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Telcos Must Build from the Basement, Not the Roof, with NFV

By Erik Linask June 26, 2015

The emergence of cloud computing and virtualization technologies, in addition to offering network operators and enterprises opportunities to improve their operational models, has also spawned a very significant startup community around them. That significance is not only the size of the startups, but also the building blocks many of these startups are using, which will further help drive business operations for their users through the adoption of NFV and other emerging solutions.

I discussed the opportunity NFV presents for operators with one of these startups, UBIqube, which has developed a vendor agnostic, multitenant service orchestration software. CEO and Chairman Nabil Souli explained why the right starting point is critical for any network operator looking to migrate to NFV and why the right elements – including orchestration technology – will ease the migration path to NFV.

NFV adoption seems to be increasing. Why?

I think it’s a combination of maturity of the technology now available (significant funding and effort was poured into that in the past two years) and, on the demand side, the pressure felt by telcos to improve the bottom line through both cost reduction and service innovation (cloud services in the enterprise space, for instance). The introduction of NFV technologies addresses these challenges. However, we feel that the real adoption is happening more on the edge of the network. 

What is the first thing a carrier should do before moving to NFV?

They should make sure the basement is built before they think about putting the roof on. In virtualization, the basement is multi-vendor orchestration. If a telco selects an NFV solution that is vertically tied into one vendor silo, it will lose the value of what virtualization is supposed to bring to the table (i.e., vendor independence to achieve better prices and innovation). 

How does SDN play in the move to virtualized, software-based solutions?

We see SDN as an alternative to proprietary networking devices, either in the datacenter and the network edge (CPE), rather than in core infrastructure, where it is more an anecdotal hype than a proven business option. 

In the edge, as VNFs are distributed in different locations (e.g., CO, data center, customer premises), SDN technologies can do the routing and switching between all the components without the need for dedicated routing hardware.

How should a CSP approach the move to NFV – one function at a time, all at once, or something in between?  What defines the strategy?

We believe the ability to better negotiate network vendor pricing will provide revenue gains that outweigh the gains from streamlined operations and/or new service rollouts prone to high price erosion because of competition. Hence, the first move should be towards any part of the network where splitting the functions helps keep vendors from having a ‘God Box’ and to play more honestly. A typical example is the CPE business where a broad spectrum of VNFs are sourced from different vendors and integrated into one box (routing, firewall, VoIP, etc.). The cost of that solution should dramatically drop for the Telco. 

What are the biggest pitfalls/challenges to be aware of when virtualizing network functions?

To go from a single-vendor legacy network to a single-vendor virtualized network. Nothing would have changed then and the money would still go to the same pocket.

What is the biggest hidden benefit?

Freedom of vendor and function choice.

What about the cloud? How important is it for the carrier of the future?

The cloud is vital. Ultimately, plumbing could become a minor portion of a provider’s revenue, while value-added services over that connectivity could drive revenue. Moving to cloud-based technologies is the only way to do that. If they don’t, Amazon, Google, Facebook, Microsoft and others will.

How are operators rationalizing their move to NFV?

It’s a little difficult to answer this one, as we are still going through a hype turbulence zone. However, de-correlated signals indicate that the CPE space is the one that will catch real steam with operators in 2016. 

What should they expect from these changes, and will reality meet expectations?

As far as reducing their overall cost of technology and reaching higher level of vendor independence, I believe so. As far as providing better end-user experience when networks are consumed (cloud-like consumption), I believe so too. As far as dramatically reducing the human factor – OPEX cost in service production – this is beyond technology and I doubt this would be the primary benefit in the short term. 

Will 2015 become known as the Year of NFV?

Image via Shutterstock

I think it will be 2016, not 2015 (mainly a year of trials and POCs). But, 2016, with NFV in the edge of the telco network, will generate real revenue for the entire ecosystem. Anything in the core will take much longer and won’t lead to a dramatic change in the usual vendor suspects involved (the same big names will play again and protect their margin/price levels).

Edited by Dominick Sorrentino

Group Editorial Director

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