After much gnashing of teeth about the merits of software-defined networks (SDNs) and network function virtualization (NFV) software, service providers are gearing up to deploy these technologies in production in 2016, and they expect their operating expenses to start decreasing significantly by the second year of deployment.
A survey conducted by the market research firm HIS finds that 85 percent of service providers expect data center network operating expenses (OPEX) to decrease significantly, thanks mainly to the ability to manage networking across the data center at a higher levels of abstraction.
In addition, Technology Business Research (TBR) is reporting that Tier 1 operators are moving into the early commercial stages of SDN and NFV adoption. TBR predicts that a small group of early adopter operators will lead the way, with the majority of network services providers following suit in 2018. According to TBR, more than 50 operators are currently engaged in either a trial or a controlled implementation of SDN and NFV technologies.
Revolutionary new possibilities
For providers of IT services, the rise of SDN and NFV software should prove to be nothing less than profound on two levels. First, most providers of networking services will be able to use these technologies to create portals through which customers can self-provision network services without any manual intervention required by the provider. At the same time, network service providers will also be able to take advantage of this shift to directly expose network services to developers via open application programming interfaces (APIs). Those developers will be able to program their applications to dynamically invoke network resources on demand as capacity requirements for their applications change over time.
Naturally, network services providers have a variety of operational issues to deal with before either one of those scenarios becomes an everyday IT reality. At this juncture, it’s still not even clear which vendors will dominate the delivery of those services. While Cisco has the inside track given its current dominance of the networking market, an open networking movement coupled with interest in open source management frameworks such as OpenStack is promising to substantially lower the cost of delivering network services. In fact, many of the network operators that expect to reduce their data center operating costs are likely counting on the fact that open networking technologies will be more mature by this time next year than they are today.
Increased competition on the horizon
In general, providers of network services expect that making it simpler to invoke their services will lead to an increase in the consumption of those services. The end result is lower operating costs and enhanced profitability at a time when the total amount of revenue being generated will be rising. Of course, there’s no accounting for competition. If the cost of delivering network services drops, chances are competition between existing providers will increase, and new players will take advantage of inexpensive compute and networking services in the cloud to enter the fray.
In fact, by the end of the decade most IT services providers can look forward to an era where the manual provisioning of network services that used to take months to accomplish will be viewed as being about as quaint as a rotary phone.