This past year has indicated that telcos are willing to deploy network functions virtualization (NFV) for new services, but they are still reluctant to do so when it comes to traditional offerings.

According to a recent report by ABI Research, this is mainly derived from the challenge of software licensing. Analyst Lian Jye Su claims that the decoupling of hardware and software means that telcos can now adopt generic hardware for their NFV infrastructure. As a result, hardware vendors are transforming their business models from one-time sales transactions to ongoing usage-based licensing models, tiered by hardware storage and computing capabilities.

Another report by ETSI Group highlights the fact that the huge diversity of license management mechanisms across VNF providers makes service provisioning and license renewing operations more complex, error prone and time consuming. It also makes it difficult to deal with VNF license usage information for settlement between the service provider and the VNF provider.

Clearly, large companies are much more open to the idea of using several vendors for different services. So, for example, Shawn Hakl, Verizon’s vice president of new products and innovation, announced at the 2017 NFV World Congress that his company would soon be launching an open source white box solution that runs services from multiple vendors.

This follows a similar announcement earlier this year by AT&T, which had already held a live field trial with multiple suppliers where it tested an open source, white box switch carrying customer traffic.

At the same time, however, the licensing problem remains, and the fear is that large telcos are deterred from using many different vendors as they hesitate to engage in licensing management. This is a major challenge which poses some serious technical and financial challenges.

The main technical problem is that it prevents automation. ​VNF license management hasn’t changed with the times and is difficult to handle. The main issue is that the service provider must separately license each VNF activation, often out of a server that the VNF vendor operates on the cloud. This process stands in clear contradiction to the desire to introduce fully automated processes as it prevents the automation of the full chain of distribution.

To make progress, VNF vendors must adopt a trust-the-service-provider approach and sell VNF pools that are reusable. This means that the license management for VNFs and NFVi-OS must change into more consumer-oriented behavior.