As the telecom industry drives open source for interoperability more operators benefit from NFV and SDN, but incumbent suppliers face significant disruption

HAMPTON, N.H. (April 12, 2018) — According to TBR’s 1Q18 NFV/SDN Telecom Market Landscape, open-source groups will spur NFV and SDN adoption by establishing industry standards that foster interoperability among a broader range of solution providers. Operators are also facilitating NFV and SDN adoption by targeting new hires with relevant skill sets, retraining existing employees and launching internal startups to quickly improve their resource pools. Cost savings is the primary driver for accelerated NFV and SDN adoption, but these benefits will be realized gradually.

“The ability to reduce capex will initially be the largest cost benefit realized by adopters of NFV and SDN as software-mediated technologies enable operators to significantly reduce spend on proprietary hardware,” said TBR Telecom Senior Analyst Michael Soper. “Reducing opex will be a longer process as most operators will maintain both legacy and virtualized environments until they are ready to migrate fully to virtualized infrastructure.”

As operators pursue cost reduction through NFV and SDN, incumbent vendors face numerus threats to their business models and disruption on multiple technology fronts. Industry trends are moving against the vendor community, with incumbent vendors, particularly hardware-centric vendors, poised to struggle the most. Operators globally are focused on significantly reducing the cost of network operations and capex, underscored by a desire to disaggregate the black box and commoditize the hardware layer. White-box-based universal customer premises equipment is the leading application of industry-standard hardware thus far, but operators are targeting additional domains, including the core and edge network.

The NFV/SDN Telecom Market Landscape includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities.