#3 – The NFV hype is over, now it will really take off
Northstream predicts a breakthrough and strong growth in NFV activities in 2017. The incentives for operator implementation are high as some new services (e.g. VoLTE) will benefit from virtualized network functions and some future ones (e.g. network slicing) are dependent upon them. As a result, NFV in 2017 will be driven by services such as VoLTE, Carrier Cloud, Wi-Fi calling, service chaining, resource sharing and network slicing. In parallel, NFV will be driven by the natural evolution of existing infrastructures, rather than acting as a replacement strategy for operators.
NFV was first introduced as a strategy for operators to enhance existing processes and lower costs. It created hype in the operator community but commercial implementations were stalled by several challenges; lack of multi-vendor solutions and standards for unified implementations, issues with OSS/BSS integration and unproven reliability and performance. The associated risks and the required transition process outweighed the perceived advantages of NFV.
Northstream predicts that NFV will finally take off in 2017, as multi-vendor solutions that can be integrated into operators’ existing networks and operations have become available, and operators have announced new plans for NFV implementations. Though their focus remains on generating operational efficiencies, the real driver will be the new services NFV creates. For example, NFV provisions service chaining for network functions; which means that network services can be configured dynamically in software, without having to make changes to the network at the hardware level. More importantly, a new set of services are emerging which are dependent on NFV.
By enabling service chaining and resource sharing, NFV allows operators to deliver network services to customers and enterprises through software instead of dedicated hardware devices. This represents a major step towards meeting the new demands of industry verticals that are just around the corner. Operators can simplify and accelerate service delivery and allow their customers to order new services or adjust existing ones on demand. As a result, most of operators’ new services either benefit from or are dependent on NFV. Such services include carrier Cloud, Wi-Fi calling, VoLTE, and eventually Network Slicing. NFV (together with SDN) can also be seen as the preliminary building block for migrating to 5G.
Tier-1 operators will presumably lead the NFV implementation trend. AT&T claims that 30% of their network is already equipped and they plan to increase that number to 75% by 2020. Other operators announcing upcoming NFV implementation plans include Telefonica, Softbank, Vodafone, DOCOMO, China Mobile, Verizon, Telia, Singtel, SK Telecom, Tele2, Telecom Italia, Orange and T Mobile – a solid foundation for the year of NFV.