TBR survey finds NFV and SDN PoCs will increase in 2016, with greater adoption in 2017
Network functions virtualization and software-defined networking platforms are expected to see continued proof-of-concept testing by telecom operators in 2016, with greater adoption not expected until at least 2017.
According to a new study from Technology Business Research, some early adopter tier-one telecom operators have moved PoC use cases with virtual evolved packet core, virtual IP multimedia subsystem and virtual customer premise equipment from “commercial predeployment to full deployment.” However, TBR said it expects a majority of those operators to continue with PoCs throughout 2016 as they continue to work through “key questions … before NFV moves to mainstream adoption.”
One of those questions revolves around the vendor community, with TBR noting its research shows suppliers are viewed differently by network operations and IT departments, which is forcing those entities to look at new partners for their technology requirements, though also maintaining the need for a “prime integrator to manage projects.”
“Tier-one operators are requiring network operations and IT to join forces for NFV and SDN deployment, causing each to champion their own favored suppliers,” explained Michael Sullivan-Trainor, telecom executive analyst at TBR.
While broader telecom adoption of NFV and SDN remains slow, analysts have predicted the space will see significant investment over the next five years. IHS earlier this year said it expects the global market for NFV hardware, software and services is set to surge from $2.3 billion this year to $11.6 billion in 2019. The firm claims service providers are still “early” in their transformation towards virtualized network platforms, which it said is a 10- to 15-year process. Revenues from outsourced services geared towards NFV projects is expected to post a 71% compound annual growth rate from 2014 to 2019, with revenue from software-only video content delivery network functions for managing and distributing data forecast to grow 30-fold between 2015 and 2019.
A recent report from ACG Research, and sponsored by Affirmed Networks and VMware, found mobile operators would begin saving money on NFV deployments within the first year and realize an investment payback within three years; adopting a virtualized evolved packet core can reduce capital expense by an average of 68% and operating expense by 67%; and that the deployment of virtualized network components can happen within six months, compared with an average of 15 months for traditional network hardware, resulting in a quicker time to market and return on investment.
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