Taking the Pulse of NFV in the Mile-High City
Jim Hodges, Principal Analyst – Cloud and Security, Heavy Reading
In a little over a month, Light Reading will be hosting its annual NFV & Carrier SDN event in Denver, Colo., September 24-26. Since its inception five years ago, this event has provided a sounding board for service providers and vendors to speak openly about the state of NFV and SDN implementations. At last year's event, the predominant theme was that while the industry is close to reaching the technology pinnacle, and commercial deployments exist (see video interview below), a mix of business and technical issues were still holding carriers and vendors back.
This year's event will examine the industry's progress in monetizing virtualization efforts, but will also consider the impact of new topics such as automation, which is now positioned as a ubiquitous add-on to any technology. It's still early days but automation does have strong potential to enhance virtualized networks -- especially in a security context.
Still, I am hoping we don’t make the same mistake with automation as we did with NFV and saddle it with unrealistic implementation objectives. What I mean is the theme that NFV has not lived up to expectations is still making the rounds based on carrier implementation frustrations. (See NFV Is Down but Not Out.)
But maybe we should step back and revisit the sources of frustration. My sense is that the frustrations are now predominately business driven and price sensitive. While this is not trivial, these growing pains indicate that NFV has achieved the technology maturity to be commercially deployed on a massive scale. In hindsight, wasn’t it a little naïve to think that vendors would be willing to shift their billing models overnight, resulting in a sharp drop in their operating margins?
Business transformations often take considerably longer than technology transformations and the more disruptive the technology, the more disruptive the business impacts. This is the case with NFV and while there is no standard business plan for how this universally plays out we shouldn’t blame the technology.
At the same time, the service provider community appears undeterred and continues to exert pressure on vendors to make the business transformation or risk being replaced -- I believe progress will ultimately be made. At the end of the day, ironically, the historical economic models of Adam Smith will play an important role in the successful adoption of NFV.
And let's be honest, NFV, SDN and the cloud fabric they deliver are the future. Without this fabric, 5G wouldn't be achievable in a few years. It's unlikely the telecom industry would have designed and standardized a 5G next-gen core (NGC) and new radio (NR) in only two years without the foundations of NFV and SDN.
Let's learn from NFV and SDN and exert patience with the business transformation process in 5G deployments. 5G and network automation will also be subject to the same business carrier push/vendor pull pricing issues on a potentially greater scale, which sets them both up for underachievement status in three to five years.
One last thing: If you are a carrier who has cracked the NFV business transformation model using some innovative approaches, please contact me at email@example.com, if you would like to discuss informally.
Better yet, join me to discuss the NFV and SDN transformation in person at our NFV & Carrier SDN event in Denver on September 24-26 -- you can register for the event here, and it's free for service providers to attend. You will also have the opportunity to learn about the viritualization journey from experts such as Antonio Elizondo, head of network virtualization strategy and technology for Telefónica ; Kevin McBride, principal architect of SDN and NFV technologies for CenturyLink Inc. (NYSE: CTL); Scott Fairchild, VP of client experience for Spectrum Enterprise ; Bryce Mitchell, director of NFV, cloud, innovation labs and support networks for Telus Corp. (NYSE: TU; Toronto: T); and more. I look forward to seeing you in Denver!
— Jim Hodges, Principal Analyst, Cloud & Security, Heavy Reading