Customer adoption of NFV and SDN

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this post, Junji Yamashita, Product Director, NTT America spoke to a representative from the Network Virtualization North America event, which takes place in Dallas on 5 October about customer acceptance of both SDN and NFV technologies

Although the development and deployment of both Software Defined Networking and Network Function Virtualization technologies has to be driven by the Telcos themselves, the success almost entirely relies on the attitude and acceptance of the Customer. If the Customer is not prepared to undertake virtualized products and services, investment in the technology becomes redundant very quickly.

“There is quite a clear definition between two types of customers” commented Junji Yamashita, Product Director for NTT Com’s US division, NTT America “you have early adopters and those who would be considered more conservative. Dependent on the business model and the technology-emphasis within the sector itself, the reception of SDN and NFV orientated products can be quite varied.”

As with any new technologies there is an adoption curve. In the most generalized (and stereotypical) of senses, the more traditional sectors could be classed as conservative and the more technology savvy would be considered early adopters. Think Finance, Manufacturing and Public Sector; would you usually associate these with an “Early Adopter” tag? Probably not.

“It’s very much a case by case basis – there are no rules for sectors which would be considered conservative or early adopters,” Junji highlighted. “You have to understand what the needs of the Customer are, and assess whether your current product offering is relevant to them. Sometimes the features we have drawn out of SDN and NFV is not right for some customers. That’s why we’ve built our services with SDN in the foundation.”

The adoption curve is a slow one and would resemble a bell curve as with any other technology. But when will we see the breaking point? What is the defining reason that SDN and NFV is not widely accepted currently.

Customer and Technology Awareness

One of the big questions we need to address in terms of adoption is how well known is the technology? Everyone in the Telco industry must surely be aware of this mini-technology-revolution, however what about those in Enterprise?

“There are two reasons for some customers being slightly reluctant,” added Junji. “Firstly, they are not fully aware of the technology and the benefits that it will offer, and secondly, the Telcos are not fully aware of the technology and the benefits that we will offer.”

Whilst there are some highly innovative and entrepreneurial organizations like NTT Com who have undertaken both SDN and NFV from the inception, these are the minority. NTT understands the benefits because it has worked with the technology for well over a decade; other Telcos are still in the learning stages.

In some cases, the validity of both SDN and NFV has been undermined, because those Telcos cannot communicate the benefits to the Customer clearly. (A recent conversation with a contact at T-Mobile USA, highlighted that they are sitting back and waiting for the technology to be perfected until they will invest – a slightly more negative approach compared to NTT Com).

“We at NTT Com understand SDN and NFV, though we are still learning,” commented Junji. “To ensure that the technology is fully appreciated by the Customer, we have to ensure that our marketing messaging is sound, and we are communicated the benefits in a manner in which all our Customers can understand (both the Tech Savvy and the Conservative).”

Whilst NTT Com has been immensely proactive in moving the technology forward (to which the rest of the Telco industry has undoubtedly benefited), the fact that they are a minority has ensured that SDN & NFV are still seen as break-through technologies. Until we can get to a point where the technology is fully embraced by the entire industry there will always be an element of doubt from the Conservative Customer.

“The more we talk about and invest in SDN & NFV the more column inches it will get” Junji added “add this to the Telcos improving its messaging to the Customer, and we will start to see much more excitement from Enterprise. Momentum is starting to gather and it won’t be too long until all our Customers are considering the technology”

A Double-edged Sword

The investment and attention in both SDN & NFV has been more than justified, but can there be negative impacts to moving the technology forward

“You have to be careful about what services you offer to a specific Customer” Junji highlighted. “Some simply aren’t ready for Next Generation Networking, and may choose a provider which is promoting a more traditional service.”

In short, more Conservative Customers, who are waiting for the technology to be 100% proven, can look negatively on services which are focused on the Next Generation Technologies. There is a fine line to tread, but there opportunities to be made.

“The more customers who we identify to take on the new technology, the more attention the technology will get in the press” Junji mentioned “It is very much a case of building awareness and effectively communicating what can be achieved through the technology itself.”

That said, a negative approach to technology inclusion can leave the Telco industry playing catch-up.

For every month which passes where SDN & NFV has not been launched live onto the market, the industry is falling further behind, and limited themselves to the more basic layers in the IT stack. This is another example how NTT Com is moving up the IT stack into end-to-end IT infrastructure and application operations. Without SDN or NFV, how can the industry move beyond layers 1, 2 and 3, and enter into the “Value Added Services” market.

SDN & NFV will be taken on by the industry, it’s just a question of when and by who” Junji highlighted. “Without SDN & NFV, the Telco industry will be limited to the more basic and traditional services – the answer to the flattening revenue curves will almost certainly be entering the 4th and 5th layers, where bolt on services can be applied to the customer.”

“Whether these services are offered by the Telco, or a managed service contractor or an innovator from Silicon Valley is largely irrelevant, however, if the industry gets too caught up and doesn’t progress, we will be restricted to the first three layers.”

Once the tone has been set it will be difficult to reverse – taking the proactive and innovative position that NTT has championed will ensure that they are in a prominent position once the technology has the awareness and acceptance which is only just around the corner.

“For example, currently we have two business units – a more traditional Service Provider which offers the IT stack, and a Public & Private Cloud organization” Junji said. “SDN & NFV is the innovation which enables the two business units to act more collaboratively, and ensure the customer is receiving the more efficient, cost effective and advanced service.”

Junji will also be at the forum to give you a tour of NTT Com’s next generation products, so you can understand how the team are incorporating SDN & NFV features, but also ensuring marketing messages are localized to the North American Customers.

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