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New Dell'Oro Group Study Offers Five-Year Outlook on NFV

By Paula Bernier November 13, 2014

Network functions virtualization is a hot new technology that the tier 1 telcos are embracing to enable them to benefit from industry-standard hardware rather than more costly appliances, and to move to more flexible and software-centric architectures. To help those interested in NFV get a better handle on what this technology is and where it is going, Dell’Oro Group has come out with a new study.

The NFV Advanced Research Report offers forecasts on what Dell’Oro Group expects for NFV over the next five years. It looks at revenue forecasts for NFV in various technology segments; talks about business models and financial implications for NFV; and delves into the technology itself, including discussions on which network equipment will be affected by it, how it will impact legacy networks, and how it relates to the open source movement.

NFV has been around for at least a couple of years. It got a big push at that point when a group within European standards group ETSI formed and issued a paper on NFV, expressing its members’ interest in adopting the technology. AT&T, BT Group, Deutsche Telekom, Orange, Telecom Italia, Telefonica and Verizon was the core group that kicked off the exploration of NFV with the goals of reducing equipment costs and power consumption, improving time to market of new services, enabling the availability of multiple applications on a single network appliance with the multi-version and multi-tenancy capabilities, and encouraging a more dynamic ecosystem through the development and use of software-only solutions.

Although NFV seems to be off to a great start, it signals a significant change for the big telcos, which have a long history of building very controlled and static networks with exacting requirements. So it will take time for the telcos and their suppliers to formulate solutions and strategies to enable the widespread move to NFV. That said, it should come as no surprise that Dell’Oro analyst and study author Shin Umeda believes it will be several more years before large-scale implementations of NFV occur.

Edited by Maurice Nagle

Executive Editor, TMC

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