Cloud networking is an IT infrastructure where the computing and storage capabilities are partially or fully stored in the cloud. It relies primarily on data centers, storing information in virtual servers.
Cloud networks can be hosted in public, private, or hybrid clouds. They can also either be managed by an in-house IT team or a third-party services provider.
See below to learn all about the global cloud networking market:
Cloud Networking Market
The market for data center construction, driven primarily by the increased demand for cloud networking, was estimated to be valued at $17.8 billion in 2020. It’s expected to maintain a compound annual growth rate (CAGR) of 6.9% over the analysis period from 2020 to 2027, reaching $28.5 billion by the end of it.
Regionally, the data center construction that supports cloud networking is segmented as follows:
- The U.S. market segment was estimated at $5.26 billion in 2020, with a 29.5% market share
- The Chinese market segment is expected to reach $4.97 billion by 2027, trailing a CAGR of 6.3%
- Japan and Canada are forecast to grow at CAGRs of 6.6% and 5.4% over the forecast period
- Within Europe, Germany is projected to maintain one of the highest CAGRs at 5.4%
- The Asia-Pacific segment, led by Australia, South Korea, and India, is forecast to reach $3.22 billion by 2027
By industry, the global government and defense segments are driving demand in the space. In the U.S., Japan, Canada, China, and Europe combined, the segments are estimated to see a CAGR of 6.4%. The segments are estimated to be worth $1.65 billion in 2020 and are projected to reach $2.58 billion by 2027.
With more companies moving to the cloud, they’re looking toward fully distributed cloud networking solutions.
Cloud networking applications can include a merging of cloud computing operations with cloud-native architecture. This can allow users to accelerate application velocity and provide a uniform application user experience.
“The pace of digital innovation is surging across the digital ecosystem in the post-pandemic era, resulting in a sharp expansion of applications and cloud usage, warranting cloud networking’s primacy,” says Ron Westfall in a post at Futurum.
“In response, organizations are adopting hybrid or multi-cloud frameworks to attain cloud networking benefits and deliver these experiences, meet key performance indicators (KPIs), and service level objectives (SLOs).”
Cloud Networking Features
Cloud networking architectures are used for their flexibility and scale. For most companies, it’s more effective to use virtual infrastructures and services instead of having to maintain physical resources on-premises.
Cloud networking solutions can be implemented with a variety of solutions in mind:
Cloud Security Automation
Cloud networks have scope and management capabilities for effective network security automation.
Working from a centralized location, cloud networking architectures enable IT teams to automate patch deployment and enforce security policies, including those powered by machine learning (ML) and artificial intelligence (AI).
Compatibility With On-Premises Networks
When necessary, virtual cloud networks can still connect with on-premises networks through a virtual private network (VPN).
Connecting the two through a VPN allows for encrypted communication and an efficient consolidation and access to physical resources.
Network Traffic Inspection
Through streamlining network management capabilities, cloud networking enables teams to manage traffic and resources based on current needs and demands.
Isolating customers and end users for specific use cases and compliance requirements can be done efficiently through cloud networking.
Segregating Cloud Service Environments
The flexibility of cloud networking solutions allows for easy segmentation of cloud services and environments based on size, scope, and usage capacities.
Segmentation can also be implemented differently throughout the application development life cycle, such as design, development, testing, and implementation of the app or service.
There are two types of common cloud networking architectures:
Cloud-based networking requires having both the network’s management software as well as its physical hardware in the cloud.
With the network’s nodes in the cloud, cloud-based networking connects all cloud applications and resources deployed on the web.
Cloud-enabled networking is a midway combination of cloud-based and on-premises networking architecture. It consists of an on-premises network with resources that are managed in the cloud.
Oftentimes used in SaaS networks and network security solutions, networking processing, such as maintenance and monitoring, are still performed in the cloud.
Benefits of Cloud Networking
The implementation of cloud networking architectures and solutions can have numerous benefits for companies, depending primarily on application.
Notable benefits of cloud networking include:
- Reducing network management costs
- Improving productivity
- Enabling network mobility
- Allowing for instant network scalability
- Minimizing unplanned downtime
- Simplifying and boosting network security
“This successful niche enterprise networking technology has now paved the way for much bigger markets in the future of cloud networking — what I am calling the Third Wave of Cloud Networks,” says R. Scott Raynovich in a post at Forbes.
“According to our end-user research, based on a survey of cloud networking practitioners with director-level and above positions, they are starting to deploy MCN technology in earnest.”
Cloud Networking Use Cases
any.cloud is a certified IBM Business Partner and a provider of cloud services and IT consulting. The company has three offices in Denmark, Poland, and the Czech Republic, operating in over 30 countries and with over 500 customers.
Hoping to further expand its company into other regions, any.cloud needed to host its business continuity services in a cloud environment. Seeking a strategic partner, any.cloud decided on IBM.
any.cloud used the IBM Cloud Network, due to its resilience and the high availability built into its design. The company was able to deliver a new set of services and solutions to its clients.
“I have a personal passion for keeping any.cloud at the highest standards for quality and client satisfaction, which is why we partnered with IBM,” says Gregor Frimodt-MØller, group CEO, any.cloud.
“By moving our solutions to IBM Cloud, we are able to embrace the entire world and become a truly global business. From a business perspective, IBM Cloud has been a strategic partner by enabling us to become an international player.”
Ronchin, France-based ADEO is a global retailer in the home improvement market. The company provides home life, tools, and DIY supplies for individuals and traders across 15 countries and 900 stores.
In order to stay on par with other online retailers and better serve its 450 million customers from around the world, ADEO decided to build an application development platform for its 120,000 employees in the cloud.
ADEO chose to work on the Google Cloud network, as it provided connectivity between APIs across the company’s regions. It was also able to use Google Cloud to integrate with third-party applications seamlessly.
“One main benefit of Google Cloud for us is how much faster we can now build new applications, facilitate tests, and only pay for what we use, instead of having to invest in additional infrastructure to test out an idea,” says Renaud Pelloux, product leader, ADEO.
“Improved speed and agility leads to improved customer service.”
Switching its infrastructure to the Google Cloud, ADEO was able to provision resources in 20 minutes instead of four days, speed up the time to market, and use simple tracking of cloud resources.
Friedrichshafen, Germany-based ZF Group is a global technology company that manufactures and supplies automobile systems for commercial and industrial vehicles. The company has become a leader in manufacturing autonomous vehicles, in addition to electric vehicles and vehicle safety research.
Looking to become a software-driven company and pioneer a future of autonomous vehicles through a campus-to-cloud network foundation, ZF Group’s previous network technology couldn’t keep up.
Since cloud-based resources are key for meeting the demand of the network, ZF Group sought the help of Juniper Networks. Using network automation, the company was able to achieve higher levels of efficiency as the business grew.
“Flexibility is key, because IT is always under pressure,” says Patrick Arvaj, manager of IT network platforms,ZF Group.
“Juniper is a great example of enabling the power of choice to use vendor-specific solutions. It’s crucial to IT’s success that we can provide solutions to the business without any risk of vendor lock-in.”
Cloud Networking Providers
Some of the leading providers of cloud networking market include:
- Extreme Networks
- Juniper Networks
- Brocade Networking Solutions
- Hewlett Packard Enterprise (HPE)
- Dell Technologies