Dynamic bandwidth service capabilities like bandwidth-on-demand will not necessary translate to additional, new near-term revenue for service providers, according to a recent Heavy Reading Insider report.

That notion might come as a surprise to service providers investing in software-defined networking (SDN) and virtualization capabilities. However, the report, "Cloud Boosts Demand for Dynamic Bandwidth," also finds that other benefits of bandwidth-on-demand, such as the ability to provide guaranteed bandwidth and predictable bills, make it an effective customer loyalty tool. Also, dynamic bandwidth capabilities are likely to become more of a future requirement for service providers in increasingly virtualized environments.

"Carriers will need to invest in dynamic bandwidth to keep the loyalty of customers they already have and attract more in an environment in which it is increasingly viewed as a virtual requirement, especially in relation to the cloud," writes report author Steve Koppman.

Even though bandwidth-on-demand may not directly promote new revenue, Koppman noted in his Heavy Lifting Analyst Notes recently that the cloud connection should continue to promote carrier investment in dynamic bandwidth capabilities in the next three to five years.

The report also analyzes different dynamic bandwidth models, making comparisons between the usage-based billing models many service providers have attempted and newer approaches for bandwidth-on-demand, and provides status reports on many carriers that are exploring flexible bandwidth capabilities to varying degrees.

— Dan O'Shea, Managing Editor, Light Reading