Market Insight

RESEARCH NOTE - Most Service Providers Will Deploy NFV by 2017

August 23, 2016

Michael Howard Michael Howard Senior Research Director, Carrier Networks
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IHS Markit analysis and commentary on the 2016 NFV Strategies Global Service Provider Survey follows.

Bottom Line

  • 100 percent of service providers participating in the IHS Markit NFV strategies survey say they will deploy network functions virtualization (NFV) at some point, with 81 percent expecting to do so by 2017
  • Moreover, 59 percent of operator respondents have deployed or will deploy NFV this year
  • Integrating NFV into existing networks is an issue for a majority of survey respondents, as is the lack of carrier-grade products

Our Analysis

Service providers around the globe are moving toward NFV, which the latest NFV strategies study by IHS Markit bears out. These carriers believe that NFV and its software-defined networking (SDN) companion are a fundamental change in telecom network architecture that will deliver benefits in automation; new, more agile services and revenue; operational efficiency; and capex savings.

Many carriers in 2016 are moving from their NFV proof-of-concept (PoC) tests and lab investigations and evaluations to working with vendors that are developing and productizing the software, which is being deployed commercially.

The carrier mind-set toward NFV is changing quickly. In 2014, there was one standout barrier: operations and business support systems (OSS/BSS). In 2015 and 2016, the top barriers—integrating NFV into existing networks and non-carrier-grade products—show that carriers are very serious about deploying NFV.

The vast majority of early NFV deployments in the next year, and overall, will be for business virtualized enterprise customer premises equipment (vE-CPE), also known as vBranch or enterprise vCPE. Growing in importance over the last several years, business vE-CPE can assist with revenue generation because it allows operators to replace physical CPEs with software so they can quickly innovate and launch new services. 

The industry is still in the early stages of a long-term transition to SDN and NFV architected networks. Carriers will learn that some avenues are not as fruitful as expected, and telecom equipment manufacturers and software suppliers may well invent new approaches that open up newfound applications.

NFV Survey Synopsis

The 26-page IHS Markit NFV strategies survey is based on interviews with purchase-decision makers at 27 service providers around the world that have deployed NFV in their networks or plan to do so in the future. Operators were asked about their strategies and timing for NFV, including deployment drivers and barriers, target use cases, applications and more.

For information about purchasing this report, contact the sales department at IHS Markit in the Americas at (844) 301-7334 or AmericasLeads@ihsmarkit.com; in Europe, Middle East and Africa (EMEA) at +44 1344 328 300 or technology_emea@ihsmarkit.com; or Asia-Pacific (APAC) at +604 291 3600 or technology_APAC@ihsmarkit.com.

Geography
Global
Research by Market
Mobile & Telecom
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