In order for telecom providers to start savings costs as they prepare for the future of 5G technology, they need to look at moving network functions into software vis-à-vis hardware.
But how can they do this? The simple answer is by using network functions virtualization (NFV). NFV promises to revolutionize network architecture for telecom companies and their customers by making firewalls, load balances, and software encryption standard on all servers.
Instead of buying physical routers, Quality of Experience (QoE) monitors, firewalls, or session border controllers, these functions can be run as virtual appliances, reducing equipment costs and power consumption. The time-to-market for new services becomes days instead of months. So, service providers have the flexibility to scale services up or down, and evolve their services quickly.
ABI Research predicts that total market revenues from NFV solutions will touch $38 billion by 2022 as the telecom industry embraces the new technology. While the excitement around NFV is palpable, it is not without its challenges.
In recent years, early adopters were still trying to understand the impact of NFV in the technical, operational, and cultural domains, according to ABI Research. While there were some successes early on, most people struggled to understand the technical and operational aspect of NFV. One of the major concerns was its impact on existing products.
ABI Research states that early adopters conducted proof-of-concept testing and NFV-integrated system demonstrations with the aim to understand the true impact of NFV in the technical, operational, and cultural domains. The years 2015 and 2016 saw them experiencing some early successes, but reconsiderations and failures with NFV were significant.
Interoperability and Vendor Compared to Open Source
The experimental phase is reaching its conclusion as NFV adoption goes mainstream, but telecom providers face a tough choice upfront: open source, in-house, or multi-vendor management?
Standards groups are promoting two primary open-source management and orchestration (MANO) options for NFV:
The goal of these standardization projects is interoperability. With vendors as varied as Ericsson, Huawei, Cisco, and HP, as well as NFV-specific firms like Anuta Networks and Netcracker Technology offering solutions in this space, interoperability problems loom on the horizon for telecom providers.
ABI Research says that although the market is evolving and technical expertise is growing, standardization and multi-vendor involvement challenges will take time to overcome.
Telecoms Taking the Plunge
Despite these challenges, the benefits in terms of cost-cutting, scalability, and time-to-market have led service provides to implement NFV solutions faster than anticipated.
Operators like AT&T, Telefónica, Verizon, and CenturyLink are all deploying NFV solutions-and it's paying off. Speaking at the MoffettNathanson Media and Communications Summit, AT&T CFO John Stephens said that the operator was already reaping the benefits of its investments.
34% of AT&T's networks were virtualized by the end of 2016, aiming for a further 55% by the end of this year. They hope to have 75% virtualization by 2020.
And the savings from the change in their network architecture help fund the rest of the upgrade. According to Stephens, the initial investment to upgrade to 34% is already saving the telecom money.
In Australia, Telstra is investing heavily in its Telstra Programmable Network, which will be powered by NFV and the complementary technology of software-defined networks (SDN). It promises to be a 'network-as-a-service with global reach.'
Strategic Opportunities for Telecoms
While the immediate cost and flexibility benefits are hugely appealing, telecoms investing in NFV are also looking towards the future-5G technology. Many industry experts and telecom service providers have said that the deployment of 5G networks will depend on technologies like NFV and SDN.
Trying to control, automate, and upgrade 5G networks through hardware alone would be incredibly slow and difficult to manage, not to mention hugely costly. But running networks through software will increase efficiency and streamline network management.
Written by Piyush Tandon
Published on: November 23rd, 2017