NFV's Opex Gains Need Not Be Delayed

Column Leo Zancani, CTO, Ontology 7/18/2016

The recent Spring 2016 update of Heavy Reading's Future of Virtualization Index (available to all registered users of the Virtuapedia) raises some interesting questions about the underlying economics of the "Great Virtualization" journey the telecommunications industry has embarked on. (See The New FoV Index: 5 Takeaways.)

The two main principles of the business case for NFV have always been operational expenditure (opex) savings and, much more nebulously, "service agility" -- a promise that NFV would make communications service providers (CSPs) able to properly field market challenges from OTT players, whose traffic they still famously struggle to monetize.

The latter is, of course, the real prize, because ultimately CSPs have little choice: They have to find a way to compete in the evolving market and NFV is, in many ways, the only show in town. The former, however, is quantifiable and is where the requisite justification for executives to actually act is expected to come from.

The apparently worrying signal in Heavy Reading's data is that, based on what's been done to date, opex savings would appear to be significantly delayed: That, in turn, casts a shadow over the viability of the huge investment required to get to the high-automation end-state of the NFV vision, where service agility allegedly dwells.

According to the report's author, Roz Roseboro, the delay in expected savings is "probably because they [CSPs] will have to essentially run parallel networks," which comes with the consequent need to keep running and maintaining existing OSS and BSS systems, at the same time as spending on new capabilities. (See Could Delayed Opex Savings Slow SDN/NFV?)

Operators now openly acknowledge that, realistically, NFV deployment now looks like a four-step process:

This process looks -- despite the protestations of many industry voices -- very much like an evolution towards the NFV vision, rather than a discontinuous switchover.

One fairly obvious way to pull back the escaping operational savings is to increase the frequency and granularity at which value can be unlocked along that evolutionary journey, but this is difficult to do when each transition along the way is impeded by substantial retooling, large transformation projects and is thought of as a distinct project domain.

However, next-generation tools now exist, across the spectrum of OSS and BSS functionality, that are quite capable of operating in all three modes -- traditional, hybrid and high-automation -- removing the technical impediments.

In fact, immediate business value is available in the operational savings, reduced churn and improved revenues offered by the lower cost and risk associated with these tools. Indeed, many large operators are already using them as they pursue service-centric operations and turn their NOCs (network operations centers) into SOCs (service operations centers).

It means moving away from the safe but sclerotic legacy tools, architectures and operational doctrines, but this is surely worthwhile if it offers a way to restore the opex savings runway for faster innovation and more competitive services?

— Leo Zancani, CTO, Co-Founder, Ontology Systems