The market will grow at a CAGR rate of 10%.
The virtual appliances market is expected to reach 30% of total market revenue in 2017 which currently accounts 10% of the market.
Increase in the implementation of virtual appliances in production networks and cloud environments is predicted to drive the market.
Dell'Oro group data centre appliance market research senior analyst, Casey Quillin, said that optimised performance advantages, such as SSL and IPSec offloading, will increase the sales of physical devices in the coming years.
"Virtual appliances are a nascent and fast-changing market. We foresee higher-end, higher-priced products that make networks smarter becoming more prevalent," Quillin said.
Recently companies including the F5, Riverbed, Citrix, and A10 have launched virtual appliance applications for the public cloud that are compatible with Amazon Web Services.
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