Network virtualisation

The topic of network virtualisation is galvanising a great deal of both talk and action by telecom and IT industry players. This paradigm shift is creating new opportunities for telcos, introducing the increased flexibility and agility needed to stimulate the creation of new business models. Still nascent but growing fast, the virtualisation market will, IDATE DigiWorld estimates, attain 23 billion EUR in 2021.

Virtualisation: two promising concepts

Network virtualisation encompasses two complementary concepts: software-defined networks (SDN) and network functions virtualisation (NFV), both of which make use of cloud computing capabilities. These now make it possible to manage a network in a centralised fashion by using software. This creates a number of possible benefits: the ability to replace physical, proprietary hardware with more standard equipment; more flexible, agile, efficient and automated networks; new business models and reduced capex and opex.

Virtualisation: an imperative for telcos

Even if all operators are taking a cautious approach to virtualisation, more and more are incorporating it into their networks, with the support of a number of SDN/NFV solution providers from the world of open source and IT. Over the past several years, top telcos – including AT&T, BT, Deutsche Telekom, Orange, Telefónica and Verizon – have begun to implement SDN/NFV. AT&T has been the most aggressive in this arena, setting itself the goal of having virtualised 75% of its network functions by 2020.

Two types of strategy are being employed, depending on the telco’s main priority:

  • Either virtualise the transport network, often as part of a broader transformation process via, among other things, the creation of dedicated datacentres;
  • Or virtualise network services targeting the business market with SD-WAN solutions, which allow a company to interconnect its various sites via the Internet – i.e. a more flexible and cost-effective alternative to the links currently being marketed by telcos.

Virtualisation to prepare for 5G

With the advent of IoT and 5G, SDN and NFV will have a major role to play in the networks of telcos who plan on employing network slicing. This is a process that makes it possible to allocate the necessary resources to a given service according to the performance required (in terms of latency, speed, capacity) thanks to the ability to create virtual networks on the same system.

 
Operators' new services
Operators that have launched an SD-WAN service (September 2017)
Source: IDATE DigiWorld
 
Telecoms, IT and open source players in the mix
Solutions providers for SDN and NFV rollouts
Source: IDATE DigiWorld