Market Insight

Universal CPE: A new market and new deployment model for managed services

August 28, 2018

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  • The universal customer premises equipment (uCPE) market will increase from $7.7 million in 2017 to $1.02 billion in 2022 – a cumulative $1.9 billion market over the six years from 2017 to 2022.
  • uCPE without demarcation functions is anticipated to comprise the largest share of the market throughout the forecast period, representing $820 million of $1.02 billion in 2022. uCPE with demarcation includes equipment such as Ethernet access devices (EADs), routers and certain software-defined wide area network (SD-WAN) products.
  • Although all three product sizes (small, medium and large) serve important market segments, the medium uCPE is the sweet spot, accounting for $750 million of $1.02 billion total revenue in 2022.

Our analysis

Telco operators around the world are extending their network functions virtualization (NFV) environments outside the usual data centers and central offices (COs) to customer sites on CPE, or universal CPE (uCPE).

IHS Markit defines a uCPE as a device providing a "pico cloud," including compute, storage and switching capable of executing virtualized network functions (VNFs) such as virtual firewalls, SD-WAN, virtual WAN, virtual application delivery controllers and optimization appliances.

The main purpose at a customer site is for a single uCPE to take the place of several network appliances and devices by executing software functions such as firewalls, SD-WAN, WAN optimization control, virtual private networks (VPNs), routers, etc. Universal CPEs provide many benefits to service provider and customer alike, in that new virtualized appliances can be offered and deployed days after their release, rather than waiting months, quarters or years for new hardware. The very flexible nature of software running on standard compute allows multiple VNFs to run on a single uCPE.

IHS Markit estimates that fewer than 600 units of uCPE were shipped in 2016, mostly for lab testing and a small fraction in field trials. 2017 was tepid as an initial takeoff year with under 7,000 units shipped. However, a heavy ramp is expected from 2018 onward. Recent IHS Markit global carrier surveys on software-defined networking (SDN) and NFV reveal that 82 percent of operators polled are deploying or plan to execute VNFs on uCPE located at customer sites (with 97 percent in COs and 85 percent in data centers).

 The uCPE market is underway and on the rise.

uCPE report synopsis

The IHS Markit “uCPE Hardware Biannual Market Report” report focuses on the size and forecast of the new uCPE market in small, medium and large categories, as well as segments of uCPE with and without network demarcation functions.


Research by Market
Enterprise & IT Mobile & Telecom
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