By Cris Wendt
The large scale adoption by the telco carriers of Network Function Virtualization (NFV) in the upcoming year presents many challenges to network equipment manufacturers who supply computing and network solutions to those carriers. The basic premise behind NFV is that it enables the large carriers to realize an expandable and elastic solution to the ever increasing capacity and performance needs of a large data center by replacing much of the physical hardware with virtualized network functions that run on blade servers. Functions such as security and routing are primarily software functions. This transformation has a dramatic effect on network equipment manufacturers who provide solutions to the large telco carriers – a business model and supply chain built upon building, selling and deploying physical hardware must be extended to enable the deployment of those products as virtual software or virtual appliances called virtualized network functions that run on blade servers.
Cracking the code of NFV business model transformation is reminiscent of how the Enigma-machine encrypted messages used by the Germans in WWWII were finally broken by the crypto analysis team at Bletchley Park (dramatized in the recent movie, “The Imitation Game”). The Bombe machine was spinning endlessly until it was realized a special code was needed to kick-start the analysis – a code that was found only after experience understanding the dynamics of human behavior.
For NFV, we have found that code after working closely with many network equipment manufacturers to help them to establish a roadmap and solution for deploying NFV within their business. Our secret code is simple, but far reaching consequence – we call our code The 3 P’s:
Price – deploying virtual appliances which are used in an elastic (vs static) deployment model requires hardware companies to understand the meaning of a “software license”, and how to properly monetize value through elasticity and capacity management. By defining the correct model to match the use case of the enterprise and telco carriers, new usage and capacity based meters and pricing are established.
Protection – by their very nature, a virtual appliance can be moved and copied. However, the intellectual property (IP) contained within a virtual network function must be protected such that it cannot be copied and used outside the bounds of the license rights. This can be very tricky, but we have found ways to help network equipment manufacturers protect their virtual network function IP, while enabling the virtual network functions to be flexibly deployed to enable the new pricing models described above.
Provision – most network equipment manufacturers have supply chains and infrastructure designed to deploy physical devices through a varied distribution channel. The selling of software-based virtual machines requires careful planning and design extensions to handle the needs of software and managing the associated software lifecycle to enable “on demand” deployment, customer self-service and maximizing recurring revenue.
- Read the Profiting from the Transition to Physical + Digital Solutions white paper
- View the Business and Technology Trends Impacting Network Equipment Providers video
- Visit us at the Software Telco Congress -- The SDN & NFV Event in Miami January 28th – 30th at Booth 520 and attend our joint session with Polycom on Considerations When Transitioning to Physical + Digital Solutions