A new report from Technology Business Research says it might be 2017 before Tier 1 service providers actually deploy network function virtualization (NFVs) software and software-defined networks (SDNs) in production environments.
The irony is that smaller more nimble managed service providers (MSPs) are already beating Tier 1 carriers to the punch.
Finding balance using NFVs
The TBR 2Q15 Telecom Software Mediated Networks (NFV/SDN) Customer Adoption Study finds that 17 out of the 20 largest Tier 1 service providers plan to adopt NFVs and SDNs by 2017 to reduce their overall costs by 25 to 35 percent.
NFVs provide a mechanism through which many of the physical appliances on a network are replaced by a piece of software that provides the equivalent function in software running on a traditional x86 server or some other form of commercial-grade processor. SDNs, meanwhile, provide the management plane through which all those NFVs will be managed.
While lumbering giants such as AT&T are for the most part still beta testing these services, smaller service providers are already moving them into production. Case in point is Masergy, which is providing managed network services to branch offices based on NFVs using an appliance from Overture that is built on top of Intel Atom processors. Running on top of that appliance are instances of Brocade Vyatta 5600 vRouter and Fortinet FortiGate-VM, firewall virtualized network functions (VNFs) software that eliminates the need to deploy physical routers and firewalls at the edge of the network.
Naturally, there’s not much love lost between major carriers and the rest of the channel when it comes to competing for accounts. There’s no doubt that thanks to the resources carriers have at their disposal they have a significant advantage when it comes to embracing disruptive technologies such as NFVs and SDNs.
But, it takes a while for carriers to test and implement those technologies and absorb the implications of those technologies into their business models. In fact, many of them have every reason to slow down the rollout of those technologies as they try to find the right balance between the new cost of delivering network services and their ultimate profitability.
Looking to service providers for innovation
In contrast, smaller organizations such as Masergy have much less to lose and a lot more to gain. As such, they are more willing to deploy NFVs and SDNs in a production environment. Other MSPs will no doubt follow suit, and before too long the Tier 1 carriers will see the services they provide at the edge of the network continually picked off by smaller, more aggressive rivals.
How much of that business the carriers stand to lose remains to be seen. But every time a disruptive set of technologies such as NFVs and SDNs come along, larger companies such as Tier 1 carriers wind up having to buy back business they couldn’t keep through innovation by acquiring the nimbler service providers that manage to continually stay two steps ahead of them.