For many service providers, NFV – Network Function Virtualization – is a long term project. They consider the capital investment to be substantial and the technical complexity to be risky.
Take for example network architecture. Migrating existing services to NFV requires changes in the providers’ network topology.
Virtualizing IMS not only requires changing the network but also poses uncertainty when replacing dedicated hardware with standard hardware and software. The initial investment would be high and ROI will only be achieved in a number of years.
If only there were NFV services that do not require redesigning the network, it would generate new revenue opportunities in a shorter, less risky period.
Start Virtualizing New Services
Business Ethernet customers such as enterprises and SMBs are characterized by having high ARPU, passion for quality and changing requirements.
Let’s examine what cloud based services and applications, we can offer these customers that they are not using today.
What if business network services, connectivity, IT infrastructure were available on-demand as-a-service on the carrier network?
For example, an enterprise opens a new branch in a new city.
The IT department would need to acquire, install and configure the following:
- VPN to other offices
- Hybrid cloud connectivity: public cloud direct connect, VPN, cache
- User, device and application aware quality-of-service
- VoIP and PBX support and connectivity
With NFV, these services, and many others, are available as-a-service without redesigning the network or replacing the provider’s core components.
Divide and Conquer
Take a step by step approach for a quicker return on investment. Keep it simple – don’t change your network architecture on day one.
New cloud services, such as firewall and VoIP at the network edge can be made easy.
Focus on populous areas where business customers are located. Place NFV edge devices where you will upsell existing customers. Add, don’t replace existing hardware.
Manage NFV devices with centralized orchestration. Manage devices one by one, just as a customer representative manages clients.
Stickier Business Customers
Revenue isn’t the only upside, as business customers will stick to carriers with NFV services because:
It’s easy – get a service when they want, combine (chain) and configure multiple services as needed.
It’s seamless – office relocation becomes Copy/Paste, as well as new branch opening.
On-demand and auto-scaling- utilizes the carrier’s NFV API for auto scaling based on business needs, retain effort in invested integration.
They will benefit from already available business templates, unified settings per business and big data of the entire user base.
ROI is Less than a Year
Let’s look at the numbers.
NFV devices are located in targeted business areas. Let’s assume 25 percent of the devices provide value added services.
Each customer pays $X for internet connectivity.
Charge customers for new services an additional half of $X. Now they extra pay $.5X.
This means providers earn an extra $.125X or 12.5% more per customer.
This is only in the first year! In the second year, 35% of customers would likely want IT as a service and more services will be available, doubling the average sales price of a customer.
Telco Systems’ OME
Telco Systems’ OME portfolio fully supports the company’s comprehensive evolution plan for transitioning Carrier Ethernet 2.0 to SDN and NFV architectures.
The tools provided with OME are designed to empower service providers and enable them to use their competitive advantages both by optimizing their total cost of ownership and by offering new types of services at a much faster pace to increase their revenues.
The key advantage provided with OME is that not only that it is a full edge solution, but it follows a very modular approach. By leveraging the synergies between SDN, NFV and open innovation, every element (demarcation, aggregation, controller, etc.) can be taken separately to fit each service provider’s needs, or can be bundled as a complete solution.
Telco Systems’ Open Metro Edge Solution is comprised of the following virtualization tools:
- CloudMetro distributed NFV demarcation and aggregation product family
- TelcoApps software products that run over CloudMetro and third party equipment to deliver specific functionalities
- Telco Controller SDN orchestration product
- EdgeGenie Service management system enabling OME solutions