Is NFV The Answer?

Network QuestionIn a recent blog I suggested that NFV was hotter than SDN, and pointed out how impressed I was with the European Telecommunications Standards Institute (ETSI) Industry Specifications Group for Network Functions Virtualization (NFV ISG) and the nine Proof of Concepts (POCs) that they were sponsoring.  Since I wrote that blog, the number of POCs has increased to nineteen.  Given all of that, I may seem like a bit of a hypocrite if I now ask whether or not NFV is really the answer to the challenges facing service providers.

Marc Cohn of Ciena recently wrote a great blog on the near-term future of NFV.  As part of that blog, Marc commented on the recent meeting that the ETSI NFV ISG held in Okinawa, Japan.  As he stated in the blog “The 260+ participants at the meeting are intent on transforming the entire telecommunications industry, and could change the world like other telecommunications revolutions through the decades.”

Marc is clearly correct in terms of the impact that NFV is likely to have on how service providers deploy their infrastructure.  My concern is that service providers are facing some very dramatic challenges and making their infrastructure more nimble is absolutely critical, but only a small part of the solution.  One example of the challenges facing service providers is provided by Whatsapp, which was recently acquired by Facebook.  To put this acquisition into perspective, Facebook spent US $19 billion to acquire Whatsapp, which is roughly sixteen times what VMware spent to acquire Nicira.  The reason this acquisition is important to service providers was highlighted in a report by Ovum, which stated that the over the top (OTT) social messaging applications such as Whatsapp cost network service providers US $32.5 billion in lost SMS revenues in 2013 — losses that are predicted to reach US $54 billion by 2016. Additionally, in 2018, OTT VoIP providers will have cost the global telecoms industry $63 billion in lost revenues.

In June 2014 I moderated a two hour C-Level discussion at the TM Forum Live! Conference in Nice, France. The subject of the discussion was how service providers could transform to become a digital business, and the C-Levels in attendance were in general agreement that there were four key pillars that defined what it meant to be a digital business:

1) Customer centricity, or the need for any business, including service providers, to take an outside-in view of customers whereby they look at the world from the perspective of the customer and develop products and services accordingly.

2) Business agility and rapid innovation, which includes the ability to effectively partner with a variety of companies.

3) Operational agility and effectiveness, including both simplifying and automating key processes.

4) IT and data centricity and agility.

There is no doubt that NFV will help service providers have a more agile IT infrastructure to support that fourth pillar.  There is also no doubt that IT agility can also be improved by massive simplification of the infrastructure and aggressively adopting a DevOps model.

So the answer to the question of whether or not NFV is really the answer to the challenges facing service providers depends on how you define those challenges.  If you focus just on the agility of the infrastructure, then NFV will likely go a very long way towards making a service provider’s infrastructure more agile.  NFV, however, is just one small but important piece of helping service providers respond to the broader challenges they face, such as those brought about by the OTT players.

About the author
Jim Metzler
Jim has a broad background in the IT industry. This includes serving as a software engineer, an engineering manager for high-speed data services for a major network service provider, a product manager for network hardware, a network manager at two Fortune 500 companies, and the principal of a consulting organization. In addition, Jim has created software tools for designing customer networks for a major network service provider and directed and performed market research at a major industry analyst firm. Jim’s current interests include both cloud networking and application and service delivery. Jim has a Ph.D. in Mathematics from Boston University.