Network function virtualisation (NFV) and software-defined networking (SDN) are being actively deployed across industry verticals and their application is no longer limited to the telecom and IT sectors. They have reshaped industry workings, enabling the transition from traditional integrated hardware-centric solutions to modular hardware-agnostic frameworks. Of late, the SDN market has witnessed exponential growth owing to the widespread adoption of new networking technologies. The use of different types of networking architectures has increased the complexity of managing and controlling networks. As per a 2019 Global Market Insights report, the SDN market is estimated to grow from over $8 billion in 2018 to $100 billion by 2025. Further, the Asia-Pacific SDN market is anticipated to grow at a compound annual growth rate (CAGR) of over 40 per cent during the projected duration. The SDN controller market is estimated to grow at a CAGR of over 40 per cent during this period.
The main function of NFV is the separation of software and hardware platforms, whereas SDN is a network architectureapproach based on the idea of decoupling the control and data planes. Thus, these technologies can provide significant improvements in terms of agility for effective resource utilisation. With more and more data being stored on the cloud, SDN and NFV technologies have gained significant uptake. A look at some of the key applications of SDN and NFV in enterprises across verticals…
From enhancing existing features such as online banking to implementing emerging technologies such as blockchain and chatbots, financial institutions have always had a tech-forward mindset. As per the International Data Corporation, financial institutions are actively moving towards software-defined wide area network (SDWAN) in order to optimise bandwidth. SD-WAN, SDN and NFV are making WAN flexible, responsive and agile, which is critical for financial services companies. SDN also makes networks in the financial sector better secured, as part of a comprehensive and uncompromised connectivity strategy. Further, with banks and credit unions increasingly expanding several branch locations, SD-WAN can simplify business provision and efficiently manage networks across several locations. For instance, the Philadelphia Federal Credit Union (PFCU), which is spread across 11 locations and has over 118,000 members, has recently replaced its legacy MPLS network and architecture with 100 Mbps Ethernet-dedicated internet and SDWAN. With this, PFCU has been able to reduce the incidents of manual intervention and improve customer experience.
SD-WAN has reshaped the manufacturing sector by providing IoT connectivity, cloud computing and most importantly, security. As per the 2019 Global Market Insights report, the share of the SDN market in the manufacturing industry is expected to register a growth rate of over 40 per cent by 2025. This can be attributed to the increasing proliferation of advanced technologies such as IoT and machine-to-machine communication. Today, the needs of large-scale manufacturers revolve around real-time information sharing across multiple operating functions. A resilient SD-WAN can cut down network downtime by detecting outages in real time. Further, it can automatically move to working data paths to mitigate system downtime. SD-WAN also helps manufacturing entities to meet the ever-changing IT demands by making provisioning and integration simple. It eliminates the need for multiple duplicate devices like firewalls, routers and WAN optimisers. It streamlines cloud migration and optimises software-as-a-service and other communications. However, for most manufacturing companies, network complexity is an ongoing challenge. SD-WAN can monitor differing data types to ensure that enough bandwidth is allocated to high priority, low latency applications.
Healthcare is an industry that is ideal for 5G application. Technologies such as electronic health records, digital imaging and telehealth are fundamentally data intensive, and require high bandwidth and processing power to run effectively. To meet these requirements, organisations are using virtualisation technologies, which help in reducing the hardware requirements. This translates into cost and operational efficiencies.
Meanwhile, an increasing focus on medical data security has healthcare organisations looking for new ways to handle internal and external threats. To this end, SDN can provide the security and flexibility needed to transfer patient data from one end point to the other. Further, using an SDN controller, organisations can provision their network resources in all locations, saving time and money. Centralised management is also beneficial for network security, with SDN controllers providing a central point of control for implementing policies. Recently, Apollo Hospitals in India has partnered with Microsoft to leverage its AI-powered cardiovascular disease risk score API (application program interface). The AI solution is designed specifically to predict the risk of cardiovascular disease (CVD) in the Indian population, and drive preventive cardiac care across the country.
IT and telecom
NFV has the potential to bring about significant change in the way telecom networks are built and operated. NFV provides a standards-based approach to virtualising a range of telecom applications, thus enabling them to run on industry standard servers. With India planning to roll out 5G telecom services in the coming years, operators will adopt new network architecture under which virtualisation will be one of the critical aspects. SDN and NFV are redefining the speed at which telecom and IT players can deploy services. SDN and NFV are redefining the speed at which operators can deploy services to monetise faster. SDN separates network control functions from network forwarding functions, while NFV virtualises network forwarding functions and other networking functions run on proprietary, dedicated hardware.
The industry is increasingly adopting NFV. AT&T aims to control 75 per cent of its core network functions with software by the end of 2020. Further, Vodafone Ireland recently launched its SD-WAN solution for Irish businesses. Meanwhile, the major service providers in the US, Europe and a few countries in the AsiaPacific region are scaling up investments in SDN and NFV. However, the adoption rate in India is still slow because technology standardisation and implementation are at a nascent stage. Many large telcos in India have not adopted SDN in a big way due to the lack of confidence in the maturity level of SDN solutions.
Both online and offline retail are becoming increasingly dependent on SDN and NFV. As per Gartner, technology spending is expected to grow 3.6 per cent globally over the next three years in the retail segment. Virtualisation allows retailers to maintain and run multiple virtual servers using only one or two physical servers. SDWAN can revolutionise how distributed businesses such as retail store chains connect their headquarters to their remote locations. The technology separates the network from the control plane and traffic management from the hardware, thereby increasing the flexibility and scalability. Meanwhile, fashion retailers can benefit from SDN to change the way customers buy clothes online and in stores through virtual fitting rooms. Customers can try on clothes through virtual and augmented reality. Further, retail stores are now placing sensors around the store to help customers navigate the location or get discounts based on their shopping activity. For instance, Beacons, a low-cost IoT device, communicates with the customer’s smartphone inside the store through a Bluetooth signal to provide an enhanced shopping experience.
Further, SD-WAN can improve bandwidth efficiency and optimise operations and productivity as it prioritises bandwidth-intensive retail workloads. For instance, Dubai-based Majid Al Futtaim Retail, which holds the exclusive franchise rights to operate Carrefour in 38 markets across the Middle East, Africa and Asia, is deploying SD-WAN to provide an omnichannel customer experience. The retail sector is slowly adopting SDN for connecting stores across locations. For instance, Gap, Inc., an American clothing and accessories retail giant, started leveraging SDN in 2015 for connecting its stores over public internet using encrypted connections. The company has installed over 800 softwaredefined routers in its stores providing 1015 times more bandwidth to each store than it previously had. However, there are still challenges pertaining to complexity across verticals and modernisation of the network and instore IT infrastructure.
The way forward
Going forward, the adoption rate of SDN is expected to grow owing to the growing demand for data centre services in businesses. Network traffic within data centres is leading to congestion due to high performance workloads. This can efficiently be handled by SDN as it provides global visibility and control over network flows. The biggest demand driver for NFV would be carrier network operators that plan to change the design and implementation of network services.