NFV Home

US Telcos Move Ahead on NFV as Europe Watches: 2017 Predictions

By Special Guest
Pravin Mirchandani, CMO at OneAccess
December 20, 2016

While huge progress has been made this year toward the development of virtualized services, a variety of challenges remain before widespread service roll-out can commence.  2017 will be the year that the industry takes positive steps to overcome these barriers, says Pravin Mirchandani, CMO at OneAccess Networks, who shares his five key predictions for the year ahead.

1. Europe will stay on the sidelines as USA and Japan push on

We will see virtualized services start to roll out, principally in the USA, and to a lesser extent in Japan through NTT. While everyone remains sure that the way forward is virtualization, the industry is still figuring out how to solve the multiple technical, commercial and organizational challenges posed by migration.

Operators will be closely watching AT&T and its Domain 2.0 program and keeping an eye on Verizon too, in a bid to learn lessons about how to implement NFV. Europe’s hard-pressed operators, in particular, will mostly stay parked in ‘watch and learn’ mode, continuing with RFx, proof of concepts and trials. In fact, we’re unlikely to see any virtualized services roll out across Europe in 2017. Compelling business cases are harder to assemble in the European continent and, until these are squared away, operators will prefer to observe how U.S. and Japanese trail-blazers facilitate service migration and preserve their choices – both major factors driving current and near-term investment decisions.

2. NFV’s ROI equation will need to be cracked

The industry will become increasingly focused on how to generate ROI from virtualization. White-box CPEs are still expensive, which restricts the size of the virtualized services market to the large enterprise sector, driven by the need to consolidate network appliances. Don’t be surprised to see much more interest in ARM-based white-boxes as a result.

CSPs will look at ways to use more cost-effective classical CPEs (or pCPEs) for delivering virtualized services in hybrid ways for the volume end of the market. The NETCONF-enabled classical CPE will rise in importance to both future-proof near-term service deployments and address the ROI issue for the volume part of the market.

Ultimately though, as operators work out how best to tackle ROI in the context of CAPEX pressures, far-sighted CSPs now have an ideal opportunity to capitalize and gain a competitive advantage on rivals.

3. CPEs will have the same focus, just a different colour

Whilst CPE service delivery will remain the key focus (as virtualized data centers have yet to solve the twin challenges of scalability and technology maturity), we will start to see a change in the color of CPEs during 2017.

2016 saw the launch of the first virtualized services based on grey-box CPE, a move that was seen by some as a compromise to enable quick gains in acquiring virtualization experience and show progress. In 2017, those operators that use grey boxes will push to introduce the purer white box CPE. The result will be the gradual roll-out of white-box CPEs to replace their grey siblings.

4. Improving IT wallet share

The main driver for new virtualized services at CSPs will be improving IT wallet share at enterprises, especially those that build their own networks.

By convincing their customers to take an operator-managed white-box CPE, this establishes a paid beach-head for the managed services model. Once there, it enables a relatively easy upsell for additional VNF-based managed services on the same box.

The first target services will be security and Hybrid-WAN. They offer the prospect of increased ARPU in the case of security and revenue protection in the case of Hybrid-WAN. Legacy voice and service assurance will also be needed as both will be necessary to sell a larger portfolio of managed services to enterprise customers. 

5. DevOps will thrive as it helps unlock virtualization’s potential

2017’s general industry trend will be DevOps as it is increasingly being seen as the next ‘big thing to do.’ Already extensively discussed as a concept, CSPs will move to implement it – this has as much to do with achieving greatly needed OPEX savings, which is a necessary condition for virtualization.

Nevertheless, virtualization will be the catalyst to shift away from the silo culture that exists within CSPs as they realize that introducing virtualization is too slow and too expensive if they rely on their traditional waterfall NPI process.

Edited by Alicia Young
Related Articles

Harnessing Pervasive Visibility to Unleash the Power of the Cloud

By: Michael Segal    11/9/2017

Cloud computing is having an unprecedented influence on companies throughout the world; according to research from BDO, an overwhelming number (74%) o…

Read More

Nokia Introduces SDAN Solution

By: Paula Bernier    10/10/2017

Nokia has unveiled a Software-Defined Access Network solution. This offering consists of cloud-native software, integration services, open programmabl…

Read More

Stating with Attestation, a Core Foundation of Computer Security for Sensitive Systems

By: Special Guest    10/3/2017

The European Telecommunication Standards Institute (ETSI) held their annual Security Week event and along with a representative from the UK National C…

Read More

Assuring Business Outcomes on Your DX Journey

By: Michael Segal    9/7/2017

When it comes to implementing strategies for digital transformation (DX), there are nearly as many methods as there are companies using them.

Read More

What is a Network Functions Platform?

By: Special Guest    8/21/2017

The Network Functions Platform is designed to provide enterprises, as well as MSPs and CSPs, with a seamless migration path towards NFV.

Read More