Market research, financial analysis and consulting on wireless technologies and services
Lowering the TCO with NFV and SDN. Cost benefits from virtualizing the mobile core
White paper prepared for Radware

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Much progress has been made since the publication, in 2012, of the ETSI white paper presenting the vision for Network Functions Virtualization (NFV). The initial reaction to the proposed transition to a fully virtualized core and radio access network (RAN) with NFV and software-defined networking (SDN) was mixed. Virtualization promises cost savings, a more agile and flexible network infrastructure, and a faster rollout of new services. But it  can also disrupt the way mobile operators run their networks, and many operators felt uncomfortable with the risk and uncertainty NFV and SDN bring. Similarly, many were skeptical about the short-term viability of SDN, which complements NFV on the path to virtualization.
Fast forward to today, NFV and SDN have become nearly universally accepted, with operators moving beyond the proof-of-concept (POC) stage to commercial rollouts. Operators see the transition to virtualized networks as necessary, but also complex. They are moving at different paces, following different paths and strategies. 

The initial trials and rollouts have given us a better understanding of the challenges and benefits of moving to a virtualized mobile infrastructure. As solutions have become available, and operators have started or are planning to deploy them, we also have better
 insight into the cost savings possible with NFV and SDN.  

The reasons to adopt NFV and SDN clearly go well beyond the short- to mid-term financial benefits. Virtualization is a game changer, and many of its advantages – in terms of functionality, agility, and performance, as well as cost – are fully accrued only in the long term, after an initial, possibly challenging, learning period. 

Yet it is financial benefits within the initial years that help mobile operators justify investing in the transition to virtualized networks. In this paper, we look at the TCO advantages of virtualization within an eight-year framework of a specific core network element – the application delivery controller (ADC) – by comparing the capex and opex in a legacy infrastructure versus a virtualized one, plus the additional revenues a virtualized environment can generate.

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See also Radware blog "Eliminate the service roll-out bottleneck with NFV" by Louis Scialabba

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