Telecommunication operators and enterprises are set to increase their NFV investments as the market has finally reached a maturation point.
Editor’s Note: With 2017 now upon us, RCR Wireless News has gathered predictions from across the mobile telecommunications space on what they expect to see in the new year.
In 2016, telecommunication operators accelerated their investments in network functions virtualization platforms, driven both by the maturity of open source projects like Open Project for NFV, Cloudify, Aria, Open-O, OpenStack and Kubernetes, and by at-scale production deployments with major service providers like AT&T, Deutsche Telekom, Telefónica and China Mobile.
In 2017, we’re going to see investments in NFV spread throughout the mainstream of carrier and service provider clouds as the pioneers mentioned above have proven the economic advantages of these deployments. Mainstream telecom adoption of NFV will bring with it increased interest from a group that might not – at least superficially – seem a great candidate for NFV: the enterprise.
Let’s look at these two sets of predictions in greater depth.
Telecom operator predictions
A tough slog for proprietary vendors
EMC/Dell went private in 2016. In 2017, we’re going to see at least one other major equipment vendor – Cisco Systems and Juniper are my odds-on favorites – go private as a defensive strategy. Going private would buy them more time in their ongoing struggles to find an antidote to sluggish growth as proprietary product lines fall out of favor with service providers and enterprises.
Let’s paint the picture with some vivid colors: Cisco earnings for the fiscal quarter ended October 29 fell 2.6% year-over-year to $12.35 billion, while net income dropped 4.4% to $2.32 billion. The decline was due mainly to restructuring charges from 5,500 layoffs, announced in August, which are occurring in stages over the fiscal year. Orders from service providers – which account for roughly one-quarter of Cisco’s business – fell 12%. Other vendors such as Ericsson are expected to follow that path as well.
Let’s get practical
Operators are becoming more pragmatic in their cloud game plans. Specifically that means greater insistence upon vendors embracing standards-driven design approaches. Recent requests for proposals from major carriers are taking a lighter view on the European Telecommunications Standards Institute model and seem to rely more on a model-driven approach, as in the case of enhanced control, orchestration, management and policy architecture. You’ll also see greater adoption of cloud-native practices (containers, microservices), but that’s a topic for another article. Eventually, this will force all of the standard bodies (the Institute of Electrical and Electronics Engineers, ETSI, the Organization for the Advancement of Structured Information Standards) to align their game plans if they want to remain relevant.
Libraries help NFV lighten up
Open-source frameworks such as Project Agile Reference Implementation of Automation aim to allow any developer to drive standards adoption in their NFV designs by providing extremely lightweight frameworks that follow the topology and orchestration specification for cloud applications/YANG model and support Apache-based open governance. This will indirectly allow more developers to take more active roles in shaping the next generation of standards simply by focusing on contributing code that works in production.
Getting our heads right
The single biggest barrier to NFV adoption will continue to be culture. Consolidation between the carrier network and IT operations teams means carriers must adopt cloud-native operation practices to run their core infrastructure efficiently. Stated differently, the legacy need for separate groups and frameworks to manage IT and network services becomes obsolete. It’s a major hurdle in those organizations that are leading the way in NFV adoption.
Cloud gold rush mines for cloud-native VNFs
Virtual network functions vendors will finally adapt to the open, agile realities of the NFV world. Many legacy VNFs are still sold as a single virtual appliance. They still carry complex, inflexible licensing plans. They’re proprietary. They’re not orchestration-friendly, limiting their ability to scale like other cloud apps. They’re not designed for multitenant deployment, and can’t be monitored and automated like cloud apps.
The NFV market is expected to triple itself in 2017, according to Technology Business Research, and reach $158 billion by 2021. Seizing this opportunity requires that savvy VNF vendors re-architect their VNFs as cloud-native VNFs. VNF startups like VeloCloud, Versa Networks and MetaSwitch are doing this greenfield. And the “un-savvy” VNF vendors? They’re going to be left behind. Maybe they’ll add their names to the ranks of vendors going private.
Enterprise NFV predictions
Where the carriers have innovated, enterprises will follow. Networking has been the last piece in the infrastructure to become virtualized. Now that the technologies, processes and systems are reasonably well established and the business models for VNFs are adapting to suit modern, scale-out design principles, enterprise operators of big networks must – out of economic necessity – pay attention.
Here’s a quick look at three enterprise NFV use cases that will drive the shift in 2017.
The obvious use cases are virtual customer premises equipment and software-defined wide area networks, which provide a centralized management framework for automating and optimizing corporate edge network devices as well as the connectivity between them. This, in turn, drives simplification, efficiency and agility.
Continuous integration and continuous deployment are cornerstone practices of the development and operations movement. Blue-green deployment is another, less-commonly known pattern used to achieve this devops goal. CI/CD and blue-green deployment often involve setting up network services like firewall rules, security groups and load balancers. With NFV, this can be automated, avoiding time-consuming and costly custom integration. NFV provides a generic way to handle network automation.
Networking is the glue that connects all the pieces of hybrid cloud together. So far, we’re seeing hybrid cloud networking handled through a fairly static – and often manual – configuration. NFV is finally mature enough to automate this, and in 2017 enterprises will begin implementing NFV in production hybrid clouds to improve agility, automate configuration and control management costs.
What does it mean?
NFV has always presented a compelling value proposition. When VMware bought Nicira in 2012, they were sufficiently clear on the value that they paid north of $1 billion for a startup with an unproven technology and a small customer list of brave early adopters.
It’s taken four years for open source projects, vendors and users to solve a long list of engineering problems and business model challenges to make NFV ready for prime time. Now, that time has come. 2017 will see broad-scale adoption among service providers, and the emergence of an enterprise market for NFV solutions focused on very specific use cases where the technology has a high probability of making a measurable, positive difference. Smart vendors are already putting plans in place to lead this transformation, and buyers are getting smart about how and where they’re going to deploy NFV to leverage a cloud-native future.