual network functions (VNFs), software-defined networking (SDN), network orchestration, and NFV infrastructure (NFVI), all managed through advanced automation tools. The shift allows telecom providers and enterprise organizations to scale networks efficiently and respond quickly to demanding workloads, supporting the evolution of digital services. Key explanations involve the virtualization of routers, firewalls, load balancers, and other critical network devices—streamlining operations, enhancing security, and reducing dependencies on physical hardware.
Latest Market Dynamics
Key Drivers
Accelerated 5G network rollouts: With US telecom giants like Verizon expanding 5G coverage, NFV becomes critical for meeting agility and scaling demands.
Surging cloud-native transformation: Enterprises increasingly adopt virtualized networking to support remote work and advanced IoT deployment. Cisco’s recent NFV solutions enable seamless migration to cloud environments.
Key Trends
Edge computing integration: Companies like VMware are embedding NFV at the edge, enabling ultra-low latency applications and distributed network control.
Intent-based networking: IBM has launched intent-based automation in NFV, letting networks adapt dynamically to application needs while ensuring compliance and security.
Key Opportunities
Artificial Intelligence (AI) in network management: AI-powered NFV, driven by initiatives from platforms such as Juniper Networks, streamlines operations and mitigates manual workload.
Expansion of open-source frameworks: The open-source MANO (Management & Orchestration) stack, led by contributions from Nokia, creates opportunities to develop interoperable solutions for diverse industries.
Key Challenges
Integration with existing legacy infrastructures: Players like Dell face hurdles in ensuring seamless migration from legacy to virtualized platforms without service disruptions.
Cybersecurity risks: As highlighted by HPE, virtualized environments increase the attack surface, demanding robust, complex security frameworks to mitigate threats.
Key Restraints
High initial capital investment: Startups and mid-sized organizations may hesitate to adopt NFV due to upfront costs, as reported in recent HCL Technologies surveys.
Skillset and expertise shortages: The scarcity of skilled NFV professionals continues to constrain widespread implementation, as shown in Fujitsu’s 2025 workforce analytics.
US Network Function Virtualization Market Share by Type, 2025
Software dominates the US NFV market by type in 2025, capturing 55% of the share, reflecting the rapid pivot of enterprises and telecoms towards software-defined network components. Hardware holds a 28% share, primarily for supporting core infrastructure upgrades and network appliance modernization. Services contribute 17%, driven by the need for consulting, integration, and managed support. This distribution emphasizes the market’s progression to software-centric models powered by cloud and orchestration innovation, while hardware and specialized services provide critical backbone and tailored support.
US Network Function Virtualization Market Share by Applications, 2025
Data centers lead the applications segment of NFV in the US for 2025, accounting for 38% market share, establishing themselves as the backbone of virtualization owing to high-density workloads and cloud integration. Core networks hold a 29% share, reflecting investments in modernizing backbone communications for better scalability and performance. Edge networks make up 18%, driven by the deployment of new 5G and IoT-enabled infrastructures. Virtual appliances and test & measurement round out the remainder, showcasing how NFV adoption is reshaping traditional and emerging network functions to support a hyper-connected economy.
US Network Function Virtualization Market Revenue (USD Million), 2020-2035
The US NFV market is projected to grow strongly from $4,800 Million in 2020 to $14,900 Million by 2035. Annual revenue demonstrates a steady upward trend due to the proliferation of 5G, burgeoning edge applications, and mainstream digital transformation initiatives across sectors. Growth accelerates post-2025 as enterprises ramp up investments in cloud-native platforms and orchestration tools, with notable mid-to-late decade surges reflecting further telecom adoption and the introduction of AI-driven network automation solutions.
US Network Function Virtualization Market YOY (%), 2020-2035
Year-over-year (YOY) growth for the US NFV market averaged 8.4% between 2020 and 2025, accelerating to over 9.5% between 2025 and 2030. A significant uptick is observed post-2026 as enterprises and telecom operators align with digitalization and hyper-automation trends. While growth rates moderate slightly in the early 2030s, the market retains a robust expansion trajectory, demonstrating sustained investment optimism and ongoing network evolution spurred by new applications and regulatory support.
US Network Function Virtualization Market Share by Regions, 2025
In 2025, the Western US region secures a dominant 45% share of the national NFV market, attributed to early digital adoption across technology hubs like California and Washington. The South follows closely with 27%, driven by expanding cloud activity and telecom deployments in Texas and Georgia. Midwest and Northeast comprise 17% and 11% respectively, underscoring steady but comparatively moderate adoption patterns, with the Northeast benefiting from robust financial, healthcare, and enterprise IT investments.
US Network Function Virtualization Market Players Share, 2025
Major players in the US NFV market see Cisco Systems, Inc. leading with a 21% market share, leveraging a broad portfolio in virtualization and orchestration. Ericsson AB and Nokia Corporation hold 15% and 13% shares respectively, benefitting from robust relationships with key telecom operators. VMware, Inc., Juniper Networks, and IBM each secure shares between 8-11%, highlighting competitive diversity, strong R&D, and expansive software portfolios. The remaining market is distributed among specialized vendors and emerging disruptors contributing innovative NFV solutions.
US Network Function Virtualization Market Buyers Share, 2025
Large enterprises are the largest buyers in the US NFV market in 2025, holding a 53% share, as they upscale and automate sprawling network infrastructures. Medium-sized organizations make up 31%, leveraging NFV to enhance agility and cut operating costs. Small businesses account for the remaining 16%, reflecting gradual entry as solutions become more accessible and cost-effective. This distribution highlights the NFV value proposition across different organization sizes and the growing democratization of virtualization technologies.
Study Coverage
Metrics
Details
Years
2020-2035
Base Year
2025
Market Size
7600
Regions
US (West, South, Midwest, Northeast)
Segments
By Type (Software, Hardware, Services, Open Source, Proprietary, Hybrid), By Application (Virtual Appliances, Core Networks, Edge Networks, Data Centers, Test & Measurement, Others)
June 2024: VMware partners with AT&T to expand NFV at the edge, targeting enhanced 5G and IoT use cases.
July 2024: Cisco unveils a new AI-powered NFV orchestration suite, boosting automation for hybrid cloud networks.
August 2024: Ericsson collaborates with T-Mobile on advanced NFV-based 5G core deployments in major urban centers.
September 2024: Juniper Networks launches AI-driven network health analytics for NFV, furthering predictive management capabilities.
October 2024: Nokia releases open-source compliant MANO solutions, designed to enhance interoperability for multi-vendor NFV environments.
Frequently Asked Questions
About the Author
Clara
Senior Market Research Analyst
Clara is a Senior Market Research Analyst specializing in market research, industry analysis, and business consulting across Telecommunication. Clara brings a commercially grounded perspective to sectors shaped by changing demand, innovation, and competitive dynamics, helping turn complex market trends into clear strategic insights for business decision-makers. With 10+ years of experience across research, analytics, and strategic advisory roles, Clara has helped organizations translate data into actionable growth strategies.
