Virtual Router Market - Forecasts from 2024 to 2029

The global virtual router market is evaluated at US$241.265 million for the year 2022 and is projected to grow at a CAGR of 24.65% to reach a market size of US$1,128.192 million by the year 2029.

Virtual routers are simply multiple distinct routers that are supported within one single router that allows service providers to configure multiple, separate, secure routers within a single frame. This functionality can be used to create separate routers for wholesale customers, corporate virtual private network (VPN) users, or users of a particular traffic type. Furthermore, the virtual router enables the host device which may be a computer of a server to operate as a typical router and have the abilities of a full-fledged router over a local area network (LAN). It is a software-based routing structure.

Moreover, it allows the end-user to avoid vendor lock-in as the individual using the virtual router does not need to depend on the vendor’s road maps. Further, it allows the user to upscale and downscale the network when needed. These modern systems can provide functionalities like traffic routing, and overlapping of IP addresses, and enable the solution to function as a general hardware-based network appliance. 

MARKET TRENDS:

The virtual routers market is expanding significantly due to several important considerations. For instance, the need for virtual routers is being driven by the growing popularity of software-defined networking (SDN) and network functions virtualization (NFV) technologies, which provide flexibility, scalability, and cost-effectiveness in comparison to conventional hardware-based routers.

The market is expanding due to the spread of Internet of Things (IoT) devices as well as the requirement for effective routing solutions to manage the increasing amount of data traffic. Virtual routers are becoming more popular as a result of the introduction of 5G networks and the rising need for fast, low-latency connections. These routers can effectively handle the growing network load and provide better performance.

MARKET DRIVERS:

Growth demand for private cloud operations is anticipated to drive the market’s growth.

Over the years, cloud-based operations have proved their reliability to end users via technological advancement, additional security measures, and cloud protection. For instance, in October 2022, Microsoft introduced a new Microsoft Defender for Cloud innovations and expanded the vision of cloud security. The Microsoft Defender for DevOps and Microsoft Defender Cloud Security Posture Management (CSPM) allows organizations to adopt an infinite approach to cloud security and bring security to the developers right away.

Moreover, the benefits of customization, efficiency, and privacy are further supporting the growing demand for private clouds to manage their network. Additionally, the deployment of virtual routers through private clouds further allows cost-efficiency to the organization, consequently helping the IT teams to effectively manage the network of the organization. Furthermore, 5G wireless gains traction in both developing and developed economies, and enterprises move towards Virtual Customer Premises Equipment (vCPE) resulting in the solid growth of this market over the projected period.

Technological advancements are predicted to impact the global virtual router market growth.

The development trajectory of the global virtual router market is expected to be greatly impacted by technological breakthroughs. The way networks are planned, implemented, and maintained is changing as a result of developments like cloud computing, software-defined networking (SDN), and network functions virtualization (NFV). Virtual routers are becoming more and more popular in a variety of sectors because they provide the affordability, scalability, and flexibility needed to support contemporary network systems.

The range of virtual router applications is growing as a result of technological advancements in virtual routers, which include more security features, better performance, and compatibility with newly developed networking protocols. Furthermore, advancements in fields like automation, machine learning (ML), and artificial intelligence (AI) are expanding the potential of virtual routers and making network administration, optimization, and troubleshooting more effective.

MARKET RESTRAINTS:

Several obstacles might prevent the virtual router business from expanding. Virtual router adoption may also be hampered by worries about data sovereignty and regulatory compliance, particularly in highly regulated businesses or areas with tight data privacy regulations. Organizations may also be discouraged from adopting virtualization completely by the difficulty of administering virtualized network infrastructures and the lack of expertise in the implementation and upkeep of virtual router solutions.

Furthermore, financial considerations including the initial investment cost and continuing operating costs related to virtual router installations may provide difficulties, especially for small and medium-sized businesses with tight budgets. All of these limitations make it difficult for the virtual router industry to expand and become widely used.

North America is anticipated to be the major regional market.

The virtual router market in the North American region is expected to hold a significant share during the forecast period. Countries like the US and China are leading the adoption of advanced security solutions. Additionally, due to its highly developed internet infrastructure and the roll-out of technologies such as 5G, the growing adoption of virtual router solutions by service providers to optimize their networking coupled with a rising preference to enhance the customer experience across all the major industry verticals in this region is expected to drive the demand for virtual routers in North America and Asia Pacific regions.

Product offering

• Juniper Networks offers vMX Series Universal Routing Platform that provides sophisticated routing capabilities for business and broadband services, including route reflection. This platform also supports a variety of optional virtualized services, significantly expanding its application range. Its key features include control-plane scale, full-featured, scalable routing support, and integration with Tier-1 cloud provider infrastructure.
• Cisco Systems, Inc. offers Cisco hardware routers as software called Integrated Services Virtual Router (ISRv). It can extend network security and services into the cloud while providing outstanding throughput performance, this ability allows the ISRv to earn Miercom Performance Verification certification.

Key Developments:

• In January 2024, the world's digital infrastructure leader, Equinix, Inc. announced the launch of Equinix Fabric Cloud Router, a new virtual routing solution designed to make it simple for businesses to link data and apps across on-premise and cloud deployments.
• In March 2023, to streamline and enhance customer-wide area networks, Arista Networks unveiled the Arista WAN Routing System, which combines three new networking offerings: carrier/cloud-neutral internet transit capabilities, enterprise-class routing platforms, and the CloudVision® Pathfinder Service.
• In February 2023, Mavenir introduced the Virtual Cell Site Router (vCSR), an innovative solution that moves the cell-site routing functionality into a containerized virtual function inside the Open RAN DU server (running on COTS hardware), Mavenir is the Network Software Provider building the future of networks with cloud-native solutions that run on any cloud.  In addition to lowering the number of cables and points of failure and simplifying deployment and operation, the vCSR also frees up rack space for other revenue-generating applications.

Segmentation:

By Type

• Predefined
• Custom

By Product

• Solution
• Services

By Deployment Model

• On-Premises
• Cloud

By End-User Industry

• Telco Providers
• Cloud Providers
• Enterprises

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others 
• Europe
• United Kingdom
• Germany
• France
• Spain
• Others 
• Middle East and Africa
• Saudi Arabia
• UAE
• Israel
• Others 
• Asia Pacific
• China
• Japan
• India
• South Korea
• Taiwan
• Thailand
• Indonesia
• Others