NFV: Changing The Pace Of Carrier Services

It's slower than a snail and as exciting as watching paint dry or grass grow. That's "carrier time" -- the cycle for creation and rollout of new telco features, functions, and technology. Carriers are deliberate and risk averse, which leads to a slow and plodding pace for new service delivery, especially when viewed through the prism of today's turbo-charged competition from Internet players.

Today's Internet-paced marketplace, with competition from nimbler content providers without the carriers' legacy technology, infrastructure, and regulatory environment, is changing the pace of change. In response, telcos are beginning to embrace the need to accelerate the development and deployment of innovative service offerings. A key driver in that acceleration is network functions virtualization (NFV).

NFV is poised to unlock innovation and accelerate every aspect of carrier offerings, from the backend to new customer-facing services that will boost profits and differentiate each telco's offerings. Most importantly, NFV can turbo charge the snail. We are likely to see "carrier time" be redefined from a decade-long timeline to a year or even shorter. That's a revolution for the telecommunications industry, and one that will improve business for equipment makers and enterprises.

Enabling service deployment
NFV implements functions typically provided by dedicated hardware -- such as load balancing or security firewalls -- in software, using standard IT virtualization technology. NFV can help service providers reduce both capital and operational expenditures and raise revenue. When talking about NFV, equipment makers often focus on its potential to reduce costs and increase revenue. What they discuss less frequently, however, are the specific details of how NFV can help telcos design, test, and roll out new services quickly.

In a typical service-provider environment, say that a telco wants to offer an innovative new service. The service provider must carefully design that offering and prepare to purchase the hardware necessary to offer that service. In some cases, that hardware may already exist; in other cases, perhaps the carrier needs to work with hardware makers to design or customize the product.

As you can expect, it can take months or years simply to determine what is needed. After that will come tests, purchase orders, manufacturing, testing, and training… and then installation in the service provider's data centers or co-location facilities. Then, and only then, can the service provider begin to market and sell the offering and sign up customers -- for whom the new offering must be provisioned.

Speeding time to market
That's a lot of steps and a lot of time. Given the scale of carrier operations, of necessity this is an incredibly slow and deliberative process. It's also a risk process; while the years go by, markets change, economies shift, new players enter the market, and technologies evolve. Sometimes the newly deployed hardware is down-level, or possibly obsolete even before the first customer has signed on the dotted line. You can see why "carrier time," the cycle for rolling out innovations, is measured in years.

Not all new carrier offerings require dedicated hardware, of course. Service providers want to offer their enterprise customers better administrative tools, faster provisioning, on-demand provisioning, and tighter integration of the carrier's network with the enterprise network and cloud providers. Business customers are interested in security-as-a-service, as well as improved connectivity and manageability for mobility users and the Internet of Things.

Residential customers are looking for lower costs, greater flexibility, access to compelling content and services like voice-over-IP, home security, and, again, mobility. Mobile customers are everywhere, some wishing to bundle mobility with home or business services, and others wishing to engage on a standalone basis. Meanwhile, carriers would like to differentiate their offerings beyond bandwidth, service-level agreements, and price points.

NFV has the potential to ignite innovation in all these areas. Programs or applications can be written and changed faster than dedicated hardware can be engineered, and it's faster (and more effective) to deploy or redeploy resources by starting a virtual machine than to install a hardware appliance. Thanks to NFV, the provisioning of customer services could take place in a matter of minutes or seconds. Try that with many of today's carrier offerings, where provisioning can take days or weeks or more.

Custom, better services
What's more, because NFV-based carrier applications run in multitenant virtual machine environments, the creation of customized offerings can also take place in a matter of a few weeks. Testing can take place in virtual environments, rollouts can be remote, and updates can be installed -- or rolled back -- in seconds.

All this may sound matter-of-fact to anyone used to enterprise data centers or the world of cloud computing, where technology can roll out in "Internet time" -- that is, very fast. It may sound fantastic to anyone in the service provider world, where "carrier time" almost always means an innovation cycle that takes several years.

NFV is in its infancy. It's only about two years old, and it hasn't had any significant impact on carrier networks yet. Over the next five years, however, you should expect NFV to reshape every vendor's revenue profile, leading to a pricing structure that is based on value-add and software, rather than on hardware, ports, or bandwidth.

The adoption of NFV by carriers and enterprise customers will be a long-term process, and the next five years are only the beginning. The transition from hardware-based network to virtualized NFV-driven networks may take decades -- that is, it will still be on "carrier time." However, the payoff for customers will be that, once the new technology is in place, innovation will speed up from "carrier time" to "Internet time." That will represent an exciting future for the entire service provider industry.