SDN/NFV – Is it the breakthrough CSPs need to help level the OTT playing field?

The business communications services market is going through one of its most challenging periods at the moment as CSPs struggle to come to terms with the demand for faster, more reliable and feature-rich services from their customers, whilst also dealing with increased competition and the inevitable pressure this puts on prices. Although this is a typical and predictable scenario in what is a rapidly maturing tech-based market, it means that service providers cannot afford to assume that their customers will continue to renew their contracts out of a sense of loyalty, no matter what.

Friday, 18th July 2014 Posted 10 years ago in by Phil Alsop

With increased choices for core communications requirements such as telephony and business application services readily available from specialist 3rd party providers in the Cloud, the CSPs’ pipe is now in danger of becoming regarded as just another basic utility along with the mains power and water services any organization needs to function. The challenge for CSPs is to find ways to tap into the new revenue potential, and compensate for ARPU decreases, by offering innovative new services themselves and fighting back against the OTT players who are increasingly eating more of their lunch. But it is not easy to see how this can be achieved without a radical change to their existing core infrastructure and CPE access technologies.

Given this challenging picture, the arrival of SDN/NFV technology on the scene could be the timely and welcome development CSPs have been looking for. With the potential to level the playing field and enabling the rapid rollout of new services virtually on demand, service providers could realistically begin to compete on price, features and functionality with pure-play hosted service operators.

SDN, and NFV functionality in particular provides the prospect of enabling service providers to add new features or switch existing services on and off in alignment with customers’ changing needs without having to install new network edge devices or change the CPE. When combined with the ability to remotely manage and provision unlimited numbers of individual routers from a central office location it means the proposition could literally be a game-changer for service providers.

SDN/NFV however represents both opportunity and challenge for CSPs. Its promise of agility, flexibility and reduced costs are highly attractive but implementing SDN/NFV across their current silo-based organization and changing well-established business practices will be a non-trivial and lengthy set of people-oriented tasks to navigate. CSPs are also looking to vendors to progress beyond architectural and vision statements and show them some real use-cases for this new technology.
This also makes for an interesting and exciting period ahead for router and EAD vendors in the race to be first to market with their SDN/NFV enabled products.