Monday, February 23, 2015

The future is cloudy: NFV 2020 part II

I have received some comments after my previous post arguing that maybe the future of SDN and NFV is not as far as I am predicting. As we are all basking in the pre Mobile World Congress excitement, inundated by announcements from vendors and operators alike trying to catch the limelight before the deafening week begins, I thought I would clarify some of my thoughts.

We have seen already this week some announcements of virtualization plans, products and even deployments.

One of the main problems with a revolutionary approach such SDN and/or NFV implementation is that it suggests a complete network overhaul to deliver its full benefits. In all likeliness, no network operator is able to operate fully these kind of changes in less than a 10 years' timescale, so what to do first?

The choice is difficult, since there are a few use cases that seem easy enough to roll out but deliver little short term benefits (vCPE, some routing and switching functions...) while the projects that should deliver the highest savings, the meaty ones, seem quite far from maturity (EPC, IMS, c-RAN...). Any investment on this front is going to be just investment with little to no return in the short term.

The problem is particularly difficult to solve because most of the value associated with virtualization of mobile networks in the short term is supposedly ties to capex and opex savings. I have previously highlighted this trend and it is not abating, more like accelerating.
Islands of SDN or NFV implementations in a sea of legacy network elements is not going to generate much saving. It could arguably generate new revenue streams if these were used to launch new services, but today’s focus has been so far to emulate and translate physical function and networks into virtualized ones, with little effort in term of new service creation.

As a result, the business case to deploy SDN or NFV in a commercial network today is negative and likely to stay so for the next few years. I expect the momentum to continue, though, since it will have to work and to deliver the expected savings for network operators to stand a chance to stay in business.

The other side of this coin is the service offering.  While flexibility, time to market and capacity to launch new services are always quoted as some of the benefits of network virtualization, it seems that many operators have given up on innovation and service creation. The examples of new services are few and far between and I would hope that these would be the object of more focused efforts.

At last, it seems that maybe one of my previsions will be fulfilled shortly, a friend pointed out that this year's GSMA freebee for its member at the show will be... a selfie stick.