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Big Promise: Global uptake of SDN/NFV rises amid challenges

August 16, 2016
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Telecom operators across the globe are deploying various strategies to bring down their operating costs and stay relevant in the highly competitive market. Also, the rapidly evolving technology scenario has made it mandatory for operators to stay abreast of the advancements taking place across the value chain to ensure that they stay adequately ahead on the learning curve. Two closely related technological solutions are rapidly taking centre stage in the telecommunications industry, bringing agility to communication service providers’ networks while saving costs. These are software defined networking (SDN) and network function virtualisation (NFV).

SDN and NFV are primarily enterprise and data centre networking technologies that hold promising prospects for transforming the telecommunications industry. These solutions can revolutionise the way telecom networks are built and operated, and help achieve huge cost savings in terms of both capital and operational expenditure. With the increased use of automation, SDN/NFV can be instrumental in reducing the time to market for an operator and simplify its operations. Operators worldwide have started deploying these technologies for several specific needs such as end-of-life replacements and new technology deployments. However, a complete transformation to an SDN/NFV-based paradigm is still a few years away.

Global uptake

SDN and NFV find immense use in data centre virtualisation and enterprise networking solutions. As a concept, SDN/NFV was introduced some time around 2007, with only a handful of companies investing in its research and development. Between 2008 and 2014, the industry came together to formalise this concept, as a result of which, the global telecommunications industry today is at the cusp of witnessing wide-scale deployment of SDN/NFV. Notably, the Open Networking Foundation (ONF) founded by technology giants such as Google, Microsoft, Facebook, Verizon and Yahoo is at the forefront of promoting SDN through the development of open standards. Meanwhile, in 2013, the Linux Foundation launched Project OpenDaylight, an open source framework, to accelerate SDN and NFV adoption.

As per industry reports, the global SDN and NFV market stood at around $2 billion in 2015 and is expected to increase at a compound annual growth rate of 86 per cent to reach over $45 billion by 2020. In terms of regions, North America is expected to lead the deployment of SDN/NFV in the coming years. Asia-Pacific, including Japan, which currently represents the fastest growing market, is soon likely to replace Europe to become the second largest market. Yet another industry report estimates the SDN/NFV market growth rate for 2016-20 at 46 per cent to reach $18 billion by 2020. Investments in orchestration platforms are expected to reach over $1.6 billion in revenue by end of 2020, accounting for nearly 10 per cent of the total spending of service providers on SDN and NFV. While estimates differ widely in terms of the actual value of the market, there is a clear trend among service providers towards increasing the adoption of these technologies.

The rising demand for mobility, increased uptake of cloud services, varying traffic patterns and increasing complexity of networks, along with server virtualisation, are compelling service providers to experiment with these technologies.

Challenges

While SDN and NFV are poised to be the future technologies that will transform the telecommunications sector, there are certain challenges associated with their integration into the existing set-up.

The key challenge that these new technologies face is the lack of industry standardisation. While the industry has developed open standards, these are by no means sufficient to propel the large-scale uptake of these solutions as service providers are still apprehensive about making the transition to a completely virtualised set-up.

In terms of design, these technologies have a multilayered architecture. The hardware layer comprises servers, storage and networks; the virtualisation layer creates protected environments; and the virtual network functions as well as higher-level network services and applications that run inside these virtual environments. Above these layers are resource management systems, a service orchestration and assurance layer, and the business support layer. All these layers, which are open to multiple vendors, together with management systems, provide and consume mutually agreed-upon resources and services. Achieving the above can be a hard task as the standards for these technologies are yet to be finalised. A multilayered architecture also poses operational challenges such as impact on one layer as a result of a failure on the other.

It is essential to note that communication service providers are currently migrating to an SDN- or NFV-based architecture in a phased manner. Therefore, traditional network nodes in the service provider’s network need to be replaced in a manner that ensures that the benefits of SDN and NFV are extended during the transition period. To this end, these nodes need to be made ready to enable adaptation to a new configuration, along with the provisioning of optimisation mechanisms that simplify network and service operations.

Until the transition to NFV/SDN architecture is completed, the existing network management system will continue to exist. Integrating the existing management system while deploying the new technology is essential to protect the investment, maintain service continuity and drive faster service roll-out.

When an existing system is updated to incorporate new technologies or make in-service software updates as and when they become available, operators need to maintain their service levels. Since a system cannot be simply shut down to install a new software version from scratch, it needs to be prepared to keep applications and services operational while the infrastructure and management systems are being incrementally upgraded.

Another key concern among most operators deploying a virtualised set-up is the security risk it poses. With SDN and NFV deployment, an operator’s requirements in terms of hardware and cloud services may be served by multiple vendors. This increases the security risk caused by a mismatch between the service levels and the architecture offered by different vendors. Further, due to the dispersion of network functions across various vendors and their respective data centres, the physical perimeters become blurred and fluid, making it extremely difficult to manually define and manage security zones.

Conclusion

SDN and NFV provide a promising opportunity for innovation in the communications industry, which is facing the risk of being marginalised to the role of a mere access provider as over-the-top players and cloud providers gain increasing appeal. As such, the industry needs to continuously adapt to new technological advancements. SDN and NFV are being viewed as essential components in future networks. Moreover, as cloud adoption rises, it is becoming increasingly essential for the telecommunications industry to advance networks to a new level of programmability in order to facilitate the continued development of the web and ensure the industry’s relevance in the cloud ecosystem.

SDN and NFV are relatively new technologies in terms of deployment and face significant challenges that are limiting their adoption. However, the ecosystem for these technologies is fast developing and all stakeholders are redefining their role to adapt to this change. The standardisation of these technologies will play a key role in encouraging their adoption. Further, an integration framework that meets the evolving needs of the ecosystem will accelerate technology adoption. Service providers that fail to implement these changes are likely to find themselves left behind with uncompetitive and potentially untenable business and operating models.

 
 
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