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Network Functions Virtualization is Going to be Huge

By Rich Tehrani June 13, 2013

This originally appeared on Rich Tehrani’s Communications and Technology Blog.

The move from proprietary hardware to software running on commercial off-the-shelf servers at the world’s telcos is one of the biggest transformations we will see this decade. Over time, we can expect to see a number of network functions which used to be supplied by hardware vendors through proprietary boxes turn into software running on servers with Intel or ARM chips, perhaps supplied by HP or Dell, running VMware or some other flavor of virtualization. The concept is called “Network Functions Virtualization” or NFV. I wrote about the concept a while back in a post Metaswitch Asks: Are You Ready to be a Software Telco? and more recently in NFV-Based Software Telcos Need OSS/BSS Interoperability.

NFV will be huge – for the carrier space it will be as big as the move from circuit switched to packet switched. Think about all the disruption – the opportunity and strategy shifting that took place as carriers upgraded their networks the last time and you’ll get an idea of what’s ahead. Expect a slew of new software vendors who are lean and mean and born in the cloud, to be competing with established players to provide best-in-breed solutions.

On the flipside, expect legacy players to evolve rapidly. In fact in another move from hardware to software – SDN or software-defined networking, it turns out Cisco has become the biggest beneficiary. They were supposed to be the biggest losers according to many but disruption doesn’t mean you have to lose, it means you have to adjust quickly or could lose share quickly.

I’ve had the opportunity to report from a number of industry trade shows recently and one of the interesting new entrants in the NFV space is LEMKO – the company has virtualized the mobile packet core at the edge of the network which runs on any radio device.

Lemko discusses NFV Solutions

Other well-known players are also playing in the space as you can see below.


HP Details their service provider virtualization (NFV) and other solutions (yes I slipped up the COTS acronym on "live" TV - ouch!)

NSN Discusses NFV and other solutions


Freescale Details Wireless, SDN and NFV Solutions

I was fortunate enough to be involved in the VoIP space early – TMC launched the first magazine in the space in 1997, Internet Telephony, and received a registered trademark for the term. We see the broad space of software telco as being as big a disruption to existing business models rife with opportunity and the potential to change the market share of a number of companies. We also expect a slew of new entrants in the space such as Affirmed Networks who has raised $51 million so far.

Simply stated, “software telco” describes the move from a carrier who provides services based primarily on proprietary equipment to one which uses software running on common servers whether they are based on Intel, ARM, AMD – whatever is prevalent in the data center. In this manner, they can take advantage of all the benefits of virtualization and other important benefits. They can power down servers as needed during off-peak times to save electricity costs, they can burst to the cloud (public or private) as needed to handle spikes in traffic, and more.

We believe the defacto industry gathering place for the market will be Software Telco Congress which takes place Nov 19-21, 2013 in Santa Clara and we have received a number of requests for a companion website. Our answers are the sister sites SDN Zone which focuses on software defined networking and the newly launched NFV Zone which focuses on network functions virtualization.

We are excited to have you participate in our new sites – post comments, share the articles and we hope to see you at our upcoming events. I just announced today that I will moderate a 
software telco panel at ITEXPO on Thursday, 8/29 at 1PM and I would love to see you all there as well.

Edited by Stefania Viscusi

CEO, Group Editor-in-Chief, TMC

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