TBR: 5G to fuel NFV/SDN

08 Aug 2018

Technology Business Research’s (TBR) latest NFV/SDN Telecom Market Forecast predicts that mainstream adoption of NFV/SDN is now set for the early 2020s due to operators encountering challenges with migration.

Between 2017-2022 5G will also serve as the underlying catalyst for increased NFV/SDN spending. 5G will push operators to adopt a new network architecture, and virtualization will be a critical aspect of networks.

“Despite challenges, operators will push forward with NFV/SDN and will scale their investments in these technologies. Operators must transform to stay relevant and competitive in the digital era, and NFV/SDN is a critical component of that transformation,” said TBR Telecom Senior Analyst Chris Antlitz.

Another TBR report, 1H18 Telecom Software Mediated Networks (NFV/SDN) Customer Adoption Study, observed that commercial deployments of NFV and SDN are aggressively moving forward, with nearly all leading Tier 1 operators having adopted or planning to adopt NFV and/or SDN by the end of this year

TBR Telecom Senior Analyst Michael Soper said that the cost savings potential of network virtualization and automation is becoming more evident.

“Carriers are leveraging NFV and SDN capabilities, as well as integrating cognitive technologies such as artificial intelligence (AI) and machine learning (ML) to evolve to a zero-touch network that can automate performance management and maintenance functions to prevent network faults and reduce expenses. The industry is in the very early stages of this trend,” he cautioned.

WAN virtualization is a top priority for service providers as they implement solutions including SD-WAN and WAN optimization into their portfolios. Service provider revenue growth from software-mediated network services, particularly SD-WAN, is accelerating, but the lion’s share of WAN revenue continues to stem from traditional services such as MPLS.

The supplier landscape shows incumbent vendors, particularly hardware suppliers, remain entrenched with service providers, but face disruption within certain use cases and with respect to commoditization.

The study indicates incumbent hardware providers are best-positioned for providing NFV and SDN solutions across domains, with startups, open source players and cloud-centric vendors infrequently mentioned by respondents. Still, incumbents will face disruption with respect to certain VNFs, such as vEPC and vRAN, and the most significant threat remains hardware pricing, the area in which the overwhelming majority of respondents expect to see cost savings due to commoditization and the shift in spend to the software layer.

As the software-mediated market matures, software-centric vendors will be better-positioned than hardware-focused competitors. Additionally, vendors with highly automated service delivery and remote delivery capabilities can help service providers reduce opex tied to NFV and SDN.

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