Light Reading
Customer premises equipment (CPE) is set to change dramatically in the coming years through virtualization, a process that will change business models for telcos, helping them to reduce capex and opex.

Virtualization to Transform CPE

Simon Sherrington
Heavy Lifting Analyst Notes
Simon Sherrington
5/5/2014
50%
50%

Network functions virtualization (NFV)/software-defined networking (SDN) fever is gripping the telecom world, and the effects of redesigning networks to make greater use of virtualization and programmable control plane techniques look set to be felt throughout network operators' organizations. One place where NFV is about to have a major impact is the customer premises.

Operators spend billions of dollars supplying, installing, configuring, and maintaining customer premises equipment (CPE), both for enterprise and for residential customers. Many customer sites are equipped with multiple devices: set-top boxes, data storage, and home gateways in the residential market. There are also routers and security, bandwidth management, and storage devices in the business market, to name just a few.

Virtualization techniques offer the opportunity to reduce the number of individual devices at locations; to enable remote hosting, configuration, and management of functions traditionally resident at the customer premises; or even to enable virtualization of functions and features onto higher-spec individual devices at the customer site. There have been debates for years about whether customer premises should have thin-client devices or multi-purpose devices capable of running many complex applications. That debate has intensified in the world of NFV.

Many vendors of residential and enterprise CPE have yet to show their hands. They remain tight-lipped about how they plan to evolve their products and services to cope with the changes that will be forced on them as operators rebuild their networks for the next decade. (Most of them state privately that they are involved in tests and trials with friendly customers.)

Those that have launched new products and services under the broad description of virtualized CPE, though, have already shown enough for us to see that CPE virtualization is going to shake up the supply chain, is going to lead to new players arriving in the market, and is likely to lead to several suppliers disappearing.

In the view of this analyst, operators will not be slow to adopt virtualization techniques at the customer premises: There is too much money involved, and the possibilities for new technology approaches are too compelling. The options newly available to network operators and service providers promise to reduce capex, drive down ongoing opex, speed time to market, and enable them to launch new services without replacing old equipment. In the words of one industry player interviewed for the report, operators are "clamoring" to see, test, and explore the business cases for virtualized CPE functions.

The latest Heavy Reading Insider, Virtual CPE: Virtually Ready to Cut Costs, Drive Revenue & Disenfranchise Vendors, examines the state of development of CPE virtualization, exploring the benefits, potential timelines for adoption, and solutions available from selected leading players in the enterprise and residential CPE markets.

— Simon Sherrington, Analyst, Heavy Reading Insider


Virtual CPE: Virtually Ready to Cut Costs, Drive Revenue & Disenfranchise Vendors, a 20-page report, is available as part of an annual subscription (12 monthly issues) to Heavy Reading Insider, priced at $1,595. This report is available for $900. To subscribe, please visit: www.heavyreading.com/insider.

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
RMersh
50%
50%
RMersh,
User Rank: Light Beer
5/8/2014 | 2:00:36 PM
Re: Revolutionary
Possibly, but truck rolls are not just an issue of the CPE. And of course reconfiguring CPE is already being done via TR-069, but yes NFV could have some very good impacts on CPE and the provision of services. The BBF is already working in the area of the virtual RG both for business and residential. You check the work in progress at: www.broadband-forum.org
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
5/5/2014 | 2:26:24 PM
Revolutionary

NFV is going to have a huge impact for the positive on CPE. Carriers will be able to reconfigure customer equipment on the fly in software without having to roll trucks, and offer benefits such as 30-day free trials that today are economically impossible. 

"There have been debates for years about whether customer premises should have thin-client devices or multi-purpose devices capable of running many complex applications."

Interesting perspective. Certainly the success of webmail and other apps suggests that thin clients should be reasonable for all but the most complex business uses. 

 

More Blogs from Heavy Lifting Analyst Notes
Enterprises increasingly realize that in order to run their businesses economically they need to fundamentally change ways in which they operate their businesses in the connected IP world.
There's plenty of activity in the emerging G.fast broadband technology sector, but will it come to anything?
Here are some steps that service providers could take to boost the reach, awareness and success of their multiscreen video ventures.
Telecom operators are deploying new technologies in their data center environments to reduce costs and increase revenues.
The cloud debate has moved on to the network capabilities needed to meet customers' demands, with SDN and NFV at the heart of discussions.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (0) comments


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With YuLiao

10|30|14   |   6:27   |   (0) comments


Yu Liao, chairman of the Chinese Association for Renewable Energy in Germany, discusses the role that ICT solutions play in helping to grow renewable energy resources in Germany.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview

10|30|14   |   2:54   |   (0) comments


Sifang has been working with Huawei on several projects. JingTao Wu, Assistant President of Beijing Sifang Automation Co. Ltd., believes that the cooperation with Huawei can facilitate Sifang's process of internationalization.
LRTV Huawei Video Resource Center
A Better Connected Smart Grid: Powering Laos

10|30|14   |   5:38   |   (0) comments


Representatives of Electricite Du Laos (EDL), a state-owned corporation, discuss the importance of ICT solutions in serving their country's energy needs.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Junwei Lu

10|30|14   |   4:50   |   (0) comments


Professor Junwei Lu of Griffith University Australia describes his work with micro grid technology and the future of the power industry.
LRTV Documentaries
The Next-Gen Network Disconnect

10|29|14   |   01:23   |   (2) comments


There's a lot of talk about making networks more simple with SDN, NFV and next-gen broadband technology – but what about the complexity of introducing such capabilities?
LRTV Custom TV
Grow Your VPN Service Revenue

10|27|14   |   4:00   |   (0) comments


Watch how CSP product managers can better differentiate and maximize the value of their Internet, VPN and cloud services for business services customers, by adding premium application performance visibility to their data services.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed