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Network Virtualization Set to Revolutionize the Telecommunications Industry as the Shift to the 3rd Platform Continues, According to New IDC Research

As technologies and business dynamics continue to evolve, network virtualization strategies are reshaping the telecommunications ecosystem. The shift to the 3rd Platform, built on cloud, mobile, social, and big data and analytics technologies, is driving communication service providers (CSPs) and their suppliers to accelerate their efficiencies and agility. IT industry approaches and technologies such as virtualization, balanced with telecom industry business considerations are coming to the forefront of telecom industry dynamics. According to new research from International Data Corporation (IDC), network virtualization is set to revolutionize the telecom industry as it transforms the culture and operational infrastructure, as well as the fabric of legacy proprietary infrastructures that have, until now, dominated the space.

Communication service providers and their suppliers are embracing the promise and opportunities related to network virtualization approaches, such as software-defined networks (SDNs) and network functions virtualization (NFV). "Despite budget concerns and questions about the ability to execute on the network virtualization vision, CSPs, telecom vendors, and partners are all embracing potential opportunities," said Elisabeth Rainge, Research Vice President, Communications Service Provider Operations. "Network virtualization for telecom represents some significant challenges, but the upside is extremely high. And, while not everyone will reap the benefits of this profound sea change (e.g., entrenched telecom equipment manufacturers), IDC sees an evolution of infrastructure that is already underway."

During the first half of 2014, a series of CSP and supplier announcements were made that provide concrete evidence of the maturity of CSP network virtualization. Because ongoing discussions emphasize the long-term visions for network functions virtualization, software-defined network, cloud, related IT technologies, and larger concepts of network virtualization, a clear picture of the status of CSP activities and potential activities can be challenging to discern. IDC's research in network virtualization will continue to examine and analyze progress towards network virtualization throughout the IT and communications ecosystem.

"Vendors will resort to network function virtualization and software-defined network architecture to catalyze use cases such as the voice over LTE (VoLTE) network evolution. However, with the talk of moving away from a 5-9s model in the name of service agility and flexibility, it remains to be seen whether and how NFV and SDN can ensure faster deployment while maintaining high standards of quality of experience (QoE)," said Sathya Atreyam, Research Manager, Wireless Network Infrastructure.

"Many existing CSP network elements, such as service provider routers, Ethernet switches, and packet optical switches, will transition over the next few years to become software-enabled and programmable with open, northbound interfaces," said Nav Chander, Research Manager, Wireline Network Infrastructure. "Many networking vendors are already delivering their first generation NFV-based Virtual CPE solutions, and a number of leading CSPs will begin to launch commercial virtualized telecom services beginning in late 2014."

Two new IDC reports, The Network Virtualization Evolution in Telecom (IDC #248827) and Status of CSP Network Virtualization, 1H14 (IDC #249293), identify some of the fundamental changes and progress that telecom network virtualization is and will bring to technology architectures, organizational structures, vendor relationships, and services consumed by communications service providers. The Network Virtualization Evolution in Telecom sets the scene for a number of future reports on different aspects of network virtualization that IDC will publish in 2014 and 2015.

To purchase the studies, please contact IDC Sales at 508-988-7988 or [email protected].

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. In 2014, IDC celebrates its 50th anniversary of providing strategic insights to help clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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