In 2012, the telecommunications industry became awash with talk of a new and potentially disruptive technology that could herald in a new era of networking.

In the months and years since, Software Defined Networking, or SDN, has grown to more than just a buzzword. Coupled with its complimentary, but not mutually-exclusive, counterpart Network Functions Virtualization; the burgeoning carrier network virtualization industry has learned to crawl, walk and run at a pace.

The traction gained by both SDN & NFV since rising to prominence in the early part of the decade is, so far, proving to have a solid value proposition behind it. Promises of optimising network infrastructure capex and opex give a glimpse of an early return on investment. Efficiency gains in terms of traffic flow management, programmatic control of routing and switching protocol, and automated management of complex multi-vendor network architectures are seen as the core value proposition behind the adoption of the two initiatives. These promises afford service providers the opportunity to rapidly deploy new and existing services, and enhance quality of service through automated network management.

SDN stems from a collaborative research project between Berkley and Stanford Universities, and the concept quickly gained industry backing by the Open Networking Foundation (ONF). With founding support coming from 6 of the world’s largest network operators (Deutsche Telekom, Facebook, Google, Microsoft, Verizon and Yahoo!), the ONF has since pioneered the development and the wider industry adoption of the OpenFlow protocol.

In 2012, a core group of Tier 1 operators identified the need to reduce network complexity and reduce the amount of redundant hardware located in and around the network edge.

As a consequence, the Network Functions Virtualization initiative was founded, and soon found a home as a working group within ETSI, the European telecommunications standards body. With companies such as AT&T, BT, China Mobile, Deutsche Telekom, NTT, Orange, Telefónica and Verizon behind the group; unprecedented interest and demand from the wider industry led to the formation and rapid development of the vastly comprehensive working group.

SDN is founded on the “softwarized” control of routing and switching protocol within network layers 0-3. NFV, however, focuses on taking hardware functions and consolidating them on to high density servers in the data center.

Similarly to SDN, NFV promises reduced capex and opex within the network, as well as increased agility and reduced time to market. It is worth noting, however, that the methodology and applicability to the network differs.

In the past, the industry has become well acquainted with buzzwords and hyperboles which promise the world and under-deliver, but Alcatel-Lucent thinks it’s different this time.

“We have seen cloud computing and server virtualization have a major impact in reducing the costs and increasing the flexibility within the IT industry and NFV is about bringing these same principles to the telecommunications sector,” says Phil Tilley, who is Alcatel-Lucent’s marketing director for cloud solutions and strategy.

“The combination of NFV with SDN will bring a new level of flexibility and openness to the telecommunications services we all use on a daily basis. If these techniques are not embraced and adopted then we will see this sector not meet the price, flexibility and experience expectations of the increasingly demanding users. Enterprise customers can expect to see faster delivery times, more scalable capacity, resource on demand, integration of new services and greater control over the services the buy and the way they get delivered and billed,”

Brett Brock, an engineer with Cox Communications believes that the flexibility afforded by both SDN & NFV is the key reason why they’re not being seen as vital to the industry.

“More and more, the industry’s winners and losers will be determined by two factors; speed and scale. The less you have of one the more you will have to have of the other. Virtualization is the key enabler of both. OTT business models will continue to place down-ward pressure on CSP revenue,” says Brock.

He goes on to cite business motivations as one of the imperatives: “SDN & NFV will create much needed separation between the cost of capital and total operating cost. Also, the required rate of innovation will continue to increase for the foreseeable future.”

Coupled with cloud computing, which is enabling innovative start-up companies to join the service delivery space, SDN and NFV deliver the potential for carriers and service providers to re-establish themselves as the primary outlet for enterprise network services. In the face of established cloud service providers such as Amazon or Rackspace dealing directly to enterprise consumers, pressure is mounting on telcos to renew service delivery capabilities with increased speed and agility, as existing revenue streams become increasingly competitive.

