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There is a massive shift underway in carrier sourcing and design strategies, with open source-first philosophies unequivocally at their core. New research also reveals major growth in network control, orchestration and the edge and the move to replace proprietary equipment with disaggregated approaches is well-documented.

A new report from ACG adds further evidence that Communication Service Providers (CSPs) are eager to leverage white box servers and SDN/NFV:

    • The infrastructure mix itself is shifting toward software, with hardware sales declining ~3% per year to 72% of the total DC networking infrastructure spend in 2023.
    • Spending for MEC- and CORD-type edge deployments is expected to grow 4-5x over the next 5 years.
    • In the exploding edge market, virtually all new revenue growth will come from software.
    • Led by edge and access aggregation locations, adoption of transport routing open source hardware (including merchant-silicon NPUs) from existing hardware vendors (EPCs) will increase from 5% to 35% in the next 5 years. As a percentage of total revenue, EPC transport routing hardware will decline from 70% to 52% while services and software licensing will expand in the next 5 years.

In the CSP’s view, the most effective vendors are those who share their mindset around open source software as a driver for future growth in these areas. These vendors are fully immersed in key upstream projects so they can advise their carrier customers and develop needed new platform features; and they are thinking proactively about how to shift their business models and offerings in response to the carriers’ changing needs.