We all see people differently, sometimes because of our own biases and sometimes because people put on a different face for different situations in their lives. Apparently this is true of technologies too, because what NFV looks like and where it's heading looks different to each of the major NFV constituencies, and how NFV's "faces" might be harmonized could be critical to its real success.
Facing the facts
Face One is the NFV Happy Face. Network operators like Telefonica, Masergy, and China Mobile have touted their evolution toward network functions virtualization (NFV) and offered real examples of deployment. Surveys published here on The New IP have shown high rates of anticipated adoption for 2016. From that perspective, NFV is a success.
Ah, but then there’s Face Two, the sourpuss face. CFOs at network operators worldwide have told me for six months that they can't validate a large-scale business case for NFV. NFV salespeople at accounts all over the world have said that NFV is a much harder and slower sell than they'd expected. From that perspective, NFV is a failure.
The face that may count the most is Face Three, the face of Wall Street. Financial analysts and hedge fund managers don't believe that network infrastructure or technology transformation is the path to success. Their primary measure of operator financial health is the arcane measure called "EBITDA," which stands for earnings before interest, taxes, depreciation, and amortization. The biggest drag on EBITDA is opex, not operations expenses as in network ops as we'd understand it, but as operating expenses or the whole administrative process of doing business. NFV could be a success, if it addresses EBITDA.
Masking the reality
There's a single real face behind all this, of course. What the Wall Street Face says is the same as what NFV ISG has already accepted -- that capex reduction won't make an NFV business case by itself. Capex isn't even part of EBITDA. The necessary ingredients for the business case, says the CFO Face, is a major reduction in operating expenses and a big bump in new service revenues arising from service agility.
The Happy NFV Face shows that where operators have special situations, created either by a focus on a specific service or customer set, they can make the business case for NFV. The problem that NFV sales types have confronted is that these special situations are just that -- special.
We need a broad solution, and to get one we need to solve that service operations problem for all the services. The current practice of proof of concepts and trials that focus on a single service all create a business-case problem for the CFO. They can't demonstrate or justify the breadth of operations changes needed to really alter EBITDA.
I think some vendors have figured this out. Huawei bought an OSS/BSS company (Fastwire) last year. Oracle, this year, has been touting a very OSS/BSS-centric vision of NFV evolution. The NFV ISG is also taking operations integration more seriously; it no longer seems "out of scope" as it was deemed to be when the ISG was launched. We may now be in a race to define a couple of new NFV faces -- the OSS/BSS Face and the MANO Face.
Meeting new faces
The OSS/BSS Face says, "If you want to change service operations and management, you change what controls them today -- the OSS/BSS." This new Face says it has a TM Forum-sanctioned solution to unified service management information bases (MIB) to operations process mapping to events. All it needs to support a new vision of OSS/BSS is a mechanism to "bind" virtual resources to services. Look to the NFV future through the eyes of the operators' CIOs, it says.
But the MANO Face says, "Ha! What's needed to change service operations is to tie it to a new orchestration model that was invented right here, for NFV." MANO, at least if it's based on modern intent-modeling principles, can implement the TM Forum-defined mechanism to link events to processes, something that's not been done widely with the TM Forum definitions so far. "You should make OSS/BSS event-driven by organizing operations through MANO," says the MANO Face.
It's really hard to say which of these two new NFV faces has the best shot of defining the future. NFV activities so far have failed to engage the operators' CIOs successfully, and it's the CIO who controls service operations and will have to run whatever emerges to make it more efficient and agile. The CIO's own standards activities, generally housed in the TM Forum, have moved slowly to address the specific needs of orchestration for virtual resources.
What's even more interesting is that the answer to who or what drives NFV service operations may not depend on NFV at all. Service agility and operations efficiency have to cover services on a large scale and end-to-end. There is no way of doing that without covering legacy infrastructure, which means that the first test of successful NFV service operations may be in applications where there's no NFV yet.
We may have different NFV faces, but they're all facing the same direction. We need massive operations changes to change EBITDA and carrier profits. We can't get that by attacking little enclaves of virtualization opportunity, we have to spread a new automation net over everything that builds a service -- including but not limited to NFV. Who's up to that mission? We'll likely see by the end of the year.
— Tom Nolle, President/Founder/Principal Analyst, CIMI Corp., special to The New IP