By now, it’s probably a safe assumption that regular readers of this blog are more than familiar with the many benefits that Network Functions Virtualization (NFV) promises to deliver for telecom service providers (and if you’d like an introduction, this page would be a good place to start).
Good attendance at the April ETSI NFV meeting in Santa Clara, as well on-going participation in the various working groups that are hammering out technical details, certainly seems to confirm strong interest not only from the service providers who started the initiative in late 2012, but also other ecosystem stakeholders such as network equipment manufacturers, system integrators, software companies and processor suppliers.
In terms of the business benefits of NFV, most of the discussion to date appears to be around saving money. Significant CAPEX and OPEX savings are expected through the virtualization of functions that have traditionally been implemented as stand-alone, dedicated, fixed-function equipment.
One use case that’s frequently discussed is a “virtual CPE”, with an architecture that relies on a very simple CPE (modem, switch and antenna) with all services relocated to virtual network appliances on a central server. Another example is the cloud RAN (Radio Access Network) concept, in which the eNodeB at the antenna is replaced by a low-cost Remote Radio Head, with digitized RF data backhauled over fiber to a centralized Baseband Unit pool in which the baseband processing is performed. Finally, Evolved Packet Core (EPC) functions for mobile networks can be run as Virtual Network Functions (VNFs) in Virtual Machines (VMs) on generic server platforms.
From the perspective of the service providers, though, top-line P&L growth ultimately comes from making money, and specifically from increasing their Average Revenue per User (ARPU).
Increasing ARPU means extracting more money from subscribers, both enterprises and also consumers like you and me. In fact a recent study by Infonetics “SDNs, 40G/100G, and MPLS Control Plane Strategies: Global Service Provider Strategy, July 2013” indicated that 48% of carriers want SDN/NFV in order to “create network services not possible with existing technologies/protocols”.
So I think it’s interesting to speculate on what kinds of innovative and presumably valuable new services we can expect thanks to the massive investments that service providers will presumably be making in NFV. This subscriber-side view doesn’t seem to be a big topic (yet) at NFV events, but there were some relevant discussions at the recent SDN & OpenFlow Congress in Singapore.
Potential new services mentioned at that event included:
- Bandwidth-on-demand: Want to watch a really important sporting event on your laptop in HD for the next couple of hours? Just go to online to your service provider, select “HD quality”, specify how long you want it for and the network instantly provisions the necessary bandwidth and service chaining.
- Services-on-demand: Need Japanese-to-English translation on your tablet? Go online and request that service as soon as you hit the ground in Tokyo and it’ll be up and running automatically before you’re off the plane.
- Tiered security: How about if the network automatically configured its service chaining to route your traffic through security appliances appropriate to the content that you’re accessing? Maybe you need different security features in the chain for web browsing as opposed to a Skype session.
As the NFV network-level architecture details and deployment strategies firm up, so that the service providers have confidence about the new capabilities of the infrastructure, I’m sure we’ll see a lot more discussions about interesting new services that will raise our monthly bills as subscribers and boost the service providers’ top line revenue.
What are your thoughts on this? What new services do you see being introduced thanks to NFV that will bring real value to subscribers, whether enterprises or consumers?
At 6WIND we’re doing our part to boost the cost-effectiveness of the NFV network infrastructure and accelerate deployment of NFV solutions. Please join us and Red Hat for a webinar on June 25th “The first open software platform for network functions virtualization” to learn all about our initiative in this area. Click here to register.