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Executive Viewpoint 2017 Prediction: Incognito Software Systems – 3 Ways Virtualization Will Make an Impact

How will virtualization affect the communication service provider industry in 2017?

Already, communication service providers are exploring commercial and residential architectures to deliver new services faster, reduce costs, and provide enhanced return on investment. Over the next 12 months, expect even more developments to build on existing initiatives as providers examine how network function virtualization (NFV) can revolutionize the industry.

Major developments can be expected in three main areas:

  • Network Architecture
  • CPE Models
  • Revenue Generation

New Network Architecture

Network function virtualization, or more likely, a hybrid of NFV and physical boxes, will become more common as operators look for ways to reduce physical platforms at the premises in commercial and residential network environments. NFV enables service providers to become more flexible and cost-effective by virtualizing some or all of the functions associated with dedicated network equipment, reducing the need for vendor-specific hardware. Removing costly end routing equipment not only reduces capital expenditure, it also enhances reliability and availability models, delayers the IP network topology and simplifies the network edge to reduce ongoing operational costs.

Virtualizing network functions also enables the faster roll-out of new services to increase revenue and adapt quickly to users’ changing needs. However, it’s unlikely that 2017 will be the year of pure NFV in service provider networks. Aggregation and core IP networks present significant opportunity for NFV. These portions of the service provider network represent opportunities to separate forwarding and policy decisions through SDN-IP approaches. Edge services such as firewalls, virtual routing bandwidth-on-demand, and enterprise access may require SD-WAN architectures, while other applications focused to customer premises virtualization may be delivered from the provider’s facility, isolated within the customer premises, or a hybrid combination of both.

Virtual customer premises equipment (vCPE) hybrid network designs will enable lower costs and faster time-to-market for new services, although the viability of virtualized functions will depend on the availability of cloud computing and the network services layer in conjunction with virtual gateway platforms. At the moment, most operators are concentrating on commercial instances of vCPE. There is still the issue of cost-effectively scaling the cloud architecture driven NFV model down for residential services — a process that Incognito is working on and we can expect further developments in 2017.

New CPE Models

The next step for those seeking solutions in residential gateway virtualization will come in the form of reduced-cost NFV-capable gateways and a simplified operator subscriber compute domain. An early focus on NFV has already seen a shift of functions currently enabled on customer premises equipment into the cloud, and this area will gain momentum in the coming year.

vCPE gives operators the ability to lower costs by enabling simple devices to access advanced network services in both a subscriber and persona aware manner. Operators can use vCPE to reduce customer premises hardware dependencies and potentially reinvigorate legacy gateways with virtualized network functions. Additionally, this helps unify the user experience across access networks. Reducing the costs of CPE upgrades comes as a result of certifying and testing CPE software functions without having to recertify the entire CPE firmware image and with the benefit of reducing complexity in residential-based hybrid network architectures.

This future is already looking promising in this space, with early efforts underway to support residential gateway compute isolation combined with protocol and signalling interface support for network layer connectivity, per residential subscriber hybrid service function chaining will find early market in 2017.

New Revenue Generation

What use cases are out there for vCPE and virtualized network models? The ability to roll out new services quickly in virtual environments gives operators the freedom to launch new services quickly and personalize experiences for subscribers with value-added subscription services. This could include revenue-generating subscription services that:

  • Schedule bandwidth
  • Control content between devices
  • Control IoT networking
  • Add parental controls
  • Offer real-time WiFi management

Essentially, operators can use vCPE and NFV to create new revenue opportunities  empowering subscribers to define their services. For users, the ability to schedule bandwidth limitations, control content, and enhance automation and IoT networking will be the main drivers toward future virtualized services in 2017.

Incognito Software Systems