NFV Growth Potential in Emerging Markets

A new report by Developing Telecoms examines the role of Network Functions Virtualization (NFV) in emerging markets.

“This report examines the obstacles that face widespread adoption of NFV and SDN technologies given the current technological capabilities of networks in emerging markets, and weighs these against the future benefits that will be delivered by virtualization,” a Developing Telecoms statement said. “Many senior executives believe that emerging markets are as yet insufficiently technologically advanced to fully realize these benefits, while CSPs are further deterred by the extensive investment that will be required for deployments.”

NFV attempts to do for networking equipment what server virtualization has done for servers: let IT departments replace lots of physical machines with virtual ones, consolidate on a few physical servers. An NFV server might comprise a switch, a load balancer, intrusion detection program, and so on.

NFV has a lot of appeal to large carriers, who are looking to cut costs where possible while offering reliability as part of their SLAs. NFV lets them use fewer physical devices to do the same jobs, giving them substantial cost savings.

Smaller businesses might balk at NFV, since as with virtualization, it requires a higher up-front cost as they need beefier servers to handle the loads.

Paradoxically, Developing Telecoms sees a lot of opportunity for emerging markets. The simple reason is that emerging markets are still making decisions about the kind of networking infrastructure they’re going to have. If NFV vendors can target these markets before they develop loyalties to other brands, they can leapfrog their competitors.

A lot of the demand will come from mobile data, as more people turn to smartphones and tablets. Cellular Internet use is growing, especially outside of the U.S., and carriers both large and small are struggling to keep up. NFV looks like a solution to tame the complexity of cellular deployments.