2015 has been the year that SDN NFV efforts “got real” in
telco networks. Past the first two years of enthusiasm that were marked by
unrealistic vendors’ announcements and a flurry of participation in standards,
open source and proof of concept projects. These efforts certainly put the
technology on the map and have set operators and vendors priorities towards the
exploration of the maturity, promises and limits of the technology.
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 have seemed 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...) in a multi-vendor elastic environment.
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. The business case for saving
based on new infrastructure introduction is difficult to make without
compelling new revenues streams financing the architectural upgrade.
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 unless innovative services are launched. 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.
OTT services explosion,
combined with the progressive opacity of the traffic due to encryption conspire
to make network planning extremely difficult. Peak traffic are unpredictable
and increasing in frequency and magnitude, which makes the rationale for
network capacity purchase based on dedicated appliances untenable from an
economic standpoint.
Revenue stagnation is a
given, with little in the way of new streams from new services such as VoLTE or
M2M for a few years.
Cloud technology seems to
be the key to the new OTT providers’ agility, but its implementation supposes a
complete organization, structural and process upheaval that network operators
are hesitating to implement without a firm business case.
SDN remains a reliable,
mature technology for enterprise and IT cloud management and traffic switching
but requires important efforts to adapt to telecommunication networks, mindsets
and regulatory frameworks.
NFV is emerging as a key
potential effect multiplier but, without a viable service orchestration
framework is becoming a collection of large proprietary frameworks from legacy
telecom equipment manufacturers or an endless suite of isolated virtual network
functions with little coherent cohabitation model for a harmonious service
delivery.
All is not lost though,
with an ecosystem that is moving faster than any initiative in the telecom
standards world, it feels that the vendors, operators can find the right recipe
within a few iterations, unleashing a flexible, scalable elastic environment
for the cost-effective creation and
management of tomorrow’s services.
There is certainly a race
between the likes of AT&T, Telefonica, Deutsche Telekom on the service
provider side and Affirmed Networks, ALU, Ericsson, Huawei and HP as some of
the leading vendors to deliver on the promises of SDN and NFV in telco
networks.
This report provides a review of the main trends that are
pushing network operators to move towards simplified cost effective network
architecture and the vendors’ strategies and roadmaps to address this
disruption in their traditional architecture and revenue model.
