Enterprises look forward to the arrival of more NFV-based services in particular, and we expect these to roll out significantly in 2016. What these services can do for corporate users differs significantly by region, and operator vs enterprise evaluations differ on the key benefits of SDN and NFV services.
Enterprises globally are increasingly moving to cloud as the main platform for their ICT services. Telecoms operators have helped develop secure and reliable cloud service infrastructures across their own networks, and now are the first choice as cloud platform providers for many enterprises. Now these cloud operators offer their virtualized network functions to enterprises as a means for major business transformations.
Two years ago, enterprises liked cloud either a little, or a lot. Ovum’s annual Enterprise Insights (EI) survey found that 10% of companies were committing their ICT budgets to cloud at a greater rate than to traditional ICT services, while 10% committed zero. The remaining 80% hadn’t made up their minds and were setting budget changes at the same rate for both types of service.
Today, the top 10% is committing wholeheartedly to cloud service delivery across its entire ICT estate with most of the remainder increasing spending on cloud, regardless of overall ICT budgets. The investment tide is taking enterprise communications into the cloud.
The latest EI survey, conducted in late 2014, also showed that telecoms service providers must sharpen their messaging, presentation, and road maps for SDN/NFV-based services.
Knowledge gap
Not enough CIOs understand SDN/NFV. More worryingly, some refuse to admit the limits of their knowledge. In countries such as Australia and Germany, as many as one in six CIOs admit they do not understand SDN/NFV. But in other countries - especially emerging markets - not a single CIO who answered the survey doubted their own understanding of the SDN/NFV proposition.
CIOs are less interested in self-service than some operators might like to believe. The EI survey found that improved user-controls rank low on the list of important benefits of SDN/NFV for users in all regions. This suggests that while users may value being able to place orders more quickly and checking their networks’ applications performance, they don’t want to be network managers - they want to leave that to their service providers.
Cost reduction is a benefit of SDN/NFV services, but shouldn’t be overhyped. It’s not always the primary objective for CIOs being asked to re-engineer businesses for better market positioning. And service providers may not be able to demonstrate like-for-like cost savings over the term of a major migration.
Most business owners don’t know that telecoms service providers have recharged their networks, with software replacing many of the tasks that previously required dedicated fixed hardware. New software-defined networks mean the service provider can change route maps and manage traffic far more quickly and move resources around the network more easily, matching network and data center resources to market requirements on-demand.
Enterprise network managers have virtualized their systems because they seek to close the loop on an end-to-end managed service that provides network services out of the global operator’s footprint, data center hosting resources and applications stores - as well as user controls for authorization, ordering, billing, capacity management, and network and applications monitoring.
NFV combines bundles of instructions and processes from the SDN to produce a service package. It promises to bring the two developments together to produce a single end-to-end, carrier-to-user service environment.