In his VMworld 2014 general session keynote, Pat Gelsinger talked of living in a fluid world where the only constant is change. The ability to adapt quickly and often has become the business imperative and ‘software-defined’ the business mantra. Mobility, Hybrid Cloud, Social Media and Big Data are the driving forces behind the transformation of IT.
VMworld 2014 US – General Session
While enterprises (and consumers) continue to embrace the power of the cloud, an incredible strain is placed on Communications Service Providers (CSPs). They have become the middlemen in a game between consumers and Over The Top (OTT) providers such as Google, Salesforce.com and Netflix.
Increasing traffic volumes are driving infrastructure build costs, but the associated revenues flow largely to the OTT providers. A recent article on Fortune.com quotes Ovum, the research and analyst company, predicting that telecom companies globally will ‘lose a combined $386 billion between 2012 and 2018’, as a result of ‘customers using over-the-top (OTT) voice applications such as the market-leading Skype and Lync’. Statista show European telecoms revenues falling from 304B euro to 290B euro between 2011 and 2013 and forecasting a further dip in 2014 before a slight recovery.
Telecommunications architectures have evolved to be monolithic, proprietary and inflexible systems delivering end user communications services like ‘ships in the night’. They are no longer suitable in a fluid world. But the telecommunications industry is poised to undergo a transformation.
Network Functions Virtualizaton, or NFV for short, takes inspiration from the virtualization of enterprise IT to paint a vision of software-defined telecommunications services. By abstracting the communication services in the form of network applications (or Functions), and running them over Common Off The Shelf (COTS) hardware and general-purpose operating systems, CSPs can utilize automation and resource pooling to radically reduce costs and increase the speed of innovation.
The framework for NFV is being drawn up under the auspices of the European Telecommunications Standards Institute (ETSI). It promises a more sustainable business model. A business model that leverages multi-vendor service functions and a shared infrastructure to deliver services at much lower cost (up to 65%) and with greater agility. Service velocity is increased from taking years to a matter of weeks. And all this is under CSP control. In short, services more suited to a fluid world.
VMware has led the transformation of the enterprise IT with industry-leading virtualization infrastructure based on the principles of abstract, pool and automate. NFV has crystalized a vision of what these same principles can achieve when applied to telecommunications infrastructure: The next great use case for virtualization.
In future blogs where I will look into the opportunities and the potential pitfalls of deploying virtualized infrastructures for telecommunications services.
Nigel Stephenson joined VMware in 2014 to champion VMware’s virtualization solutions for carrier NFV deployments across EMEA. Nigel brings to his current role a depth of telecommunications experience built through the the design, delivery and marketing of networking solutions in a career spanning almost 30 years.