“Here again, speed and scale will be the primary determinate of winners and losers. Cloud service delivery will lower the entry barrier for upstarts and disruptors entering the enterprise market. The service providers’ mastery of SDN and NFV will turn the cloud delivery model to an advantage for established enterprises through the delivery of an end-to-end integrated technology stack,” says Brock.

Still in its relative infancy, early use-cases for NFV have been identified, and Proof of Concept (PoC) studies are under way. Targeting the “low hanging fruit”, functions which are ripe for the picking, Deep Packet Inspection, Dynamic Service Chaining, and Customer Premises Equipment are in the process of being virtualized, and scaled back to the Data Center.

It’s a movement which is moving very quickly. At the time of writing, 23 PoC trials have been approved or are in the process of being conducted. The most recent of which began in May, and focuses on the end to end management and orchestration of the virtualized LTE core.

Managed by SK Telecom and integrating solutions from HP, Samsung and Telcoware; the PoC intends to bring together an NFV infrastructure (including SDN switches, network, compute and storage architectures) underneath Virtual Network Functions, including vIMS, virtualized evolved packet core (EPC) and virtualized value added services (VAS).

The unification of SDN underneath an NFV architecture highlights the requirement for an advanced management and orchestration model. In a virtualized paradigm featuring interoperable/multi-vendor architecture, a unified orchestration platform provides an abstraction layer between the physical infrastructure and carrier network applications. Such abstraction allows carriers to configure and programme the network more simply, without the need to manually type in hundreds, if not thousands, of lines of code across multiple network devices. This simplification can be extended by solutions that can facilitate rapid service scale-out and on-demand provisioning of infrastructure to meet the demands and requirements of the business and its customers.

Despite SDN technology promising openness and vendor agnosticism, by its very definition and philosophy; network infrastructure supplied by the industry’s most prominent hardware & network vendors is traditionally proprietary in its nature. Hypothetically this means that hardware from Vendor-A can only be coded and controlled by a proprietary Vendor-A orchestrator. In a multi-vendor environment where different network elements may be supplied by different providers; an orchestration platform that has the ability to unify multiple vendor offerings is of great importance in taking strides towards enabling the SDN & NFV vision.

Ovum Research principal analyst Dimitris Mavrakis agrees that management and orchestration is a key hurdle in the race to realize the potential of virtualization.

“If you have a multi-vendor network, which is very common today, each vendor is likely to have their own OSS system,” he says. “In order for SDN and NFV to be able to realize the considerable cost savings, the OSS system also needs to be renovated; and that’s a major challenge.”

But how can carriers overcome such a challenge?

So far, over the top (OTT) companies, such as eBay, Facebook and Google, have taken an open-source approach to network control and management.

eBay for example have brought in a dedicated team of trained open-source software engineers to develop their management platforms in-house. By using OpenStack as a controller, they are able to operate their network with complete customisation and flexibility on Linux-based servers; which reportedly sees them benefit from greater accessibility, reliability and availability. They work with a large vendor partner to deliver OpenStack-specific plugins for SDN orchestration; and are closely monitoring the OpenDaylight Project, which has huge potential in shaping the future of the virtual carrier network.

The challenge that many operators may face, however, is one of human resource allocation. Carriers may argue that the fundamental business model of OTT service providers affords them greater flexibility than their subscription-based carrier counterparts. An end-user may tolerate a temporary degradation in quality of a free service they receive from an eBay or a Google; but compromising on Quality of Service for paid-for carrier services is quite simply not an option. Naturally, the carrier community is cautious of this, and subsequently takes a steady & incremental approach to network innovation.

At this early stage in carrier adoption of both SDN and NFV, there are a number of logistical, business and networking challenges which the telecoms industry faces. Industry specification groups and standardization bodies are working well, and working quickly, to innovate their way towards the Elysium of a perfectly virtualized network infrastructure. If the industry’s most influential parties continue to throw their hat into the ring, then the reality will be delivered sooner, rather than later.