Accelerate Revenue Growth, Address Dynamic Market Needs
Today’s tech-savvy consumers are tuned to real-time digital experience facilitated by highly-personalised OTT services. This change in consumer behaviour has steadily influenced new technologies — Internet of Things (IoT), Big Data, 5G, AI and machine learning, among others — leading to a series of digital transformation impacting almost all the sectors. This transformation is forcing the Communications Service Providers (CSPs) to redefine their network to address the changing consumer preference. When new age consumers are moving at the speed of digital transformation, agility and flexibility in time-to-market personalised digital services are vital for the success of CSPs.
It’s Time for Network Transformation
The legacy networks of CSPs are both complex and inflexible posing challenges such as specific gateways, distributed control functions, and require individual settings for each device. It is time for CSPs to redefine their approaches to offer virtual network services and cloud applications. The business, sales and marketing operations within CSPs, responsible for boosting the revenue growth, are affected by the slow pace of network and IT transformation that holds them back from quickly offering a new and diverse set of connectivity and value-added services. CSPs need to be prepared to offer virtual services and cloud-based enterprise applications much more quickly, with flexible commercial and operational models.
Why SDN & NFV are Important
Software Defined Network (SDN) and Network Function Virtualisation (NFV) promise a new era in networking by enabling the efficient use of resources, rapid provision of services and improved resilience. SDN and NFV equip CSPs with virtualised gateways, centralised control and general purpose hardware with automated settings, allowing low latency, high scalability and increased agility. In addition to addressing the hyper-scale capacity requirements of mobile traffic, SDN and NFV play a crucial role in reducing CSPs’ CapEx and OpEx burden associated with expensive proprietary hardware platforms.
Gear Up for the Software Defined Future
With the Return on Invested Capital (RoIC) of CSPs declining globally, CSPs should start taking advantage of the new capabilities being delivered by software-defined networking architectures. More than 50% of CSPs have already started investing in SDN and NFV initiatives. However, the level of adoption varies significantly, with the majority taking a highly tactical approach, risking the modernisation agenda for operational efficiency. (Source: Gartner) In the next two years, the SDN and NFV markets are projected to grow at a CAGR of about 45 percent. Annual investments are expected to reach about $22 billion (€18.26 billion) by the end of 2020. (Source: SNS Research) Considering the pace at which SDN and NFV technology development is transforming the process and business models, the unprepared CSP networks will lag behind three years. To be more effective, this impact should be benchmarked with the current strategy to prepare CSPs for a data-driven future. (Source: Gartner)