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FierceWireless.com 4 3 M AY 2 0 14 M AY 2 0 14 FierceWireless Operators anticipate SDN/ NFV cost savings but that savings has equipment vendors concerned. While hype seems to go hand in hand with the introduction of new technologies, analysts say operators are moving remarkably fast to Software Defined Networks (SDN) and Network Functions Virtualization (NFV). Perhaps that's because NFV came from an operator-inspired initiative that's closely aligned with SDN. Yet SDN and NFV come with a twist. While network migrations in the past led to the buying and selling of new hardware and software, the aim of these new technologies is to rely less on hardware and more on software, which can be a tricky thing. One prevailing notion in the financial community is that software- driven architectures will take away as opposed to give to incumbent equipment providers. That notion may be advanced by some vendors that say NFV isn't happening because they're not selling new boxes. "They [operators] are trying to virtualize in-place legacy stuff to make it more easily configured as a valuable resource," said Sue Rudd, director of service provider analysis at Strategy Analytics. Operators are particularly interested in what SDN/NFV will do for them in terms of cap ex and op ex savings and revenue from new, faster-to-market services. The trend toward SDN/NFV is enough to make some analysts revise 6-month-old forecasts. Maravedis-Rethink said in March that it predicts nearly three-fourths of mobile operators will deploy some form of NFV by 2018. That figure is higher than the firm's previous estimate of 67 percent made six months prior. SAVINGS, PLUS MORE Carriers are targeting total cost of ownership savings of up to 35 percent over the next five years by using NFV, with savings coming from key elements like the packet core. Maravedis-Rethink added that 16 percent of carriers it interviewed claimed NFV was a first step toward a broader software-defined networking policy that is expected to generate greater benefits. Despite the potential upside, Maravedis- Rethink found that only 10 percent of carriers think cost savings associated with NFV would be worth the potential risk and disruption of such a bold virtualization move. Those risks include performance compromises compared to dedicated appliances; immature solutions; and skills availability. Such uncertainty is expected to keep NFV adoption levels muted until at least 2016. SDN/NFV Take Star Turns as Next Big Blockbuster Technologies BY MONIC A A L L E V E N One thing is for sure: The distinction between the wired and wireless infrastructure is further blurred. "NFV and SDN don't care what the transport is if it's all virtualized," Rudd said. In fact, a lot of the costs savings that operators want are aimed at removing silos. OLD VS. NEW While the rest of the tech industry has moved into the cloud-computing era, networking has remained "stuck in a decade-old paradigm" built around integrated hardware and software "boxes" that are configured manually and can't scale, say analysts at Goldman Sachs. SDN promises to break that bottleneck, introducing an era of software intelligence and programmability that can "reinvent networking for the cloud era." Goldman Sachs says the SDN software infrastructure market likely will top $1 billion by 2018. "We see the primary benefit of SDN in increasing business velocity, which should translate to both opex savings and revenue generation, with a secondary benefit in capex savings," the firm said. "Given the relative proportions of opex vs. capex, SDN should expand the pie for networking vendors (broadly defined to include both hardware and software), though within that pie the value will likely shift to those vendors that are well positioned in SDN software infrastructure and applications and away from hardware-centric vendors." Infonetics Research surveyed operators and found that 29 percent of survey participants are currently implementing SDNs, and 52 percent plan to evaluate SDNs by the end of 2014. Nearly every operator the research firm surveyed plans to deploy SDN or NFV in some aspect in their network at some point. While the firm sees a few operators moving to actual commercial deployments in the coming months, mostly specific to NFV use cases, most commercial deployments won't kick into motion until 2015, "There's a genuine drive to leverage the capacity because customers aren't slow in the head, they get it that it's feasible now and they're saying, 'If you're not going to do it, I will find someone else who will.' Nothing gets a vendor's attention faster than a customer who says no." PAUL PARKER-JOHNSON, ACG ANALYST NFV MARKET OPPORTUNITY IS EMERGING NOW: WILL IT TRACK HIGH OR LOW? SOURCE: YANKEE GROUP 2013 NEARLY EVERY OPERATOR SURVEYED WILL DEPLOY SDN OR NFV IN SOME ASPECT OF THEIR NETWORK AT SOME POINT

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