Software-defined networking (SDN) and network function virtualisation (NFV) are reshaping the workings of various sectors and their application is no longer limited to the telecom and IT industry. These technologies are enabling a transition from traditional integrated hardware-centric solutions to modular hardware-agnostic frameworks. As per industry reports, the global SDN and NFV market size is expected to reach $44,900 million by 2025, registering a growth rate of 17 per cent in terms of revenue. While SDN decouples network control functions from network forwarding functions, NFV virtualises network forwarding functions. Enterprises across industries believe that SDN and NFV will help them in providing better services as customer demand increases, ensuring more flexible networks and services.
A look at some of the key applications of SDN and NFV in enterprises across verticals…
Manufacturing
SDN and NFV have transformed the workings of network architecture acrosss industries, including manufacturing. Enterprises in the manufacturing industry have been integrating NFV and SDN to simplify the design and deployment cycle of their services. Global Market Insights predicts that the share of the SDN market in the manufacturing industry will register a growth of over 40 per cent by 2025. This will be driven by the increasing proliferation of advanced technologies such as internet of things (IoT) and machine-to-machine communication. As manufacturers move towards digitalisation, their requirements from advanced technologies are becoming more focused on real-time information sharing across multiple operating functions, manufacturing locations, partners and suppliers. To this end, the industry is using SD-WAN for applications such as real-time audio/video monitoring to manage the production line. Further, the technology provides security, cloud computing and IoT connectivity, which is helping manufacturers better understand supply chain information. In addition, with the help of SD-WAN, enterprises are strengthening their network visibility for managing IoT end points and prioritising traffic. The technology also addresses the network complexity challenge faced by enterprises by allocating enough bandwidth to high priority, low latency applications.
Healthcare
The digitalisation of the healthcare ecosystem has come into focus with the outbreak of the Covid-19 pandemic. While some enterprises are advancing their adoption of SDN and NFV technologies, others are yet to join the league. Enterprises in the healthcare space are using virtualisation technologies to move towards critical applications such as telehealth, electronic health records and digital imaging. These applications are data intensive, and require high bandwidth and processing power to run effectively. Thus, virtual technologies help in reducing the hardware requirements. With the help of SDN, hospitals can prioritise critical applications over any other communication as SDN can help differentiate between patient records for routine check-ups and those for emergency. Besides, SDN provides better patient monitoring and required security, and enables transferring of patient data from one end point to another.
Retail
As the retail sector is moving towards customer-focused services, enterprises are adopting virtualisation technologies to transform their offerings. The retail industry, both online and offline, is heavily dependent on SDN and NFV as they not only optimise operations and productivity, but also enable retailers to expand businesses to new geographies at reduced costs. With centralised management, enabled by SDN architecture, enterprises in the retail sector can monitor the network performance from a centralised controller. This provides them greater flexibility and empowers them to seamlessly try new services and set up new stores in different locations.
Meanwhile, fashion retailers can benefit from SDN to change the way customers buy clothes online and in stores by introducing virtual fitting rooms. Customers can try on clothes through virtual and augmented reality. Further, by combining broadband, multiprotocol label switching (MPLS) and long term evolution into a single network, SD-WAN ensures efficient delivery. Moreover, the technology can address the growing bandwidth needs to deliver diverse audio and video content to users. In addition, it provides the flexibility to prioritise and balance traffic across various WAN services and streamline additions or subtractions of services. With the help of this technology, retailers can use workflow automation processes to streamline inventory management, sales and other e-commerce processes.
Financial services
In financial services, SD-WAN, SDN and NFV are making WAN responsive, flexible and agile, which is critical for companies in the sector. As per the International Data Corporation, financial institutions are actively moving towards SD-WAN in order to optimise bandwidth. Further, these technologies are enabling financial sector enterprises to withstand competition from fintech companies and a more demanding client base. The most important requirement in the sector is ensuring the security of data and networks as part of a comprehensive and uncompromised connectivity strategy. To this end, SDN and NFV can be deployed to make networks more responsive and secure. That apart, SDN offers many business benefits to financial institutions. These include centralised provisioning and management, greater application control, lower capex and opex and traffic shaping, and prioritisation.
Further, SD-WAN simplifies business provision and can efficiently manage networks across several locations. This helps banks and credit unions seamlessly expand and operate several branch locations. For instance, the Philadelphia Federal Credit Union (PFCU), which is spread across 11 locations and has over 118,000 members, has replaced its legacy MPLS network and architecture with 100 Mbps Ethernet-dedicated internet and SD-WAN. With this, PFCU has been able to reduce the incidents of manual intervention and improve customer experience. Going forward, SD-WAN, SDN and NFV will make financial services companies flexible, responsive and agile.
Logistics and transportation
The networking requirements of the logistics industry are rather unique, and meeting them with legacy technologies can present a major challenge. To ensure safe and smooth transportation, constant connectivity is required using centralised tracking and management systems. Since traditional MPLS connectivity has very limited bandwidth due to cost constraints, the industry has started adopting SD-WAN solutions. These solutions help enterprises leverage lower-cost, in-country connectivity from multiple providers, thus ensuring greater bandwidth availability and resilience, even in remote areas.
IT and telecom
SDN and NFV are redefining the speed at which telecom and IT players can deploy services. Further, as India is looking to roll out 5G services, telcos will adopt new network architecture, with virtualisation as one of the most critical aspects. According to a recent report by MTN Consulting, SDN and NFV and 5G deployments will drive up telco software spending in the coming years.
With the help of these technologies, telecom operators are monetising their range of cloud services as SDN and NFV technologies are providing automation, bandwidth flexibility, and programmability. These cloud services are linked to 5G, connected cars, smart homes, IoT and more. In addition, SDN can decouple network controls from hardware, allowing them to be managed through a more flexible software layer. As the technology reduces the dependence on hardware, it also helps IT and telecom players in reducing their capex. As per McKinsey, telcos that add NFV to the cloud or any 5G network can lower their capex by 40 per cent.
At present, major IT players such as Amazon, Google and Facebook have significantly increased their R&D investment in SDN and NFV. Further, while NFV is helping telcos in rapidly launching innovative network services, SDN is impacting the way they build and operate their data centres/cloud networks.
Conclusion
Going forward, SDN and NFV are expected to transform the network and service architecture of enterprises across sectors. SDN and NFV technologies are complementary as the growing use of NFV is also fuelling the adoption of SDN. While SDN focuses on the control plane, NFV critically optimises the actual network services that manage the data flow. With the ever-increasing storage of data on the cloud, SDN and NFV technologies will gain significant uptake in the future.
