When NFV first emerged, the immediate benefit operators envisaged was capex (capital expenditure) savings. Fairly quickly this reason for doing NFV started to drop down the list because people realized that a high percentage of the cost of network elements is in the software not hardware.
There’s also been a lot of noise around NFV and opex (operating expenditure) savings, but given all the operational and organizational changes associated with transitioning to NFV, some operators believe that a reduction in opex will only be achieved long term.
One of the greatest challenges that mobile operators face is growing demand for bandwidth. The following example will provide a different take on the real business benefits of NFV.
The image above displays regular use, as data goes from the handset to the cell site, then from the cell site across to the first aggregation site. Traffic is then typically brought back to a distribution site where all of the content is actually delivered.
If you're running an application on your handset like ESPN, Google, or Netflix for example, the traffic is going from that distribution site back to your application. This drives a massive amount of bandwidth and the highest value is between that aggregation site and that distribution site.
The content companies like Google, Netflix, and ESPN are typically willing to build closer to the edge of the network. They'd move their traffic to the aggregation site for example, because they're trying to ensure the best quality of user experience. Since those services go through S and P gateways as the anchor points, they usually end up staying at the distribution sites because of the cost of moving physical gateways.
If however, those gateways were virtualized (like in the image above) and could run on standard computer hardware, it would be possible to run whatever you needed at the distribution site and whatever you needed at the aggregation site. That would enable these heavy content users to move more of the traffic out to the edge. This would relieve the pressure and create a significant cost reduction for the mobile operator.
The flexibility that NFV is offering here has real potential for business value. To learn more through operational use cases watch the on-demand webinar, “NFV’s Biggest Barrier: Overcoming the Operations Challenge”.