The Global Virtual Networking Market size is expected to reach $150 billion by 2029, rising at a market growth of 25.5% CAGR during the forecast period.
By merging software and hardware network resources with software-based administration via the internet, virtual networking is a technique that promotes data transfer between virtual computers. Numerous advantages of virtual networking include fewer physical devices required, simple network segmentation, scalability along with rapid deployment, as well as security from physical device destruction.
Network virtualization is employed in software testing and application development to simulate connections between programs, dependencies, services, and end users. Organizations use virtual networking techniques to protect servers from physical damage as digitization grows. There are three different types of virtual networks, namely, VPN, VLAN, and VXLAN. A virtual private network is another name for VPN. It is capable of connecting to the internet through various connections. Users mostly use it to conceal internet use and establish secure connections. A virtual LAN network is another name for VLAN.
The servers and devices inside a given domain can be managed, monitored, and secured effectively by using a VLAN. This is particularly true for huge networks, which are potentially more open to attack when individual components aren’t used and kept track of. Finally, in a Virtual extensible local area network or VXLAN, the level 3 network infrastructure offers a tunnel into level 2. Each tunnel’s endpoints are created by virtual switches, and another technological component known as a real or virtual base case can transmit data between endpoints.
Through virtual networking, several PCs, virtual servers, virtual machines (VMs), or additional equipment can communicate across different workplace and data center locations. Virtual networking expands on these abilities through the use of software administration to connect servers and computers over the Internet. In contrast, physical networking uses cabling along with additional hardware to connect computers. In addition, for more effective routing and simpler network configuration updates, it uses virtualized versions of conventional network tools like network adapters and switches.
COVID-19 Impact Analysis
Despite a modest decline in demand during the first half of the pandemic, the market rapidly expanded recently and is predicted to continue expanding in the years to come. Since more businesses worldwide are turning to online collaboration and remote work, the COVID-19 pandemic benefited the virtual networking market. Due to the pandemic, many firms had to switch to remote work, which increased the demand for virtual networking systems that allow remote access to business networks and applications. Due to this, the demand for virtual desktop infrastructure (VDI), virtual private networks (VPNs), and other remote access solutions increased significantly.
Market Growth Factor
Growing managed VPN and cloud integration
The cloud has undergone innovation as a result of technological advancements. As a result, the cloud-based industry has experienced phenomenal growth due to scalability, portability, flexibility, and high data availability. By forming alliances with these cloud service providers, virtual networking solution providers can take advantage of the growing number of chances to connect the cloud with their services. Furthermore, since virtual networking offers secure access to a network, these partnerships also aid in resolving the issue of cyber security risks and breaches. Adopting hybrid networks in the workplace is becoming more popular among consumers.
Ease of communication and network management
End users have full access to the network owing to virtual networking, which also allows for network monitoring and management. When danger is detected, solution providers support businesses by alerting users and controlling network endpoints. Additionally, access to a portal where all network-related operations, like service management, mobile health monitoring, SLA management, as well as performance reporting, are recorded makes network management much simpler for enterprises. Additionally, managed network services aid businesses in making the best use of all resources, which boosts business productivity. Therefore, it is projected that ease of network management would be a key element boosting the demand for virtual networking.
Market Restraining Factor
Lack of supportive infrastructure and complexity of business
Since virtual computers and containers can be moved across servers when everything is moved to a virtual network, finding data becomes challenging. The administrator controls several endpoints because there are numerous virtual machines and containers. The bandwidth and latency issues that arise if the infrastructure is not constructed considering the needs changes are another concern in this situation. Additionally, finding the proper vendor for the virtual network installation is vital due to the complication of integrating software from several providers and the complexity it produces.
Deployment Outlook
Based on deployment, the virtual networking market is categorized into on-premise and cloud. The on-premise segment procured a considerable growth rate in the virtual networking market in 2022. The desire for hybrid and multi-cloud settings, which call for on-premise virtual networking solutions to safely link cloud-based resources with on-premise resources, is a key element fueling the sector’s expansion. The demand for safe and dependable on-premise virtual networking systems will keep increasing as businesses adopt additional cloud-based applications.
Component Outlook
