Overview
What it is: NFV, or Network Function Virtualization, is the process of handling communications network functions with software-based technologies, rather than hardware. These pieces of software, referred to as Virtualized Network Functions, can replace specialized telecommunications appliances. Often, NFV is managed through a central orchestration solution offered by vendors like VMware or Cisco.
What it does: NFV can handle everything from network security to load-balancing, to any one of a number of networking functions. It can either integrate with specialized hardware appliances or replace them completely. Additionally, NFV can operate in the cloud, or with generic high-performance servers in place of specialized appliances.
Why it matters: Communication Service Providers (CSPs) running their networks with specialized on-premise hardware run into the inherent limitations of physical systems. Among them: network appliances require space, installing and maintaining them requires expertise, and scaling them up usually involves up-front spending as well as simply waiting for new appliances to arrive. NFV can bypass these difficulties, potentially creating more agile networks, with which CSPs can deliver new services and scale old services faster whilst reducing infrastructure costs.
What to do about it: If you’re a CSP whose network is expanding or you are looking to deliver new service types or enter new markets, consider network function virtualization as an option. On the one hand, while implementing NFV requires up-front training and costs, and presents risks, on the other hand, could decrease long-term TCO, due to factors like ease of scaling and decreased power and space requirements. However, you should not underestimate the effort required to transition from traditional, hardware-based approaches.
Business Advantages
- Reduces fixed costs involved in maintaining specialized hardware
- Creates more scalable networks
- Can lead to more cost-efficient accommodation of peak demand by removing hardware bottlenecks
Business Challenges
As with many elements of digital transformation, migration can be cumbersome, especially as regards integrating virtualized systems with legacy hardware, and combining VNFs from different vendors. There have been efforts to make integration easier, notably with the introduction of LeanNFV, an open NFV architecture. As well, VNF implementation can create security risks.
NFV Adoption
Thus far, NFV adoption has been slower than anticipated, and results haven’t always been positive. For example, Telus, a Canadian telco, has realized only one-third of the savings anticipated, according to CTO Ibrahim Gedeon. Gedeon holds responsible, among other things, the fact that the difficulties of hardware maintenance have been replaced with the difficulty of software maintenance.