The digital revolution has made it imperative for telecom operators to upgrade their network infrastructure to orchestrate and deliver easily scalable services. Central to this network upgradation is virtualisation that decouples the functioning of a network from its physical infrastructure, making it more efficient and agile. Globally, telecom operators are adopting network function virtualisation (NFV)-based service delivery model to cope with the dynamic user and QoS (quality of service) requirements. NFV is helping operators move traditional network functions out of the physical hardware such as load balancers, firewalls, subscriber policy management and mobile radio access network, and run them as virtual network functions.
Telecom operators are increasingly using NFV to manage and provision network services from a centralised location, thereby enabling faster and cost-efficient delivery of on-demand applications, with minimal disruption. The size of the global NFV market, according to industry estimates, is expected to reach $70 billion by 2024. NFV uptake is being driven by the growing adoption of mobility in enterprise IT infrastructure, lower telecom carrier costs, and commercialisation of 5G technology. Moreover, enterprises are deploying cloud-based NFV solutions to scale up their networking infrastructure in order to meet increased workloads and reduce the cost incurred in procuring additional hardware appliances for supporting new network services. The increased adoption of NFV is also helping enterprises enhance their ability to deliver better network functions performance with lower data centre rack space, power and cooling requirements.
Business case for virtualisation
The roll-out of telecom services requires deployment of special proprietary hardware devices, which results in a static chain of network components. This limits the ability of telecom service providers to expand their networks and roll out innovative network services. Moreover, operators often resort to over-provisioning, that is, installing much more hardware than required, to prepare for the future demand for telecom services. This increases the overall cost of network deployments and it often takes years for the extra capacity to be actually put into service. NFV, on the other hand, gives operators the flexibility to dynamically increase the network capacity on an as-needed basis. The outlay of physical networking equipment and overhead costs of running and maintaining the network are significantly reduced with NFV deployment.
Besides minimising the footprint of hardware deployment needed to support services, virtualisation also significantly reduces the time-to-market for new services compared with legacy systems. Hence, by using virtualised infrastructure, operators are able to reduce both their operating as well as capital expenses, thereby increasing profitability. Hardware costs are reduced by using shared servers rather than hosting dedicated appliances, and operational costs are reduced by having less equipment to maintain. Moreover, with virtualised networks, operators are able to deliver enhanced user experience and leverage new business opportunities emanating from the digital revolution.
NFV also helps improve the security of the network infrastructure by enabling operators to add capabilities that are not cost-effective in a traditional hardware-based environment. For example, service providers can roll out tap-as-a-service capabilities, allowing them to see real-time traffic flows on more parts of the network than previously possible. This helps operators gain a real-time network view, which is useful for detecting network anomalies and increasing security.
Virtualisation allows telecom service providers to deliver additional features to their customers such as virtual firewalls, storage and expanded bandwidth in an on-demand model. In this way, service providers can employ payment models that are more in line with utilities than traditional telecom companies. This “pay-as-you-go” approach helps improve overall customer experience by providing more transparency to service costs and giving users the flexibility to choose individual features in their service package. Enterprise customers stand to benefit immensely from this arrangement, as they are able to incorporate numerous cloud and virtualised features from a single telecom service provider.
Currently, the adoption of NFV is largely driven by the enterprise space. Enterprises across various verticals are using NFV to deploy a centralised management framework for automating network devices. NFV is helping enterprises automate network services like firewall rules, security groups and load balancers. Further, NFV is increasingly being used to automate hybrid cloud networking, which is often handled through manual configuration. Going forward, businesses are expected to move towards bring-your-own-licence and pay-as-you-go cloud infrastructure NFV models to derive an enhanced value from network virtualisation.
Enabling role in 5G roll-out
Virtualisation is also poised to play a key role in accelerating 5G deployments. 5G promises to deliver any type of telecom service, anywhere. Virtualisation will make this possible by enabling the delivery of services and applications using software rather than specialised hardware. The high flexibility of NFV solutions will allow independent scaling and deployment of services to meet the throughput and processing requirements of different 5G services. NFV will help operators scale easily to support 5G expansion and configure their networks to allow a seamless interaction among different services inside the core network. Besides, NFV will allow a 5G physical network to be divided into various virtual networks capable of supporting multiple radio access networks across different customer segments and environments.
Key challenges in virtualisation
While virtualisation promises significant improvement with regard to network performance and cost optimisation, the transition towards a full virtualised network is fraught with challenges. For one, till the time that migration to all-virtual networks is completed, enterprises and service providers will have to deal with a combination of legacy networks and new virtualised networks, thereby requiring them to manage a multivendor environment. A partial virtual environment with physical devices can cause performance issues in service delivery. NFV also demands a process realignment so that the traditional and the virtual infrastructure can be managed simultaneously.
Moreover, unlike conventional IT environments, NFV requires managing IT outside enterprises’ own premises, which removes the element of controllability and raises security concerns. Further, the optimal value of virtualisation will not be realised until operators’ operations support systems and business support systems are aligned with the new virtualised infrastructure.
The transition towards an all-virtualised framework is also neither cost-effective nor is it easy for operators as the existing infrastructure needs to be de-installed and removed to make way for virtualised functions. In order to migrate NFV-driven networks, operators and enterprises will have to not just modify their network architectures but also overhaul their business models and make organisational changes. Virtualisation requires a fundamental change in the way networks are controlled, which necessitates a completely different approach to network and employee management.
The way forward
Although virtualisation is still at a nascent stage, it is gradually transforming the networking industry globally by helping operators bring down their hardware and software requirements substantially, and achieve higher value through cloud-based networks. By running a network based on NFV, operators are finding it easier to expand and modify the network, and provide considerably more flexibility to their customers. NFV is, therefore, emerging as a cheaper, more flexible and more scalable alternative to traditional infrastructure.
NFV has already begun to converge with the existing legacy equipment and a huge surge in its adoption is expected in the next few years. In order to meet the requirements of a transition towards virtualised networks, it is necessary that the new architecture must provide support for a dynamic, real-time network and service changes in response to network events.
While globally major service providers are scaling their investments in NFV, it is about time that Indian operators accelerated their NFV deployment plans as well. Indian operators are currently struggling to recoup their huge investments in spectrum because of the pricing pressure and low ARPU. NFV can help Indian operators reduce costs, speed up service deployment, maximise resource utilisation, reduce network complexity, and enhance scalability, besides offering on-demand and differentiated services. Virtualisation will also augur well for the roll-out of 5G services in the country, which would necessitate the adoption of a dynamic, flexible, programmable and virtual network architecture in order to ensure a steady flow of revenue and sustainability for service providers.