Software focus impacting router decisions

The telecommunications industry’s increased focus on software-based solutions tapping into software-defined networks and network function virtualization is set to impact router purchasing decisions, according to a new report from Infonetics Research.
The firm found that three-fourths of the operators surveyed were planning to move services, including security, quality of service and virtual private networks from “physical edge routers to software virtual routers running on commercial servers in mini data centers.” This move is set to alter how telecom operators approach their decision making.
“The move to SDN and NFV will change the way operators make equipment purchasing decisions, placing a greater focus on software,” explained Michael Howard, co-founder and principal analyst at Infonetics. “Though hardware will always be required, its functions will be refined, and the agility of services and operations will be driven by software.”
The report added that 15% of operators surveyed claimed to be deploying or trialing NFV in “mini data centers,” with an additional 59% of those surveyed claiming to be “considering or evaluating” the process.
Infonetics Research noted earlier this year that operator spending on router and switch equipment slowed during the first quarter in a move the firm termed “SDN hesitation.” That hesitation was attributed to carriers being more cautious in their purchasing decisions due to the challenges associated with the coming push into SDN and NFV. Infonetics reported that revenue from the sale of global carrier router and switch equipment, including IP edge, core routers and carrier Ethernet switches, dropped 13% sequentially during the first quarter to $3.2 billion, with revenues from all product segments chalking up double-digit sequential drops. All geographic segments posted sequential declines in sales, with North America also posting a year-over-year drop in segment sales.
Despite the overall slowdown, the research firm remains confident that the SDN and NFV segments will continue to see strong potential as wireless operators continue to look for ways to decrease expenses and increase revenue potential.
“We believe the current generation of high-capacity edge and core routers can be nursed along for a while as the detailed steps of the SDN-NFV transformation are defined by each service provider — and many of the largest operators in the world are involved, including AT&T, BT, Deutsche Telekom, Telefónica, NTT, China Telecom and China Mobile,” Howard said at the time. “And there is intensifying focus on multiple [content delivery networks] and smart traffic management across various routes and alternative routes to make routers and optical gear cooperate more closely.”
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