Virtual Extensible Local-Area Network (VXLAN) Global Market Report 2024

Virtual extensible local-area network (VXLAN) is a network virtualization technology designed to extend the capabilities of traditional virtual local area networks (VLANs) to address scalability challenges in large-scale network environments, such as data centers. VXLAN enhances network scalability, improves resource utilization, and simplifies network management, making it an essential tool for modern data centers and cloud environments.

The main components of VXLAN are hardware, software, and services. The hardware includes physical devices and equipment necessary for setting up and operating VXLAN networks. These components are used for various applications, including multi-tenancy, workload mobility, software-defined networking (SDN) overlays, and network function virtualization (NFV). Large enterprises and small and medium-sized enterprises (SMEs) in industries such as manufacturing, healthcare, banking, financial services, and insurance (BFSI), retail, media and entertainment, government, information technology (IT) and information technology enabled services (ITES), telecommunications, and other sectors utilize these technologies.

The virtual extensible local-area network (VXLAN) market research report is one of a series of new reports that provides virtual extensible local-area network (VXLAN) market statistics, including the virtual extensible local-area network (VXLAN) industry global market size, regional shares, competitors with virtual extensible local-area network (VXLAN) market share, detailed virtual extensible local-area network (VXLAN) market segments, market trends, and opportunities, and any further data you may need to thrive in the virtual extensible local-area network (VXLAN) industry. These virtual extensible local-area network (VXLAN) market research reports deliver a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The virtual extensible local-area network (VXLAN) market size has grown rapidly in recent years. It will grow from $1.54 billion in 2023 to $1.81 billion in 2024 at a compound annual growth rate (CAGR) of 17.7%. The growth during the historic period can be attributed to a surge in the need for scalable network infrastructure, increased demand for multi-tenant environments, the expansion of software-defined networking (SDN), a heightened need for improved network security and segmentation, the rise of virtualized data centers, and enhanced network security requirements.

The virtual extensible local-area network (VXLAN) market size is expected to see rapid growth in the next few years. It will grow to $3.51 billion in 2028 at a compound annual growth rate (CAGR) of 18%. The growth in the forecast period can be attributed to increasing data center virtualization, growing demand for enhanced network scalability and flexibility, a heightened focus on network security and segmentation, the rising adoption of cloud services, and the need for improved network performance and flexibility. Major trends during this period include advancements in cloud services and data center technologies, the adoption of IoT and edge computing, and innovations in network virtualization and automation technologies.

The growth of cloud computing services is expected to drive the expansion of the virtual extensible local area network (VXLAN) market. Cloud computing services deliver resources such as servers, storage, databases, networking, software, and analytics over the internet. Their rise is attributed to scalability, flexibility, and cost-efficiency, enabling businesses to leverage advanced technology solutions without the need for on-premises infrastructure management. VXLAN enhances network scalability, flexibility, and efficiency in cloud computing by creating isolated virtual networks over existing IP infrastructure. It supports dynamic, secure multi-tenant environments and integrates with advanced network technologies. For example, according to Eurostat Statistics in April 2024, 45.2% of EU businesses adopted cloud computing in 2023 for email hosting, file storage, and office software, with 75.3% using advanced cloud services such as security software and database hosting - a 4.2% increase since 2021. Consequently, the growth of cloud computing services will drive the VXLAN market.

Major companies in the VXLAN market are focusing on developing innovative solutions, such as next-generation firewalls, to provide robust security, performance, and flexibility for modern networks. These firewalls enable granular network segmentation and micro-segmentation within VXLAN environments, isolating different network segments to limit the spread of attacks and ensure consistent security policies across virtual networks. For instance, in June 2022, Cisco Systems Inc. launched the Cisco Secure Firewall 3100 Series. This series offers VXLAN features, enhancing network scalability and flexibility with a web interface for easy setup of interfaces and virtual network interfaces (VNIs), and interface management via FlexConfig for flexible, persistent settings. The high-performance VXLAN processing ensures efficient handling of encrypted traffic, while the Cisco secure firewall management center simplifies network oversight, making the 3100 Series a powerful solution for managing VXLAN traffic and enhancing network security and performance.

In March 2023, Cisco Systems Inc. acquired Valtix, enhancing its product offerings and engineering expertise to accelerate the development of the Cisco Security Cloud. Valtix, a US-based computer and network security company, focuses on developing cloud platforms based on VXLAN technology.

Major companies operating in the virtual extensible local-area network (VXLAN) market are Microsoft Corporation, Alibaba Cloud, Dell Technologies Inc., Huawei Technologies Co. Ltd., Intel Corporation, Cisco Systems Inc., Oracle Corporation, Broadcom Inc., NVIDIA Corporation, Hewlett Packard Enterprise Company, Nokia Corporation, VMware LLC, Keysight Technologies, Juniper Networks Inc., Fortinet Inc., Red Hat Inc., Arista Networks Inc., Extreme Networks, Ribbon Communications Inc., Spirent Communications, FS.com Inc., Arrcus Inc., Pica8 Software Inc., IP Infusion, Asterfusion Data Technologies Inc.

North America was the largest region in the virtual extensible local-area network (VXLAN) market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the virtual extensible local-area network (VXLAN) market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the virtual extensible local-area network (VXLAN) market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The virtual extensible local-area network (VXLAN) market consists of revenues earned by entities by providing services such as network virtualization, data center interconnect, cloud integration, and enhanced traffic management. The market value includes the value of related goods sold by the service provider or included within the service offering. The virtual extensible local-area network (VXLAN) market also includes sales of top-of-rack (ToR) switches, border routers, network interface cards (NICs), and application delivery controllers (ADCs). Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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