By component, the virtual networking market is classified into hardware, software, and services. The services segment witnessed a substantial revenue share in the virtual networking market in 2022. The demand for managed and professional services that may aid enterprises in the planning, design, deployment, and management of virtual networking systems is what has caused the segment to expand. Organizations seek specialized services that can offer them the knowledge, tools, and assistance they need to ensure the effective deployment and administration of their virtual networking solutions as virtual networking becomes more complicated and essential to corporate operations.
Organization Size Outlook
On the basis of organization size, the virtual networking market is divided into large enterprises and small & medium enterprises. The small and medium enterprises segment recorded a significant revenue share in the virtual networking market in 2022. The market is expected to grow throughout the forecast because small and medium businesses rapidly embrace cloud-based solutions for their information technology infrastructure. These cloud-based solutions include cloud storage, cloud-hosted applications, as well as cloud-hosted servers.
Application Outlook
Based on application, the virtual networking market is segmented into BFSI, public sector, manufacturing, hospitality, IT & telecommunication, healthcare, and others. The IT and telecommunication segment witnessed the maximum revenue share in the virtual networking market in 2022. The capacity of virtual networking solutions to provide improved cost savings, flexibility, and scalability is an important factor contributing to the growth of this market segment. Without the need to construct and operate physical network equipment, IT and telecommunication firms can create, change, or eliminate virtual networks as required to support shifting business requirements with the help of solutions that enable virtual networking.
Regional Outlook
On the basis of region, the virtual networking market is analysed across North America, Europe, Asia Pacific, and LAMEA. The North America segment acquired the highest revenue share in the virtual networking market in 2022. The ever-increasing demand for software-defined networking (SDN), network function virtualization (NFV), and cloud computing solutions are driving considerable growth in the North America market. In North America, the adoption of cloud computing is driving up demand for virtual networking solutions. This is because organizations are migrating their information technology infrastructure to the cloud to improve their agility, save money, and expand their scalability.
The major strategies followed by the market participants are Acquisitions. Based on the Analysis presented in the Cardinal matrix; Microsoft Corporation is the forerunner in the Virtual Networking Market. Companies such as Cisco Systems, Inc., Verizon Communications, Inc., and Huawei Technologies Co., Ltd. are some of the key innovators in Virtual Networking Market.
The market research report covers the analysis of key stakeholders of the market. Key companies profiled in the report include Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.), Hewlett Packard Enterprise Company, VMware, Inc., Cisco Systems, Inc., Microsoft Corporation, IBM Corporation, Citrix Systems, Inc. (Cloud Software Group, Inc.), Juniper Networks, Inc., Oracle Corporation and Verizon Communications, Inc.
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Recent Strategies Deployed in Virtual Networking Market
Partnerships, Collaborations and Agreements:
Jan-2023: Huawei Technologies joined hands with Etisalat UAE (e&), a telecommunications service provider. The collaboration focuses on the deployment and testing of 5G Portable Private Network MEC. Furthermore, through this collaboration. the company intends to provide smart connectivity and innovative digitalized solutions to the customers of Etisalat UAE.
Jan-2023: Microsoft came into partnership with Tech Mahindra, an information technology services and consulting company. Through this partnership, both the company would help its customers build secured networks with seamless experiences across the Microsoft cloud and the operator’s network.
Nov-2022: Juniper Networks formed a partnership with PT IndoInternetTbk (Indonet), a digital infrastructure provider, to modernize, automate, and facilitate the expansion of the network infrastructure of PT IndoInternetTbk across Indonesia.
Nov-2022: Verizon entered into a partnership with Wipro Limited, a leading technology services and consulting company. The partnership would enable organizations to accelerate the modernization of network and cloud transformation.
May-2022: Cisco signed an agreement with Vietnam Posts and Telecommunications Group, a telecommunications company. The company would offer a next-generation network infrastructure based on software-controlled optical network technology by integrating the capabilities of two sides and providing digital services to small, medium, and big organizations in the 5G era.
Feb-2022: Hewlett Packard teamed up with Qualcomm Technologies, an American multinational corporation. Following this collaboration, the companies aimed to provide advanced 5G distributed units powered by Qualcomm X100 5G RAN. Moreover, the companies would also focus on meeting the demands of next-generation networks, streamlining the deployments as well as reducing the total cost of ownership by providing high-performance, energy-efficient, virtualized, and O-RAN-compliant cloud-native 5G solutions.
Nov-2021: Oracle came into a partnership with Bharti Airtel, India’s exclusive communications solutions provider. This partnership aimed to support the development of India’s digital economy by obtaining a range of industry-leading cloud solutions. Additionally, Organisations are shifting to cloud-based applications to propel their digital transformation journeys.
