Custom Virtual Router Market Outlook:
Custom Virtual Router Market size was valued at USD 6.8 billion in 2025 and is projected to reach USD 14 billion by the end of 2035, expanding at a CAGR of 7.5% during the forecast period, i.e., 2026-2035. In 2026, the industry size of custom virtual routers is evaluated at USD 7.3 billion.
The custom virtual router market is rising steadily as a consequence of increasing adoption of software-defined networking (SDN) and network functions virtualization (NFV) in enterprise as well as telecommunication markets. The driving force behind it is the imperative of scalable, cost-effective, as well as flexible networking solutions as organizations shun hardware-based offerings of routers. Custom virtual routers offer higher flexibility, allowing organizations to dynamically redeploy network resources and ease management. In November 2024, VMware introduced VeloRAIN AI networking architecture, unveiling AI-driven edge appliances that support 100 Gbps performance as well as superior threat detection. The unveiling aims at bolstering security and performance in 2025 and subsequent-year deployments of virtual routing as well as SD-WAN. The products are indicative of the market's direction toward more intelligent, higher-performing virtual networking.
Government and industry-led initiatives are also playing a crucial role in shaping the custom virtual router market by establishing security and interoperability standards. These frameworks are essential for building trust and ensuring the secure deployment of virtualized network functions in multi-tenant environments. Regulatory bodies are increasingly focused on creating a secure cyberspace, which is driving the adoption of standardized and resilient virtual routing solutions. In January 2025, the European Telecommunications Standards Institute (ETSI) published an updated version of its NFV Security specification, introducing stronger safeguards for ensuring isolation and security in multi-tenant virtualized environments. This update provides critical security standards for the deployment of custom virtual routers and other virtual network functions.
