Network Functions Featured Article

Telecom Operators and Service Providers Investing Significantly in NFV

September 01, 2016

NFV and SDN were wonderful concepts in theory for many years. Then they made their way into the data center and have been instrumental in building out today’s “hyperscale” data centers in support of mobility, the cloud and a seemingly infinite number of applications and services. And now NFV is proving its worth in the telecom space, as service providers and operators ramp up their efforts to transform their networks to accommodate the IoT and all that it entails.

The 2016 NFV Hardware, Software, and Services Annual Market Report from IHS Markit reveals the massive shift taking place in the telecom industry, as 100 percent of operators and service providers have plans to migrate to NFV, if they haven’t already done so. That migration will propel the NFV market to $15.5 billion by 2020 in the form of NFV hardware, software and services.

The new report looks at what service providers are actually spending on NFV, with 59 percent of carriers having already deployed NFV or in the process of deploying it this year. An additional 81 percent of carriers will take the NFV plunge by 2017. According to the research, the opportunity to deliver consumer and enterprise virtual customer premises equipment (vCPE) will surpass $1.5 billion by 2020.

“The service provider NFV market is larger than the software-defined networking (SDN) market throughout our forecast horizon of 2020, due to the pre-existing and ongoing VNF market,” said Michael Howard, senior research director, carrier networks at IHS Markit. “We expect strong growth in NFV markets in 2020 and beyond, driven by service providers’ desire for service agility and operational efficiency.”

The open source OPNFV project is a testament to just how serious the carrier and telecom worlds have become about investing in NFV. Members include AT&T, which has been migrating to NFV for several years, CenturyLink, China Mobile, Korea Telecom, SK Telecom, Sprint, Telecom Italia and Vodafone. Orange and Verizon have also been key NFV players, with Verizon steadily adapting SDN and NFV since 2009.

Edited by Maurice Nagle

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Events and Activities

NFV & Carrier SDN

September 13-14, 2016, Denver, CO

SDN & OpenFlow World Congress

October 10-14, 2016, World Forum, The Hague, Netherlands

Carrier Network Virtualization (CNV)

December 12-14, Santa Clara Convention Center, California

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