Co-inciding with Mobile World Congress taking place in Barcelona this month, Martina Kurth, research director for Gartner shares her insight around software-defined networking (SDN) and network function virtualisation (NFV), two of this year’s hot topics.

What are SDN and NFV and why are they going to be major MWC talking points?
With the saturation of traditional telecommunications markets, many communications service providers (CSPs) must shift their focus to remain relevant and maintain profits in the evolving digital market. Existing network and operational infrastructures, cannot provide the flexibility required to enable and run new digital services, such as those related to the Internet of things (IoT) or machine to machine communications (M2M). A network architecture that was designed for millions of humans making voice calls is simply not suitable to reliably allow billions of devices (or “things”) to communicate in near real time. This will trigger significant investments in more agile, cloud-centric, software-driven infrastructures for CSPs.
NFV virtualises network functions into building blocks that can be connected to create communication services. SDN is a new architectural principle that separates the control and data planes to increase operational efficiency. This means applications are not tied to specific hardware or infrastructure, and instead can use more or less network resources as required, and share resources with other applications.
CSPs can expect significant savings as they move away from expensive, dedicated, proprietary hardware toward the cheaper, general-purpose hardware that is typical of SDN implementations. This shift will also dramatically reduce the time it takes to “switch on” new services, and will allow more flexibility in scaling resources in line with business demand. CSPs around the world are currently evaluating these technologies, or have completed lower-scale commercial projects.

How will SDN and NFV revolutionise the telecommunications industry over the next five to 10 years?
CSPs will fundamentally change the way they run their network operations and IT. This is because SDN and NFV represent a significant shift away from traditional physical networks toward software-driven operations that run on commodity data centre hardware. In summary, SDN and NFV will change the DNA of operators and the way they create, manage and deliver services to their customers. This will also require transformation of internal organisational structures, networks and IT processes as well as new skillsets. In practical terms, network functions are now enabled simply by switching on a piece of code that can run on any one of the commodity servers in a giant data centre. This means a CSP can switch services on and off automatically according to real-time demand far faster than is possible with legacy infrastructure.

What is the business case for SDN and NFV?
CSPs worldwide are currently exploring the impact of these new technologies on their business. CIOs and chief technology officers (CTOs) are rightly questioning the business cases associated with SDN and NFV technology investments. What will the return on investment and the associated revenue potential for new virtualised services be? SDN and NFV can drive robust revenue from new digital services and service enhancements (such as on-demand virtual VPN services for enterprises) as well as enabling CSPs to access entirely new services and markets. This potential will be achieved through the greatly increased levels of operational efficiency, agility and service innovation that the new technologies bring. Early-mover CSPs should consider investments in SDN and NFV as the only way to take a technology market leadership position in the heavily saturated telecommunications marketplace.

What is the connection with IoT?
Virtualised and software-driven infrastructures will allow the incubation of a wide range of composite services. SDN and NFV provide the underlying cloud-centric operational infrastructure necessary to drive new revenue streams and exploit new market opportunities, such as IoT and M2M. In the new connected world, service delivery has to become more agile to allow flexible configuration changes in order to respond to immediate business needs in real time. This is because the sheer volume of data and analysis — as well as the potential number of possible configurations — are increasing exponentially. CSPs need to invest in appropriate network infrastructures that can handle new digital and IoT partner ecosystems and match the velocity of business decisions, which¬† are increasingly taken by machines. This also requires investments in customer-facing, real-time software orchestration capabilities, such as self-service portals, order management, analytics and partner settlement.