A Great Business Case for NFV

Comments: 0 Runtime: 2:10 Posted: April 2nd, 2015

A challenge with implementing new technology such as NFV requires a solid business case. One such use case, virtual CPE, allows businesses to avoid large investments in purpose-built equipment for branch offices. NFV use cases such as this are still evolving.  

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One of the interesting challenges implementing any new technology, a way of implementing a technology such as NFV is the business case. Now I've talked to a number of service providers, Telefonica, British Telecom, for example. They said to me, "Jim, there's just a lot of things that people are talking about as a used case for NFV that we just can't show a business case for today." One that they have shown a business case for is virtual CPE, and let me explain to you why that's so exciting.

There was a time when I was an engineering manager for a telco. If I was going to put a new service into, let's say, Boston, I would have to buy a lot of purpose-built equipment in each central office. Let's say I'm going to put it into 10 cental offices. I'm going to spend $1 million each on the equipment. If that service did not take off, I throw that equipment away, it's purpose-built. You go through a long kind of an analysis and you put it in, and if it grows you scurry to get some more of that equipment.

In the environment we're in now, I think about virtual CPE. I can have some generic servers in my central offices. I can be acquiring a software, the optimization, the security on a pay as you go, pay as you grow basis. I don't pay anything for it until I have customers, I have minimum investment. By the way, if that service doesn't take off, I can reuse those servers.

Not only does it create a new opportunity for me, in this case saying, "Gee, why do you wind up all those appliances in your branch offices, I'll have them either in the central office of mine or I'll host them on your premise." My cost of entry is almost nothing." I'm seeing a few business cases like that really pop up, and a lot of them still have not evolved

Written by Jim Metzler
Founder Ashton, Metzler & Associates

Jim Metzler is an expert at researching and analyzing emerging technology trends within the networking and service provider space.