Alcatel-Lucent, Cisco, Google, Metaswitch, Ruckus… and the Unintended Consequences of NFV

Peter Jarich

Peter Jarich

It’s been a good week or so for virtualization in the telco network.

Yes, virtualization is top of mind for most service providers and telecom equipment providers circa mid-2014. And, yes, our own survey data points to virtualization as a priority; our latest inquiry into service provider back office investments puts NFV as the number two investment priority. Specifically, however, a handful of recent virtualization-focused events and launches tell an interesting story when you connect the dots.

  • Ruckus Networks: Virtual SmartCell Gateway. An NFV version of its SmartCell Gateway, the vSCG aims to support large-scale, carrier-grade WiFi service launches.
  • Google: WiFi Service Rumors. Potentially tied to Ruckus, Google reportedly plans to offer subsidized WiFi services to small and medium-sized businesses.
  • Cisco: Cisco Live/C-Scape. At Cisco’s annual user and analyst conferences, virtualization took center stage – applied to almost every service provider business the vendor plays in.
  • Metaswitch: Metaswitch Forum 2014. As with C-Scape, virtually the entire conference was devoted to virtualization, but from the perspective of how to help Tier-2/3/4 operators get from here to there.
  • Alcatel-Lucent: Virtual RNC with Mobily. This is the first customer reference for Alcatel-Lucent’s virtual RNC, the 9771 Wireless Cloud Element Radio Network Controller.
  • DoCoMo: NFV Feasibility PoCs. The provider announced the completion of NFV proof-of-concept trials with Alcatel-Lucent, Cisco and NEC, verifying the feasibility of NFV-based services and promising commercial launches by early 2016.

Taken together, there are two potential takeaways.

If you’re a “glass half full” kind of person, this is all pretty good news. Virtualized network functions are coming to market. Operators see the value and are moving forward with deployments… or deployment plans. Vendors are putting their full weight behind them. Easy enough, right?

The “glass half empty” crowd has probably already seen the worrisome issue here. It’s the presence of Google. There will likely always be some network functions that will need to be owned and deployed by a network operator themselves, such as RNCs that are so intimately connected to the access network. But, if virtualization makes it easier to deploy functions such as carrier-grade WiFi gateways, what’s to stop players such as Google from competing more fiercely with telcos without buying any proprietary hardware? If we are to believe the rumors, the answer would seem to be “not much.” And, who here thinks that glass is half full?

About Peter Jarich
Peter is Vice President for the Current Analysis Consumer and Infrastructure services. Peter and his analyst team monitor and evaluate activities in the markets for Consumer Services and Devices, Digital Media, Fixed Access, IP Services, Mobile Access, and Transport and Routing Infrastructure, Telecom Vendor Services, and overall coverage of the Mobile Ecosystem.

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