Insight: Realising the business need for network virtualisation

By Massimo Fatato, Managing Partner at Cartesian

Anyone familiar with the industry will know that it’s currently an interesting time to be a Communication Service Provider (CSP). But, as with most sectors, it’s also a very tricky time.

While there are more opportunities than ever before, there is also more competition, coming from both traditional and Over-the-Top (OTT) services, which have changed the rules of the telecom game forever. And, although technological developments are enabling businesses to innovate in new and exciting ways, they are also presenting challenges that are often not easy to solve.

For example, the explosion in customer demands for data is stretching traditional networks to the limit, an issue which is only going to increase in the future as data requirements continue to grow.

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But this isn’t the only challenge putting CSPs under pressure to digitally transform. From controlling costs and increasing agility to efficiently scaling their networks, CSPs have a huge amount on their plate.

This is where network virtualisation comes into play. Technologies such as Software-Defined Networks (SDN) and Network Function Virtualisation (NFV) are being seen as critical to meeting today’s challenges, enabling organizations to leverage the power of cloud infrastructure and realise the potential benefits on offer.

Of course, there are a vast number of variables for businesses to consider, but the value of network virtualization is fast becoming hard to ignore.

Business drivers
Considering the demanding business landscape, it’s no wonder that network virtualisation is quickly gathering momentum, now boasting significant support from the industry’s major players.

Although the technology is still in its relative infancy, the multiple business and operational benefits that virtualisation offers are driving CSPs to start the transition.

For example, in the short-term the likes of greater flexibility, shorter time to market and a reduction in deployment lead times have all been cited as some of the leading business benefits.

But it’s the longer term where CSPs will likely see a real difference. Arguably the biggest opportunity will come through the creation of new services and revenue streams, which will enable CSPs to diversify their offerings and meet future customer expectations. Similarly, it will allow them to respond to issues almost in real time, as opposed to taking weeks or even months as is the case today.

On top of that, virtualisation is expected to bring increases in operational efficiencies through the ability to automate traditionally time-consuming tasks, as well as provide CapEx and OpEx cost savings. This can be realised by reducing the dependency on hardware and cutting expenses around electricity usage, the physical space required and IT labour.

Security is also a key consideration. Network virtualisation has the potential to make networks more secure for a variety of reasons, primarily due to the fact that virtual applications can be isolated and separated from the physical network to help protect against cyber-attacks.

Combine this with the additional intelligence and analytics tools that can be built in to virtualized networks to monitor for suspicious activity and security quickly becomes a clear driver for transformation.

This promise of virtualisation is why 69% of CSPs agree that network operators which do not virtualize their networks will struggle to compete, and why nearly three-quarters (74%) say that operators must implement NFV/ SDN to meet future customer needs.

There is a clear business need for modern CSPs to embrace network virtualisation as soon as possible, making it something that they simply cannot afford to ignore. Those that do, will likely find themselves falling behind their competitors in the race towards the next era of communications.

One step at a time
The combination of these business drivers provides a compelling reason for CSPs to dive headfirst into network virtualisation, but it’s worth noting that it hasn’t all been plain sailing.

Many firms have struggled to quantify the business case, with the ‘softer’ benefits such as increased flexibility being hard to quantify. This has prompted some to suggest that having a broad business case might in fact be easier to justify than any specifics.

What is certain is that there is no “one size fits all” solution to the many problems CSP are facing today, which is why a gradual and staged approach is therefore the most effective way to start a virtualisation journey.
Not only will such an approach support CSPs in reaping the short-term financial benefits, it will also provide a future platform to ease the transformation journey in the long term.

That way, CSPs can surpass their competitors and take the lead in the race towards the next era of communications.