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© luchschen dreamstime.com Analysis | August 12, 2013

NSN and Cisco best positioned to deliver on NFV

The telecom industry has long noted the scale economies and service velocity of the IT industry and seeks to leverage those benefits. This results in the ETSI NFV WG efforts to nudge the Telecom ecosystem closer to the IT ecosystem.
In “The SDN and NFV Business Case”, ABI Research finds that telecom networks will virtualize, starting with the services plane, and following with the control and data planes of modern 3G and 4G networks. The virtualized mobile network spend will reach nearly USD 6B by 2018.

Operators are starting to consider commercial IT servers for their core networks and capturing the resulting CapEx savings. The telecom equipment manufacturers identify the potential for larger OpEx savings, but not so much for CapEx savings. ABI Research believes OpEx savings will exceed CapEx savings, but the biggest financial impact will come with innovations that are inconceivable with current business processes.

“Software Defined Networking and Network Functions Virtualization are shaping up to fundamentally change the nature of the telecom industry,” says Joe Hoffman, practice director at ABI Research. “The changes in business practices will enhance both top line and bottom line financial results much more than just cost reductions. In the long run, operators embracing SDN/NFV will outrun their competitors with a much faster service velocity.”

ABI Research notes that Nokia Siemens Networks has taken leadership in virtualizing its Liquid Core network with commercial ATCA and HP servers, and is most aligned with NFV. Cisco, with its nascent server business, is also positioned to exploit this trend, as its ASR5xxx software should readily port. Infrastructure vendors with proprietary systems are also moving to support virtualization on their platforms, and should deliver similar transformational benefits to their installed base.

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