PARIS -- MPLS/SDN/NFV World Congress -- Insisting it does not want to become a "dumb, bit-pipe provider," Germany's Deutsche Telekom has said one of its main reasons for adopting software and virtualization technologies is to fight the webscale companies in the market for digital services.

The remarks are important in light of recent debate about the service role that operators will play in future, with SDN and NFV seen by some as a way for telcos to become more efficient bit pipes. (See Technology Won't Save the Telcos.)

Others are still drawing attention to the cost-saving attractions of the so-called New IP technologies -- something Deutsche Telekom, along with a few other major telcos, is now keen to play down.

The German incumbent is currently building a pan-European all-IP network across a number of markets in central and eastern Europe. By introducing SDN and NFV technologies into the mix, it hopes to shorten the time it takes to bring new products to market. (See Deutsche Telekom Turns On Pan-European IP.)

"We have fairly long lead times and the Internet companies are using software-based production and have short market lead times and can take products off the market very quickly," said Axel Clauberg, Deutsche Telekom AG (NYSE: DT)'s vice president of aggregation, transport, IP and fixed-access architecture, during a service provider debate here in Paris.

By contrast, it can sometimes take operators as much as a year to introduce new services, according to Clauberg. Moreover, unpopular products are sometimes left to fester as service providers wait for hardware to depreciate.

"We are in some areas competing with Internet companies and don't want to be the dumb, bit-pipe provider and we need to play the game with the same tools," Clauberg told conference attendees. "We can't stay in the stone age while everyone around us is using laser weapons."

During trials across Croatia, Hungary and Slovakia, Deutsche Telekom claimed to have been able to provide some basic network services in just a fraction of the time that was previously possible thanks to its investments in all-IP technologies.

At this year's Mobile World Congress, the operator said that from the third quarter of this year it would begin providing commercial email services in 11 countries from a single production facility in Budapest, Hungary. An advanced VPN service for business customers will be added in the fourth quarter. (See DT Plots Pan-Net, 'Answers' B2B OTT Threat.)

"There are clearly opportunities for multinational operators to change the way services are produced," said Clauberg in Paris.

To find out more about communications service provider virtualization and transformation strategies, visit the Big Communications Event (BCE) in Austin, Texas, May 24-25.

The network-as-a-service agenda
Other service providers gathered at the Paris conference appear to have similar ambitions. "Competing with OTT [over-the-top] providers requires some changes to the way operators are constructing and operating their networks," said Maria Napierala, a lead member of AT&T Inc. (NYSE: T)'s technical staff. "NFV and SDN is the way forward for the entire network."

Service providers generally are increasingly talking about the concept of "network-as-a-service," with greater automation allowing customers to configure network elements and order new features over the Internet.

France's Orange Business Services (OBS) has been carrying out trials of this kind of network-as-a-service offering on a select number of small and midsized enterprises. Earlier in the week, Stephane Litkowski, a network architect with OBS, told conference attendees the operator was now ready to move to a much larger-scale deployment this year. (See Orange Plots Wider Rollout of NFV for SMEs.)

Speaking to Light Reading on the sidelines of the Paris event, Litkowski said the ultimate objective was to make these on-demand offerings available to multinational corporations.

"Today, all of our business customers want to be able to manage their own connectivity, security, quality-of-service policies," said Francois Bertret, the SDN/NFV transformation program director for parent company Orange (NYSE: FTE). "We don't have enough tools to provide portals to be able to manage all these kinds of policies, and so SDN and NFV will be a key enabler to move forwards with this digitalization."

Regarded as something of a pioneer in the SDN and NFV community, especially regarding its development of a virtual CPE (customer premises equipment) offering, Colt Technology Services Group Ltd is similarly looking to offer more services in a self-service, on-demand fashion, according to Mirko Voltolini, Colt's vice president of technology and architecture.

"The same service will be available but automated and through a self-service facility, which opens up opportunities for fast provisioning," he said during the service provider debate. "Customers can upgrade or downgrade the bandwidth, for example."

Colt launched an on-demand version of its DCNet data center interconnectivity offering last October as part of its broader Novitas transformation program. At the time, the operator indicated it was looking to provide its LANLink and dedicated cloud access services in the same on-demand way. (See Colt Launches SDN-Based Data Center Offer.)

Next page: Towards a white-box future

Towards a white-box future
But while service agility and flexibility appears to be rising up the SDN and NFV agenda, operators have been attaching less importance to the cost-saving part of the equation.

"It's important to understand differences between the IT world, where there are impacts of virtualization that lead to immediate cost savings, and the network world, where that is not the prime target," said Deutsche Telekom's Clauberg.

France's Orange has gone even further, arguing outright that "SDN and NFV are not about savings" during a recent discussion with Light Reading. (See Orange Sours on Cost Benefits of NFV.)

US-based Verizon Communications Inc. (NYSE: VZ) has also changed its thinking about the main drivers of network transformation. "We all started down the capex savings path and then realized there is probably more value in new service creation," said Chris Emmons, the director of SDN planning and implementation for Verizon.

Nevertheless, Emmons reckons the balance could tip back towards cost savings in future as the phenomenon of white-box networking gathers momentum.

By introducing virtualization technologies, and disaggregating software from hardware, service providers should be able to save money by investing in commodity, bare-metal servers -- so-called white boxes -- as opposed to dedicated hardware.

"We definitely see value in that and think it will force equipment vendors to innovate more on software," said Emmons. "There is a lot of work going on now in this area and we'll definitely see a push towards that."

AT&T has also recently highlighted the attractions of white-box networking, with chief technology officer John Donovan arguing it will have a bigger impact on service providers' businesses in the next decade than other high-profile communications technology trends. (See White Box Is the 'Big Prize' – AT&T's Donovan.)

— Iain Morris, , News Editor, Light Reading