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NFV Is Down but Not Out

Iain Morris

In an industry too often guilty of hype and hyperbole, Ibraham Gedeon's bluntness is refreshing. "Our vision is to be able to move these network functions around and make them software-based, and not just take all of that shit and put it on commercial hardware and call it done," says the chief technology officer of Telus, one of Canada's "big three" operators, in fulminating about network functions virtualization (NFV), one of the most hyped telecom technologies of the past decade.

Dreamt up as a concept way back in 2013, NFV is supposed to do exactly what the label says, bringing the virtualization that has already swept through IT into the world of network routers and switches. Essentially, it should mean breaking up the cozy marriage of hardware and software in proprietary network equipment. Software would then take charge of the network. A network function would be a software program you could run over any bit of commodity gear. Costs would fall dramatically. Operators would be able to spin up services with the stroke of a key.

Can NFV get back on its feet?
Can NFV get back on its feet?

But five years after it was first conceived, a successful divorce of hardware from software has still not happened. Instead, the industry is in the throes of a painful separation that has dragged in all of the family members. Operators still complain they cannot use software from one vendor with equipment from another. Vendors, they add, have ratcheted up software charges to offset hardware losses. Along with the added complexity of NFV, that has eroded cost savings. If NFV is to deliver the benefits it originally promised, operators and vendors will have to reevaluate their entire relationship. (See Virtualization Is Kicking Juniper in the Berries and Cisco Bows to Carrier Demand for Software Outside the Box.)

Gedeon has several gripes about NFV in its current shape. The most obvious is that Telus Corp. (NYSE: TU; Toronto: T) has not been able to realize cost saving targets because of the software fees that vendors charge. "We've dropped the price of hardware to a seventh," he told Light Reading at the Digital Transformation World event in Nice last week. "But if you are adding to the price of software licenses you are not where you need to be." (See Telus CTO: NFV Burden May Cripple Telcos.)

Sitting in Judgment
Ibrahim Gedeon, the chief technology officer of Canada's Telus, has harsh words for NFV vendors.
Ibrahim Gedeon, the chief technology officer of Canada's Telus, has harsh words for NFV vendors.

The cost problem is not just one of licensing fees, however. With NFV have come additional suppliers demanding their pound of operator flesh. "I pay people like Red Hat all of a sudden for OpenStack," grumbles Gedeon, referring to the open source infrastructure platform and one of its chief supporters. Many suppliers also have no "empathy," he says, and are busier trotting out new buzzwords and phrases ("orchestrator of orchestrators" and "artificial intelligence" are two he cites) than tackling basic operator problems. The ability, for example, to spin up a local evolved packet core is still not there, he says.

Far from bringing any kind of automation, NFV seems to have lumbered Telus with additional complexity and operations staff. While overall headcount at Telus rose from 51,300 in 2016 to 53,600 last year, Gedeon attributes the increase to non-telco expansion and says the workforce at the core telecom business has not grown. Ideally, though, he would like to have fewer technology teams. "We've realized a third of the savings. We need to get to a factor of ten," he says. Supplier offerings, it seems, are not helping Telus to realize this target. "Vendors have given us stuff that keeps job security for my 14 teams. How do you make them one team?"

Next page: At an impasse

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11/19/2019 | 8:36:43 AM
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9/25/2018 | 4:46:07 AM
So does Gedeon from TELUS expects NFV to be FREE????
Some of these comments look stark in text in a news report, but it's hard to judge context and tone from here.
8/3/2018 | 1:23:03 PM
depends on what kind of technology team is
built inhouse. If that handles development and support of nfunctions then 10x possible. bUt building such a team is tough and xpensive for telco.
6/14/2018 | 1:47:25 AM
‘NFV is not down yet’: save it by doing it right
While obviously not all of NFV's promise has materialized, concluding that NFV has failed to deliver is far reaching. 
The values of NFV for service providers and enterprises can still be achieved when adopting the right product and right deployment strategy. D-NFV and uCPE solutions allow quick and efficient rollout of NFV managed services with minimal initial investment supporting an "invest as you grow" model.
Special importance should be given to choosing the right uCPE solution. The common tendency to select a solution, using the same criteria employed while selecting centralized NFV, or "jumping on the easy choice" of your current appliance/network-equipment vendor, might not yield the required results.
6/5/2018 | 11:39:01 AM
Re: We've realized a third of the savings. We need to get to a factor of ten


I think that you are missing the notion a bit.  He is talking about 30% savings over doing the service without NFV.  For a telco, that is a bare minimum for adopting a new vendor.

The big problem will be on the OPEX side, whereas it is pointed out more people are required during the transition.  This transition is the 100% elimination of the old network.  Until then, two staff positions are required. So, even if there are CAPEX savings there is an extreme downside on the OPEX side.

For your example, it would be the adoption of IP PBXes and SIP Trunking.  Not only did one reduce the capital requirements, but you could fire the guy who knows about T-1.  That was a 100% reduction in T-1 guy Opex.


6/4/2018 | 5:03:27 PM
We've realized a third of the savings. We need to get to a factor of ten
>>We've realized a third of the savings. We need to get to a factor of ten.

Does anyone on this board can share any example where a company was able to realize savings by a factor of ten in ANY business??? If the CTO of TELUS is expecting savings by a factor of ten by moving to NFV, then I feel there is a very basic issue here in the way his understanding is about what is needed to implement NFV OR my undesrtanding is incorrect 100%.

Even a household will not be able to achieve savings by a factor of ten unless folks in the family just drink water for food and eat only salad and that too homegrown most of the time.

How in the world someone and that too a CTO of a company is expecting savings by a factor or ten is beyond my imagination. He is getting 30% savings alreday and that is a huge number by itself. Does Telus or any company offer a phone plan that costs 1/10th or even 1/5th of the going rate just because the network is more NFV focussed?

Please share your thoughts. I just don't seem to come to terms that someone could expect to run an existing business with 90% discount in cost of running the business.

I would like to hear of definite examples if there are any.



Joe Stanganelli
Joe Stanganelli
5/29/2018 | 11:36:42 PM
Re: "I pay people like Red Hat all of a sudden for OpenStack,"
@yarn: TCO isn't everything, even if it should be more emphasized. Investors in public companies want to see increased profits quarter over quarter -- not increased expenditures. And the executives and lower-level employees making purchasing recommendations and decisions may not expect to be employed at the same company by the time cost savings is realized.
Joe Stanganelli
Joe Stanganelli
5/29/2018 | 11:30:46 PM
Re: So does Gedeon from TELUS expects NFV to be FREE????
Even executives can fall for marketing -- and the open-source community's long-time messaging has been "It's free!" The unspoken part of that: "As long as you don't want support lol."
Joe Stanganelli
Joe Stanganelli
5/29/2018 | 11:28:36 PM
Local EPCs
Yeah, vEPC really fizzled out from all the hype a couple of years ago, huh?

Of course, we can't say we weren't warned for all that hype for those willing and able to read between the lines.  As Gabriel noted in a 2016 Heavy Reading report, revenue from vEPC had a 70-30 split between software licenses and hardware investment -- in favor of software.
5/25/2018 | 9:48:06 AM
Re: So does Gedeon from TELUS expects NFV to be FREE????
A follow-up story to clarify some of the points made in the original post would be a good idea. At least it would give Mr. Gedeon the opportunity to clarify his reported comments, which do come off as something short of clued-in.
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