Have you spoken with a senior service provider executive lately? If you have, you probably know that in their search for new sources of revenue and cash flow, to quote the old axiom, service providers are stuck between a rock and a hard place.

The rock? Competition for capital. Service providers are typically facilities-based operators, a capital-intensive undertaking if ever there was one. Investment opportunities including datacenters, expansion of fixed-line and wireless networks, and global growth are vacuuming up free cash flow.

Unfortunately, investors in search of safe havens are seeking to tap that very same flow of cash in the form of dividend payments. In our stagnant economy, investor expectations for cash distributions compete directly with service provider product and facility plans for operating capital.

The hard place? Competition for customers who demand service responsiveness at least as good as their daily experience with broadband and consumer-oriented, IP-enabled devices like the iPhone and iPad. As a society, we've grown accustomed to getting what we want when we want it, typically measured in seconds (texting), minutes (online shopping) and days (at-home delivery). These services work so well because they are built on new, cloud-centric systems and tied into wireless networks that have been the focus of billions of dollars of ongoing capital investment.

At the other end of the spectrum is our work experience, which in many cases is decidedly old-school. Salesmen still call, contracts are stacks of paper, service provisioning can take weeks (or months), and service portals take a back seat to investments in fiber and floor space.

Who's stuck in the middle? Service provider customers, IT departments, and product experts each have a chair in this particular purgatory. Customers generally have a good understanding of what they would like to buy, and service provider IT and product teams generally know how to build it, but they are forced to work within a bewildering array of legacy systems that are the result of the past 20 years of acquisitions. In the world of service providers today, even the most minor change is a multi-year, multi-million dollar project, competing with other projects just like it.

This is where software-defined networking (SDN) and network functions virtualization (NFV) come in. To paraphrase Winston Churchill, SDN may not be the beginning of the end for legacy system architectures at service providers, but it has the potential to be a huge step towards a much more responsive and relevant future for core systems.

What does that future look like? I think it has to be a future where systems are engineered for service flexibility, fed by a thriving ecosystem of vendors competing on feature set, not just financial mass, and innovation is enabled, not inhibited by core systems.

With all that said, three things that make SDN important are:

So, SDN is a cool technological approach, but there's a larger strategic point to be made. The promise of SDN, NFV and related initiatives is that in "decoupling the network control from forwarding," they may enable service providers to peel apart the stack of applications that make service providers what they are. In the process, we should end up with new systems that are designed to give equal weight to extensibility (via common languages, tools and documentation), and interaction with other business systems (via standard APIs and service strategy).

— Dennis Brouwer, President, The Brouwer Group