Thursday, October 16, 2014

SDN, NFV Seen Boosting Revenue Potential, Reducing Capex

A survey of global service providers suggests that software defined networking and network functions virtualization is seen as valuable as a means of enhancing revenue and reducing capital cost.

A study conducted by Infonetics Research found that “service agility,” the ability to quickly add, drop and change services and applications was viewed as an enabler of revenue.

At the same time, NFV functions were seen as a way to reduce capital spending in the network.

(SDN tends to be term of art for data center personnel, NFV tends to be the term of art used by a growing number of service providers)

The study by Infonetics Research suggests 29 percent of respondents already have plans to deploy SDN or NFV solutions for mobile backhaul networks, for example, to gain flexibility and achieve cost savings.

Respondents suggest they might shift as much as 20 percent of backhaul traffic from the macrocell network to small cells of some type by 2018. And it is those new network elements where one might expect SDN or NFV deployments to happen, as adoption will not require displacing existing network elements or systems.

Ranked on a scale of one to seven, where one is “not important” and seven represents something “very important” for producing new revenue, bandwidth on demand was rated important by about 58 percent of respondents, who gave that value a score of six or seven.

And service providers see advantages in both the consumer and business customer segments.
Businesses can get more bandwidth, instantly,  if they expect an uptick in web traffic or host a videoconference or must support seasonal shopping traffic peaks.

Consumers could be offered instant “turbo” boosts when they are watching videos, and then scaling back down when they are finished.

As you would expect, service providers believe that dynamic bandwidth policies could create an opportunity for dynamic pricing, or at least dynamic provisioning of bandwidth to priority or high-value customers, as well.

About 52 percent of respondents saw that as a value provided by NFV and SDN, the study suggests.

About 48 percent of respondents saw value in “elastic service chaining,” which allows processing of different services to scale out when needed and scale back in when not required.

A similar percentage saw SDN and NFV as helpful for creating, selling and supporting virtual managed services.

Scaling services up or down quickly was rated six or seven by 86 percent of respondents asked about NFV. That was seen as an advantage for introducing new services quickly, by about 69 percent of respondents asked to rank their interest in NFV.

Also important: the ability to test new services on a small group of customers before expanding for wider commercial availability, modify the service and give it another try, or scrap services without too great an investment if it’s not working out.

Operationally, respondents valued the “global view” of the network across multi-vendor networks and multiple layers.

That is believed to offer more granular control of resources, which in turn will allow networks to be operated more efficiently, reducing capital investment.

Spectrum Futures 2014

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