How do you get innovation in services and service delivery instantiated into the network at the same rate at which you can turn up a service on the web? Look at Telenor’s rollout of the WebRTC-based application Appear.in. This app was created in six weeks by three interns with the goal to make a cool video conferencing service in response to the problems the designers at Telenor had in setting up corporate video conferencing. Is it possible to replicate the rapid pace at which innovation can be introduced via a web service in the traditional communications network? At the recent ETSI NFV ISG 12 conference in Jersey City, that was the vision that Verizon’s Adam Koeppe, Vice President of Access Technology Planning, laid out with Network Functions Virtualization (NFV) and Software Defined Networking (SDN). The discussion was all about enabling the ability to increase the rate of innovation in the network to the same pace that it occurs in the software.
Operators in general are seeing a divergence between revenue growth and traffic growth (traffic growth is exploding while ARPU remains relatively flat). I talked about this disconnect between revenue and traffic growth at the recent LTE Asia conference (you can download the slides here). This flattening of the ARPU is concerning, and the resolution to this issue can be addressed by wringing out as much cost as possible from the business, or growing top line revenue. NFV is about both. Verizon emphasized this point but to paraphrase Adam, technology for the sake of technology is not pragmatic. Furthermore, Shawn Hakl, Vice President of Product and New Business Innovation for Verizon reiterated this by pointing out that customers don’t buy technology, they buy solutions. This really set the tone of the operator’s perspective when it comes to NFV implementation. At the end of the day, NFV and SDN both have to help operators improve the margin picture as well as “reduce the cost per bit served to the customer.”
Ultimately the goal is to leverage both NFV and SDN to the extent possible to start bringing up services at a faster, less costly rate, and as Gagan Puranik with Verizon reaffirmed, help bring change at the pace of software, not hardware. Does NFV check both the “cost reduction” as well as the “service velocity box”? The hope is that it does by streamlining infrastructure-related operational cycles from a management and onboarding perspective, and enabling faster roll out of services at a significantly reduced cost because you don’t need to go through the arduous task of installing and turning up proprietary hardware for each service. The risk of getting a service wrong goes down substantially.
So is the sunset imminent for hardware-based appliances? If you ask Verizon, the answer is yes. In fact, just like the food you buy at the grocery store that has an expiration date, Verizon has something similar for each hardware-based network infrastructure component; in this case it would be an “End of Appliance” date after which the expectation would be that any new expansions or new deployments would be NFV-based.
What are the challenges ahead for operators as they move towards NFV? First, NFV is very disruptive to an operator’s traditional partners, but this is inevitable to make the network advance at the pace of software-based innovation.
Verizon sees that applying SDN and NFV and virtualization to a real-time service delivery network is no trivial task. They are not the only ones. In the recent SDN and OpenFlow World Congress in Dusseldorf I discussed the challenges of moving real-time multimedia applications to cloud environments, and made the case how vendors just can’t take a monolithic piece of software, move it into a virtual machine and call it NFV. In order to take advantage of NFV and fast implementation and rapid service rollout, a VNF architecture that operates efficiently, at scale and with performance in a cloud environment is paramount. VNFs need to follow some key guiding principles such as modularity and decomposed functionality to make them efficient from a scalability perspective. Jim Machi, Senior Vice President of Product Management and Marketing summarized this pretty well in a video you should check out.
Do you agree that NFV is going to help you start seeing innovation at the network level and help you implement innovation at software speeds? Let us know by tweeting us at @Dialogic with the hashtag #NFVSpeed.