Oct-2021: Verizon joined hands with Fortinet, an American multinational corporation. This collaboration aimed to integrate Fortinet Secure SD-WAN expertise into the portfolio of Verizon Software-Defined Secure Branch in order to offer in-a-box solutions to businesses. Moreover, the new solution is a converged security and networking solution intending to connect and secure remote and hybrid workforces.
May-2021: Juniper partnered with VicTrack, a Victorian Government state-owned enterprise that owns all railway and tram lines. Under this partnership, Juniper would help VicTrack in upgrading its statewide network that helps government applications and mission-critical transport.
Acquisitions and Mergers:
Sep-2022: IBM completed the acquisition of Dialexa, a foremost digital product engineering consulting service. This acquisition would improve IBM’s hybrid cloud and AI abilities, and boost growth for customers. However, the acquisition is expected to enhance IBM’s product engineering expertise and provide end-to-end digitalization services for consumers.
Feb-2022: Juniper Networks acquired WiteSand, a cloud-based zero-trust security startup. Following this acquisition, Juniper would integrate WiteSand’s access control technology with its cloud-based Mist network management platform for branch offices and campus.
Nov-2021: Verizon completed the acquisition of TracFone Wireless, Inc., an American prepaid, no-contract mobile phone provider., and TracFone’s family of brands. The acquisition of TracFone Wireless, Inc and its brands expands Verizon’s portfolio and the would be able to bring its wireless network and comprehensive suite of mobility products and services to a new client’s base.
Oct-2021: IBM acquired Volta Networks, a Developer of a cloud-native routing platform. The acquisition would enable the company to extend its leadership in network automation and analytics and help manage cloud network resources by applying Volta technology.
Jul-2021: Cisco acquired Socio Labs, Inc., a modern event technology platform. This acquisition would broaden Webex’s portfolio more than webinars, meetings, and webcasts to include large-scale multi-session hybrid conferences.
May-2021: Cisco took over Sedona Systems, a technology company that offers a leading multi-vendor, cross-domain network controller. The acquired company would add strong talent to Cisco that would continue to enhance optical capabilities for the Mass-scale Infrastructure Group (MIG) & improve Cisco’s network automation Crosswork portfolio.
Feb-2021: Hewlett Packard Enterprise acquired CloudPhysics, a cloud analysis platform provider. Through the acquisition, HP remained true to its commitment to data-driven insights. The acquisition added CloudPhysics’ SaaS-based, data-driven platform for analysis of on-premises and cloud setups bringing detailed insights to customers and partners across most IT environments. HP also released its new Software-Defined Opportunity Engine (SDOE).
Jan-2021: Juniper Networks took over Apstra, a leader in intent-based networking. With this acquisition, the company aimed to complement its strategy of providing the best-in-class experience-led offerings for the data center in each customer segment.
Product Launches and Expansions:
Mar-2023: VMware introduced NSX 4.1. The new solution features allow the sending of IDS/IPS logs from the NSX Gateway firewall to the company’s Network Detection and Response. The VMware NSX 4.1 enable VMware customers to take advantage of advanced security, enhanced networking, increased operational efficiency, and simplified troubleshooting.
Feb-2023: Huawei released Digital Managed Network Solution. The launched solution would assist the carriers in grabbing digital transformation opportunities and promoting growth. Additionally, this would deliver rich product portfolios and digitally managed network capabilities to help carriers shift from ISPs to MSPs.
Apr-2022: Hewlett Packard Enterprise (HPE) revealed the RAN Automation suite of software. The new solution features a non-real time RAN Intelligent Controller (RIC) element to support third-party applications. The launch of the RAN Automation suite is aimed to enable operators to run their networks efficiently.
Sep-2021: Huawei rolled out Airport Cloud-Network Solution, a feature-rich solution. Through this launch, the company aimed to bolster the digital transformation of airports with a broad line of standout features in order to expand operational efficiency, increase security assurance and improve the travel experience.
Scope of the Study
Market Segments covered in the Report:
By Deployment


    • Cloud
    • On-premise


By Component


  • • Software
    • Hardware
    • Services


By Organization Size


  • • Large Enterprises
    • Small & Medium Enterprises


By Application


  • • IT & Telecommunication
    • BFSI
    • Manufacturing
    • Public Sector
    • Healthcare
    • Hospitality
    • Others


By Geography


  • • North America


o US
o Canada
o Mexico
o Rest of North America


  • • Europe


o Germany
o UK
o France
o Russia
o Spain
o Italy
o Rest of Europe


  • • Asia Pacific


o China
o Japan
o India
o South Korea
o Singapore
o Malaysia
o Rest of Asia Pacific


  • • LAMEA


o Brazil
o Argentina
o UAE
o Saudi Arabia
o South Africa
o Nigeria
o Rest of LAMEA
Companies Profiled


  • • Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.)
    • Hewlett Packard Enterprise Company
    • VMware, Inc.
    • Cisco Systems, Inc.
    • Microsoft Corporation
    • IBM Corporation
    • Citrix Systems, Inc. (Cloud Software Group, Inc.)
    • Juniper Networks, Inc.
    • Oracle Corporation
    • Verizon Communications, Inc.


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