Telecommunication Service Providers are focused on transforming into software and digital business/ services organizations as a part of a broader strategy to fend off increasing competition from non-product traditional sources and relegation to utility status. The network needs to become more agile, simple, flexible and cost-effective in order to achieve this lofty goal, all while shortening innovation cycles and new service deployment — from months to moments.
Proprietary solutions, legacy business models to protect, and a lack of open interoperability threaten the transformative nature of Software-defined networking (SDN) and network function virtualization (NFV), which hold a promise to revolutionalize the industry. The investments that both Service Providers and ecosystem participants are making to efficiently and effectively accelerate SDN and NFV adoption are the key to enabling this transformation. The questions that they need to ask themselves are:
- Which initiatives or investments should the Service Providers make in the medium term (2015–2020) to realize the promise of SDN and NFV?
- What are the hurdles to adoption that can be planned for?
- How will the Service Providers and supplier ecosystem evolve?
- How does my progress compare to that of my peers?
Cost-reduction (Capital Expense and Operational Expense) and driving new revenue-generating services are the drivers for NFV. To successfully achieve the transformation to drive OpEx reduction and ultimately enable new revenue-generating services, the service providers need to alter their organizational structure, acquire new skill sets, align executive- level sponsorship, and provide organizational authority.