NFV in 2017: Opportunities and Obstacles for CSPs [ ebook ] NFV in 2017: Opportunities and Obstacles for CSPs
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1 NFV in 2017: Opportunities and Obstacles for CSPs [ ebook ] NFV in 2017: Opportunities and Obstacles for CSPs SevOne
2 NFV in 2017: Opportunities and Obstacles for CSPs Communication Service Providers (CSPs) provide the foundation for our rapidly changing digital economy. The networks they maintain ensure global connectivity, but they re facing unprecedented pressure from stakeholders and customers to innovate faster, accommodate disruptive technologies, and differentiate their offerings. CSPs are also facing competitive threats from organizations commoditizing their traditional services while the markets and their customers change at a relentless pace. CSPs are at the cusp of reinvention. They need to be able to move quickly to launch new services, meet customer needs, and innovate faster than the competition. Many believe that the key to achieving this new level of agility lies in moving away from rigid, aging network infrastructures and transitioning to Network Function Virtualization (NFV). NFV allows for agile and automated cloud-based deployments of network resources. NFV creates elasticity to dynamically provision and de-provision network resources on demand, empowering new projects and providing the much-needed agility that CSPs need to compete more effectively SevOne
3 Clarification of Terms: Network Function Virtualization Before moving forward, we want to take a second to clarify some of the key terms we ll be using throughout this e-book. Network function Any component of the network infrastructure that provides a specifically defined behavior or service, such as routing or load balancing. Network functions have traditionally been delivered as appliances, typically as software tightly coupled with proprietary hardware that needs to be manually installed. These appliances offer dependable performance but are often costly and create a host of operational challenges during any type of change or upgrade. Network function virtualization NFV describes the architectural approach of running softwaredefined NFs independent of any specific hardware platform, often using cloud-based, distributed compute resources. So, what market forces have led the way for NFV? What are the benefits of moving to NFV? What are the challenges? And how will CSPs manage the complexity of their constantly changing networks? We ll explore these themes in this e-book SevOne NFV in 2017: Opportunities and Obstacles for CSPs
4 Why 2017 is the Year of NFV The telecommunications sector is intensely competitive and relentlessly evolving, especially in the wireless segment. Before we get into the risks and rewards of NFV, it s important to cover some of the key market dynamics that CSPs are dealing with today. Service commoditization A handful of large CSPs have traditionally dominated the market, with high barriers to entry and limited competition helping them enjoy growing revenues and high margins for their services. But in 2017, the barriers to entry have diminished, and traditional differentiators, like network quality and available phone models, have largely evened out. Today price is often left as the meaningful differentiator, making it a commoditized and highly competitive market. Disruptive competition Technological advances have enabled new competitors with appealing services and disruptive business models to enter the market. The biggest threat comes from over the top (OTT) providers like Skype, Vonage, Netflix, and Hulu. These companies services bypass traditional network distribution approaches and run on top of the CSPs core internet networks. OTT companies benefit from CSPs costly infrastructures without having to pay for the privilege, while whisking away their customers and annual recurring revenue. +0.2% Market saturation The smartphone market in developed countries is approaching its saturation point. A recent report from IDC cited a measly 0.2 percent growth rate in smartphone shipments worldwide for Q over the same period the year earlier, the smallest growth ever. Those numbers indicate that nearly every consumer interested in having a smartphone already owns one. For CSPs, it means that revenue from brand new consumers will be minimal and they ll need to look elsewhere to replace the double-digit growth they ve enjoyed in past years. Low customer loyalty Consumers today first consider the price when evaluating service providers, with network coverage being a secondary consideration. With relative parity in network quality and coverage among the top providers, something as simple as a one-time, low-cost promotion can easily entice a subscriber to switch from their long-time provider. That means CSPs with quality services and lower cost structures can cause considerable customer churn SevOne NFV in 2017: Opportunities and Obstacles for CSPs
5 NFV: A Wealth of Opportunities CSPs must be agile to support new services, capitalize on growth opportunities, improve efficiency in network resource provisioning, and be more responsive to and engaged with their customers. Network function virtualization gives CSPs a path to this agility, along with flexibility, speed, efficiency, and responsiveness. The following are some of the benefits that CSPs can experience when switching to NFV SevOne NFV in 2017: Opportunities and Obstacles for CSPs
6 Capitalize on new market opportunities Demand for mobile data is reaching new heights. Global mobile data traffic grew 74 percent in 2015, with mobile data traffic reaching 3.7 exabytes per month, according to the most recent Cisco Visual Networking Index. But CSPs need to do more than move this traffic they need to monetize it. Many are beginning to offer compelling new services in areas with high growth potential, such as media and entertainment (e.g. video and music streaming), social networking, gaming, Internet of Things (IoT) offerings, and even on-demand IT services. In order to provide these services, CSPs will need the speed, agility, and responsiveness that NFV can provide. Take advantage of scalable, flexible provisioning NFV allows CSPs to automate the provisioning of network services, controlling them centrally with software rather than locally with hardware. This automated and dynamic provisioning gives CSPs more efficient and costeffective ways to meet fluctuating demand for network services. And since the NFV approach leverages cloud-based architectures, it also gives CSPs the ability to scale their network services rapidly and to whatever size and scope is needed. Enjoy reduced