The three benefits and triggers for VoLTE
Many benefits can be expected when virtualizing your network, so why is the pace of transformation so slow? Using the VoLTE service as an example, we look at immediate business opportunities and ways to implement this in your organization.
Are the three main benefits and triggers correlated? Yes and no.
Let's start with the benefits. These benefits alone would justify virtualizing your services, but is that really happening?
Look at the slide below, which is from an IHS market survey in 2017. The respondents were 33 large service providers and as you can see from the picture, 85% predicted that they would have NFV deployed in 2018. Well, we're approaching the end of 2018 and we are not there, by far. The question is why?
If we look at the benefits that have been viewed as cost-reduction benefits earlier, I like to group them into three different categories:
- Hardware independency
If we map these three categories onto the Heavy Reading survey, "Anticipated benefits driving the consideration of NFV/SDN," we end up with the following figure:
As can be seen, the benefits are significant, to say the least. And still, you have to ask why the pace of deployment is lower than predicted. The obvious answer is that many times the gap between predictions and reality can be quite big. However, we have seen many examples of virtualization that actually claim figures that are far better than the predicted ones—in some cases reducing the time by more than 95%. That means freeing up resources, launching new services quicker, and so on.
Why is the transformation pace so slow?
I think, when we look at the triggers, here is part of the answer. The triggers we have seen in the market so far relate to either market positioning or the OPEX situation.
Looking at the above two columns, we see one side of the coin holds the answer as to why the pace of virtualization is still slow. When talking about cost-reduction measures (read OPEX reduction), the time to make a decision is usually quite lengthy since this often involves company restructuring. Lengthy decisions end easily in compromises and the full benefit might not be achieved.
However, market positioning is related to an immediate opportunity or threat. A very good example of the former is the tsunami of wearables and IoT that we see now. Wearables have given many operators an ARPU increase of some 5% to 10%. Now, that is a business case that does not involve lengthy decisions; you get the focus of the whole organization and the rest is just technology. The other side of the coin relates to when competitors have launched new offerings or the regulator is demanding certain technologies be used (in order to increase the competitiveness of the country). Market positioning is clearly the stronger trigger today.
But, is that enough? Virtualization also means a company transformation. Let's start with the technical part. We see there are three different starting points based on the assets and strategy of the service provider:
- Existing datacenter
- No commerical datacenter
- Targeted launch
Watch this 6 minute video discussion about what to consider when deploying Cloud VoLTE:
Service providers that already have a datacenter for telco workloads deployed have in many cases adopted the strategy to build their network with the best available components. This often resulted in long projects, resource consuming systems integration and, ultimately, several changes of scope. In other words, the benefits have not materialized yet.
The other alternative that we see being more common today is service providers that want to quickly launch VoLTE for some specific reason (read market positioning, for example, the launch of a VoTLE smartwatch) and do not have a commercial datacenter in operation. Since there are few project dependencies and few organizations involved at the same time because the business opportunity is clear, we have seen that the deployment of cloud VoLTE can be done the first call can be made in only 11 days. Now we are getting closer to the Internet paradigm.
The last of the bullets above, targeted launch, relates to when a service provider needs to upgrade mobile broadband and user data management as a prerequisite to launching VoLTE. If you make this one project, creating a dedicated virtualized network, the systems integration activities as well as the acceptance and the handover to production will be significantly reduced. The same applies for a service launch targeted for a specific consumer or enterprise segment. By making this a single project, most interdependencies and double integration efforts are removed, generating significant cost savings due to shorter project times. In addition a time to market for new revenue-generating services of three months can be achieved.
So, saving costs and driving revenues: the way to go.
Don't wait for the perfect cloud; get productive quickly for your business instead. Given the new business opportunities, gain experience and reconsider the way you have been doing things up to now.
And finally: start small and start now.
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