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NFV-Enabled Services Gaining Traction: NTT Comms

Ray Le Maistre
7/15/2015
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Enterprise users are signing up to managed NFV-enabled services at an increasing rate, particularly in Asia-Pacific and the Americas, with many planning to adopt applications such as virtualized VPNs in the coming year.

European users are currently more cautious, according to the findings of an IDC study commissioned by NTT Communications Corp. (NYSE: NTT), but will adopt rapidly during the next two years.

IDC surveyed more than 200 "IT decision makers in the US, Europe and Asia who are responsible for the selection and purchasing of the companies’ telecommunications, wide area network (WAN), and internet services" in April this year and found that:

  • In Asia, 18% of respondents are already using NFV-enabled managed services, a further 42% plan to use some within the next year, and another 30% in 12-24 months, leaving only 10% that expect to wait more than two years.

  • In the Americas, 21.9% of respondents are already using NFV-enabled managed services, a further 34.2% plan to use some within the next year, and another 30.1% in 12-24 months, leaving only 8.2% that expect to wait more than two years.

  • In Europe, only 12.8% of respondents are already using NFV-enabled managed services, but a further 47.4% plan to use some within the next year, with another 28.2% signing up in 12-24 months, leaving just 5.1% that expect to wait more than two years.

Of the NFV-enabled managed services that the respondents expect to deploy, cloud-based SSL VPNs were most popular (selected by 63.5% of respondents), followed by virtualized/cloud VPN (55.2%) and cloud-based secure web gateway (45.3%). Virtual CPE branch office connectivity was selected by 36.5% of respondents.

Such services are growing in popularity in Asia, says Patrick Ng, executive VP of Global Network Business Division at NTT Communications Asia, who oversees business customers in Hong Kong, South Korea, Taiwan and Macau.

Enterprises are "very keen to migrate," he says. "Asia is a very fragmented market with lots of different regulations and infrastructures so it's very challenging for international companies to deal with lots of different rules, to get CPE to lots of different countries and to maintain a standard security policy. Cloud-based NFV-enabled services can enable consistency across multiple markets and helps to address concerns such as capex investments," says the NTT Comms executive.

Using more standardized, less proprietary CPE also "frees CIOs from many equipment end-of-life issues... replacement issues can be a problem."


For more NFV-related coverage and insights, check out our dedicated NFV content channel here on Light Reading.


Naturally NTT Communications wants to promote the benefits of NFV-enabled services because it already has services on offer in multiple markets and has developed a leadership position in virtualized cloud services in Asia following years of internal cloud and virtualization efforts and the acquisition of Virtela in early 2014. (See NTT Launches NFV-Based Cloud Services.)

And it's not resting on its laurels. The operator's senior management team recently announced further plans to acquire data center assets in Indonesia and further develop its "carrier cloud" strategy that integrates its network and data center infrastructure and uses SDN capabilities to enable more automated service provisioning via customer portals. (See NTT Comms Plans More M&A, Preps Next-Gen Cloud Platform.)

But there's still plenty of work to be done to get those willing customers signed up to NFV-enabled services. Ng declined to provide any details on customers that had already adopted NTT Comms' latest cloud-based services and confirmed that security and migration cost concerns were the main issues holding back the more reluctant enterprise users. But he says the development of NFV-enabled services is opening up new opportunities to branch further into the medium-sized enterprise market and stay ahead of the competition. "Not many carriers can offer the same level of cloud-based services as us. I believe we're quite ahead of the market," says Ng.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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Jason Phipps
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Jason Phipps,
User Rank: Light Beer
7/17/2015 | 11:15:03 AM
NFV
Third topic of conversation with most Enterprise customers today. 

1.  Virtualizing server\storage\apps

2.  Security

3.  Virtualizing network functions

Service providers who can engage their Enterprise clients on all three fronts will have a huge advantage as the IT decisions are becoming more interdependent.

 

 
KBode
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KBode,
User Rank: Light Sabre
7/15/2015 | 5:14:42 PM
Re: Surprising
I was surprised as well, but unlike other technology shifts, even heel dragging operations (like AT&T) seem to be getting out ahead of this.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
7/15/2015 | 4:13:28 PM
Surprising
I'm surprised to see adoption rates that high, given how new NFV is. 

But perhaps I should not be surprised. NFV is a clear value for enterprises -- more flexiblle, lower maintenance, and less expensive. Can't say no to that. 
DHagar
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DHagar,
User Rank: Light Sabre
7/15/2015 | 4:09:47 PM
Re: NFV Services Gaining Traction
Ray, interesting assessment.  It appears that Asia recognizes the need and is looking for operational solutions and the US recognizes the technology advantage and is looking for technical solution.  Any thoughts as to why the European markets haven't gained traction.
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