operating costs Much like the savings CSPs saw by virtualizing and consolidating servers in their data centers, NFV can help them drive similar efficiencies in network operations. Shifting from a hardware-centric to cloud-based approach and leveraging open systems and reference architectures is a much more effective (and less expensive) way to deliver network services. Become more agile The automation that comes with NFV allows CSPs to implement new ideas faster with less risk. Rather than pursuing a few large projects with hefty time and monetary requirements, CSPs can work on many small projects quickly with less effort and cost. If a project fails, it can easily be cast off without wasting many resources, and projects that show promise can be quickly scaled up to produce fully fledged market winners. NFV supports this increased agility. Stronger customer engagement NFV offers CSPs the flexibility to build more self-service and on-demand configurations for customers into their service offerings. Customers who can customize and personalize their service offering are typically more invested in the product and less like to switch to a different provider SevOne NFV in 2017: Opportunities and Obstacles for CSPs
7 With Great Reward Comes Great Risk Moving to an NFV infrastructure will undoubtedly give CSPs the business agility and flexibility they need to compete and win in But given the size of many CSPs infrastructures, many will need to move from hardware-oriented to cloud-based network architectures in phases. Therefore, for a significant period, CSPs in transition will need to operate and maintain both types of networks simultaneously, which creates a unique set of challenges. Once the transition is complete, CSPs will also have to grapple with managing an entirely NFVbased network. They will be able to provision and de-provision network services in seconds instead of days or weeks, and this level of flexibility means they ll need real-time insight to understand what s happening within their environment at any given moment SevOne NFV in 2017: Opportunities and Obstacles for CSPs
8 Legacy network assurance Confusion over managing Multiple monitoring Higher potential for tools can t keep up disparate systems platforms won t work performance issues Many CSPs legacy network Managing two very different Purchasing and implementing NFV brings flexibility and agility assurance tools are not designed styles of network operations multiple network assurance but also added complexity, to handle virtualized network during the transition to NFV tools to handle their multiple making it easier for a minor resources. Those tools are with distinctly different network environments is infrastructure performance generally unstable when run elements, such as device simply not a viable strategy for issue to widen into a service- in a cloud hosting environment, provisioning, reporting, and CSPs. In addition to increased impacting event. Teams will and cannot simultaneously network visibility on each side, operational costs, having need traffic visualizations, support existing legacy and new will undoubtedly be a challenge multiple assurance tools results insight into specific events, virtual environments during a for network teams to take on. in higher MTTR. With lag times accurate representations of transition to NFV. Furthermore, They ll need to streamline between environment changes the end user experience, and once the transition is complete, monitoring their operations by and assurance visibility, and much more to manage their legacy tools aren t optimized using one tool that can manage complicated closed-loop environment effectively. A for monitoring a completely their entire ecosystem on a orchestration time-to-action and single platform that provides virtualized network. Many won t single screen to be effective. analysis workflows, everything this visibility is key to managing be able to monitor changes just takes too long. Teams will the transition to an NFV in real time and provide an be stuck toggling between tools environment and assuring accurate portrayal of system to see the big picture, wasting performance once the transition health instantaneously. time and resources, with this is complete. patchwork-type arrangement SevOne NFV in 2017: Opportunities and Obstacles for CSPs
9 To Move or Not to Move? Despite the benefits and challenges, are CSPs making the move to NFV? The answer is yes. $158B 100% The NFV market is expected to triple itself in 2017 and reach $158 billion by 2021, according to Technology Business Research. 100% of operators will implement network functions virtualization (NFV) at some point, with 81% planning to do so by 2017, according to IHS Markit s NFV Strategies Service Provider Survey Furthermore, CSPs that have adopted SDN and NFV technologies have already witnessed cost reductions of some 25 percent, according to Accenture. So how do CSPs manage the transition, ensuring visibility and granular performance information in a single, unified assurance solution that is capable of handling both their legacy and NFV-equipped network environments? And once the transition is complete, how do they then monitor their highly dynamic NFV infrastructure with accurate, real time information? SevOne NFV in 2017: Opportunities and Obstacles for CSPs
10 The SevOne NFV Service Assurance Solution gives CSPs the real-time visibility they need to efficiently monitor and manage physical and virtual network environments using a single, unified platform. It is designed to meet the needs of CSPs implementing multi-vendor virtual network functions and service models as part of an OpenStack -based virtual infrastructure, while also supporting their existing physical network infrastructure. The SevOne NFV Service Assurance Solution provides the network assurance reliability, speed, and scale that CSPs need to capitalize on big growth opportunities in new markets. WE COVER THE SEVONE PLATFORM AND HOW IT SUPPORTS CSPS AS THEY TRANSITION TO AND MAINTAIN NFV IN OUR SOLUTIONS GUIDE. DOWNLOAD NOW: info.sevone.com/ NFV-SG About SevOne. SevOne provides the world s largest CSPs, MSPs and Enterprises with the most comprehensive technology portfolio to collect, analyze and visualize network & infrastructure performance data to deliver actionable insights to compete and win in the connected world. SevOne serves organizations that are looking to complex, dynamic next-generation infrastructure such as software defined networks, orchestrated containers and cloud technologies to support their business goals. [ blog.sevone.com solutions@sevone.com ] SEV_EB_02_2017
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