Home References Viable Business Models for NFV

With millions of consumers connected to a network and the mammoth amount of data crossing the network, Network Functions Virtualization (NFV) promises to ease the burden faced by service providers. It allows them to move network functions from appliances to generic servers, thereby making networks far more agile. With the network functions hosted in the cloud and allowing for scalability little surprise then that there is an industry wide shift towards NFV. It augurs well for enterprises since it offers deploy-on-demand network power.Some of the other major advantages of virtualization in the long run include:

Significant reduction in operating expenditure (OPEX) costs- With an open software, the first obvious saving is towards operating expenditure. OPEX savings result from a number of areas including but not limited to:

  • Savings from reduced power consumption
  • Efficient network planning
  • Improved rate of fixing service problems and more.

Also with the NFV model, where the hardware forms a pool of resources shared by all the applications, advantages pertaining to capital expendirure (CAPEX) also come into play.

  • Ease of service upgrades:With NFV, service upgrades do not mean purchasing new hardware each time. Instead installation of new services can be done through user-friendly software updates. This operational ease also lends itself to ease of scalability of operations while also significantly reducing the time to market, when it comes to new services and applications.
  • Secure systems- With any update of software-based systems, security measures are quicker and robust. While new technologies do bring in new threats, however virtualization has the ability to allay some of these threats through mechanisms, such as its centralized security management.
  • Ability to move from being a network led to a data led organization– With the ease and scale of software based operations, networks can redesign themselves to become data led businesses and remain relevant. Once the operator is equipped with tools that enable him to have a real time view of the environment, the operator has access to meaningful subscriber information. Among other things, the data allows operators to predict peak usage and ensure that customers enjoy quality services. Overall, as long as the operator can effectively collate and assess data, it can present many advantages including new revenue streams.

Despite its obvious advantages, the switch over does not come without its obvious challenges for operators:

Monitoring the environment- While NFV will help operators acquire scale, it will be imperative that network performance be monitored effectively. As NFV becomes widespread and uses different hardware and systems, the system integration role becomes even more crucial. Not only will operators have to monitor performance they will need to work at optimizing it even as data demands escalate.

While the time is right for NFV to take center stage, for it to become a reality operators need to adopt robust service assurance tools. Also right partnerships with dynamic solution providers who can offer end-to-end assurance solutions will be crucial. To ensure smooth NFV implementation operators will need to choose network optimized platforms as also implement a cloud-hosted model. An agile data and process architecture will also go a long way in its seamless integration.

While still in its initial phases, as per a recent research, SDN and NFV investments are slated to grow at a CAGR of 46 per cent between 2016 and 2020 and accounting for over $18 billion revenue by 2020.

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