Alcatel-Lucent has announced the arrival of its virtualized service router (VSR), a virtualised network function capable of being deployed in an NFV environment. The vendor claims the VSR software is capable of being deployed on general purpose x86 hardware, a form of commoditised off the shelf hardware (COTS).

Alcatel-Lucent claims that by deploying both hardware and software-based routing functionality, with the VSR alongside traditional hardware-based routers, service providers will have the best of both worlds, with enhanced flexibility and service delivery capabilities which can adjust to the needs of its business and its customers.

Speaking to Telecoms.com, Phil Tilley, Marketing Director for Alcatel-Lucent, believes the market now feels that running traditional telco network functions on commoditised hardware and adopting a cloud approach to telco networking is the next logical step.

“The market is convinced that it is ok to run standard telco functions on COTS hardware,” he said. “It’s a natural evolution for us to say that it is ok to virtualise our routing function. So it’s very much looking at the three or four strands of NFV, making sure you’ve got the right functions to sit on the COTS hardware, there’s the management and orchestration of the NFV infrastructure. It’s another proof point of our commitment to NFV. I think we are positioning, addressing and embracing the cloud opportunity. By adopting the cloud approach and technologies with the VSR, we’re looking to enable the best of cloud connectivity.”

While Tilley concedes there will be a certain level of performance benefit if a service provider chooses to deploy the VSR software on Alcatel-Lucent hardware, he does maintain that the software will run perfectly capably on any form of COTS hardware.

“From day one the VSR operating system software has been built with this whole concept of multi-threaded processing. It just so happens having designed that, and running that on our own hardware, we can port the software to run on to someone else’s hardware and receive all the benefits still.”

Infrastructure vendors traditionally generate their revenues by selling physical bits of kit that sit in the network. What will happen to profit margins if vendors readily accept traditional revenue channels are on the wane?

“It’s fair to say that today we get our revenue from selling hardware with the software embedded into it,” Tilley said. “What we do, essentially, is hide the cost of the software within the cost of the hardware. Obviously as we go towards this new model, we won’t get the revenue from the hardware, but we will be licensing the software instead.  So the CSP still has to pay for the software, and our top-line revenue might be a little bit different, but really it’s about contribution and margin within the business. We think we’ll be able to open up new markets and new opportunities with this new, software based approach.”

If anything, Tilley suggests the market is filled with greater opportunity in the future than today. “Actually, our addressable market increases, if anything,” he said. “So while we may lose some top-line revenue from router sales, we actually think that in the short-term that dent will be fairly minimal, but we will be boosting our top-line longer term because we’re opening ourselves up to new opportunities in the future.”

Meanwhile, Michael Howard of Infonetics Research believes a move towards virtualised routing has been an area of interest for observers of SDN and NFV for some time.

“The telecom industry has been waiting to see how router vendors will play in the new reality of an SDN and NFV software-focussed world,” he said. “Alcatel-Lucent is the first major router company we’ve seen that has clearly defined a complete hardware-software strategy to deliver routing in this new era. Carriers will like the fact that the new Virtualized Service Router software is built on Alcatel-Lucent’s long-in-the-field SROS carrier routing code. We know from our research that a majority of service providers want to move some edge router functions off of hardware onto software, and VSR gives them the flexibility to quickly deploy new services on a new cost basis through a combination of virtualized and purpose built edge routers.”

Alcatel-Lucent subsidiary Nuage Networks also announced the launch of its Virtualized Network Services platform, a service provisioning platform designed to enable rapid roll out of virtualised services and bandwidth delivery for enterprise customers by utilising an SDN architecture, and facilitating NFV service delivery mechanisms.