OpenCloud looks at the need for NFV differentiation in the market
When the Internet community started talking about the cloud, it meant different things to different people. Over the years, agreement was made on what makes a cloud a cloud, from server and app virtualization to dynamic provisioning and scaling. Nowadays, the cloud has been demystified and productized and it’s fairly straightforward to build one, either in-house or on public infrastructure like Amazon Web Services.
This is great news for Internet businesses, which can use virtualization technologies to spin up compute and storage resources faster and at lower cost than ever before and to scale their infrastructures on demand. However, with cloud technologies now available to everyone, there’s no inherent competitive advantage to be had – everyone is just moving faster together. This means that only those organizations that use the cloud to drive forward truly innovative services can now get a step up on their competitors.
NFV: the new cloud
Just as cloud technologies are now prevalent on the Internet, network functions virtualization will soon be common in telecom operator networks. With network functions moving from proprietary network equipment to virtualized software applications, operators will have access to a range of new functionality from an expanded vendor community. It will also be possible to run these network functions on commodity servers and operating systems, eliminating the high costs associated with buying, deploying, managing and supporting specialist telecommunications equipment.
Like the cloud, NFV will help organizations to operate more efficiently. However, the dependency on vendor-led innovation remains. The root problem here is that telecoms vendors will want to sell their offerings to a broad spectrum of operators (including many competitors). That means, once again, everyone will be moving faster together. In this scenario, the challenge for operators is how to add the innovation to create real competitive differentiation in the marketplace, instead of just keeping pace.
Barriers to innovation
Unfortunately for operators, traditional telecoms vendors have complete control over product roadmaps, development timescales and costs. This means operators who depend entirely on vendors for innovation could fall behind.
In addition, telecoms products usually need to be customized or changed in some way to support full integration into each operator’s network environment. This is a lucrative revenue stream for traditional vendors, who often charge large sums for the additional development and integration work involved.
These factors place the balance of power in favor of vendors. By making network evolution slower and more expensive for operators, vendor-dependency severely limits an operator’s capacity to innovate.
Shifting power back to operators
The only way for operators to shift the balance of power in their favor is to take responsibility for their own network innovation. To achieve this, a new, open approach to developing, deploying and customizing telecommunications functionality is needed. Crucially, it must be in-house and not vendor dependant.
Specifically, operators need open development environments that can be integrated into their networks via NFV. These should provide all the tools needed to quickly develop and implement new telecommunications functionality in the virtualized environment – across all SS7 and all-IP domains.
By taking this open, “in-house” approach to development, operators can begin creating their own functionality for the first time, eliminating costly change requests and opening new revenue streams – and NFV deployment may be integrated into the process to enable end-to-end agility.
From theory to practice
With open, in-house development, it becomes possible to re-engineer existing services quickly and easily, and new services can also be seamlessly integrated with legacy systems to extend returns on investment. In addition, new, revenue-generating services can be brought to market to take advantage of emerging technologies, such as voice over LTE.
In one recent example, Bouygues Telecom in France used an open programming environment to create a service that enables subscribers to rent a second mobile number on a short-term basis. The product, which is great for people who place classified ads online or who have busy private lives, is proving very popular, especially for dating purposes.
Making it happen
So while NFV will bring accelerated deployment and scaling of telecoms services, innovation itself must arrive by other means: namely open, NFV-enabled products. This openness means operators can develop, deploy and enhance NFV functionality in their networks, when and how they want to.
This brings a number of key benefits for operators. As well as helping them to enhance their operations based on the development and integration of new, revenue-generating services, they can achieve competitive differentiation and stay one step ahead of the rest. Critically, all this can be achieved at the low cost, with no vendor tie-in and no expensive, time-consuming change requests.
Jonathan Bell has worked in VC-funded software product companies in the telecommunications industry for more than 30 years. Jonathan was a founder and member of the executive team at Geneva Technology, a VC-funded telecoms billing start-up company from 1995-2002. He was responsible for the original conception and design of the company’s convergent real-time billing system. Bell continued as VP product strategy for Convergys post Geneva’s acquisition in 2001 for $692 million.
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