What’s next for telco SDN/NFV? Fast growth, slower deployment.

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We’ve seen the hype over software-defined networking (SDN) increase over the past few years as datacenter trials and implementations take hold.

Indeed, SDN and network function virtualization (NFV) offer telecom operators many benefits such as lower costs, a multi-vendor environment and the agility to accelerate the innovation they need to meet ever-evolving customer demands.

Both SDN – in which applications share resources without being tied to specific hardware or infrastructure – and NFV, which virtualizes network functions into building blocks for communications services, will be critical to support the growth in IoT devices that is expected to reach 21 billion in the next four years.

The SDN and NFV market growth forecasts now border on staggering:

  • IHS values the combined market for SDN and NFV at a compound annual growth rate of 86 per cent between 2015 and 2020, increasing from USD 2 billion to in excess of USD 45 billion.
  • NFV estimates alone will grow to USD 6 billion in 2019 says IHS.
  • Strategy Analytics estimates that the increased efficiency SDN yields could mean a savings for telcos in excess of USD 4 billion in capital expenses by 2017.

Deployment may take years

It won’t be a straight or rapid line up on a chart for telco SDN, however.

Operators are in the very early stages of network transformation, notes Michael Howard, a senior research director and advisor for carrier networks for the global information provider IHS, adding that operator revenues to date are primarily data-center related.

“While carriers are working through SDN use cases, proof of concept and field trials, there are a small but growing number of commercial deployments,” Howard says.

Will large operators jump on the bandwagon?

They already are. In fact, all large operators have SDN development underway.

The question is: how fast will it happen?

Estimates are that full SDN deployment will take many operators approximately 3-5 years.

Potential challenges will involve legacy systems and integration woes, and operators will have to shed a conservative approach to service offerings. They will need to take more risk to be able to offer multiple services at a speed that’s foreign to their previously conservative habits.

A bit of patience is in order. “This year we look for new deployments of SDN and the scaling up of existing deployments,” according to Cliff Grossner, IHS senior research director for data center, cloud and SDN. “We continue to see vendors add to their SDN-capable products and organize new open source projects, adjusting their businesses to be part of the SDN‑driven transformation.”

The benefits

There are many benefits to operators in the adoption of SDN. As they move away from vendor-specific legacy architectures to virtualized functions, multiple vendor arrangements will provide some much-needed time during the SDN adoption process.

Instead of the delays of a complete build-your-own SDN effort, service orchestration platforms will enable capabilities to any operator service within just a few months.

As telco SDN implementation increases, where will the savings come from?

Of course, creating a single virtual network from wired, mobile, enterprise, consumer, public and private connections will be the major contributor to the bottom line.

Delivery of services and streamlined IT operations and lower infrastructure costs should also dramatically increase efficiency and profit gains.

It will take time before the realities of the flexible services promised by the delivery of “networks on demand” become apparent, but there’s little doubt that this is where the road is leading.

Carolyn Mathas

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Carolyn Mathas is a technology writer/editor for a number of industry publications. Previously, she was a Senior Editor at Lightwave Magazine and a West Coast correspondent for CleanRooms Magazine.

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