NFV Applications NEWS

NFV's Top Use Cases Full of Promise

By Tara Seals February 05, 2016

Enterprises and service providers alike are interested in network functions virtualization (NFV), with business cases beginning to coalesce. However, it remains to be seen whether NFV can deliver on its promise.

According to SDxCentral research, there are three main applications for NFV: Saving money on hardware; saving money on operations; and driving new revenue faster. While NFV does have potential to do it all, but proving out its revenue acceleration capabilities will be key to adoption, according to the research.

“The first two are quite complicated and still unproven in terms of ROI, but the last one is promising and may become the most important because of the thirst for revenue growth,” said Scott Raynovich, vice president of content and research at SDxCentral. “If you had to choose a technology that could deliver savings on operations and capex, or a technology that could deliver revenue faster, it’s likely that company leadership would favor revenue growth.”

In the firm’s 2015 NFV Report and 2015 Virtual Edge Report, it showed that revenue acceleration will be crucial for the traditional service provider community to adopt NFV, as they struggle to compete with new digital services.

“They were beaten in the content arena by the over the top (OTT) content providers and in the data-center market by the cloud platform providers,” Raynovich said. “With growth in mobile services slowing, the service provider market needs to find a way to introduce new services, or at least improve existing services while lowering operational costs.”

Enter NFV, which will in turn allow them to deploy things like software-defined security and software-defined wide-area network (SD-WAN) optimization services. Other top use cases include secure cloud broadband (branch office access); cloud application acceleration on the data center side; policy control; and mobile enterprise connectivity.

“NFV technology looks like the leading candidate to deliver such services, which could increase the average revenue per user (ARPU) in both the business and consumer markets, but the service providers will have to move fast to build a cost-effective infrastructure if they want to avoid being beaten to the punch by cloud providers and even large enterprise technology vendors offering their own cloud services,” Raynovich said.

He also said that full NAAS holds promise, where the the cloud service provider (CSP) or telecom service provider has built an entire network, including local points of presence (POPs), to provide a wide range of network functionality that may include secure VPN, data or network encryption, intelligent routing, WAN optimization and traffic optimization. A service provider or enterprise might use vCPE and SD-WAN technology to build an extensive network of cloud-based services, with NFV.

“All of the areas and use cases mentioned have the potential to be delivered in a cloud model using NFV,” Raynovich said. “It’s been proven in recent years that enterprises are interested in buying services and applications from the cloud and are increasingly moving in that direction. Most enterprises use public (67%), private (60%) and hybrid (33%) cloud services.”

Edited by Maurice Nagle

Contributing Writer

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