TM Forum Community

Many people have talked about cost savings with NFV, do people really expect NFV to save then OPEX, CAPEX neither or both?

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Mart Panichvatana
AT&T Inc.
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I usually take NFV, SDN, virtualization, cloud together and call - softwarization. Initially, the thought was to bring down the cost (CAPEX, OPEX, TCO), but lately the other capabilities softwrization brings in - agility, flexibility, dynamism - showed that, more than cost reduction, it allows bringing in new and innovative services quicker to increase TTM and boost revenue (if not tap the untapped revenue areas). All these things, in more practical terms boils down to automation. For automation, you need virtualization. Therefore; Virtualization - Automation ->DevOps will actually help the CSPs to become DSPs (or DLPs), providing Digital Lifestyle Services. In terms of automation, yes, it can bring down your OPEX. CAPEX may not be reduced initially, but TCO will be in the long run.

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Anuradha Udunuwara
Sri Lanka Telecom PLC
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Great answer Anuradha. Feedback from customers has been that <50% savings are possible in both Capex and Opex, with Opex being the more significant over time. Also, to your point, it is the ability to automate and operate more agile services at scale that delivers the 'upside' by of bringing new services to market faster and the ability to differentiate those services - mass customisation. Cost saving alone are not enough - increasing service value and reacting rapidly to market opportunities is what will drive success longer term.

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Nigel Stephenson
VMware, Inc.
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Original Message:
Sent: 03-16-2017 00:27
From: Anuradha Udunuwara
Subject: NFV saving costs

I usually take NFV, SDN, virtualization, cloud together and call - softwarization. Initially, the thought was to bring down the cost (CAPEX, OPEX, TCO), but lately the other capabilities softwrization brings in - agility, flexibility, dynamism - showed that, more than cost reduction, it allows bringing in new and innovative services quicker to increase TTM and boost revenue (if not tap the untapped revenue areas). All these things, in more practical terms boils down to automation. For automation, you need virtualization. Therefore; Virtualization - Automation ->DevOps will actually help the CSPs to become DSPs (or DLPs), providing Digital Lifestyle Services. In terms of automation, yes, it can bring down your OPEX. CAPEX may not be reduced initially, but TCO will be in the long run.

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Anuradha Udunuwara
Sri Lanka Telecom PLC
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Oops, should have said >50% above!

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Nigel Stephenson
VMware, Inc.
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Original Message:
Sent: 04-11-2017 05:47
From: Nigel Stephenson
Subject: NFV saving costs

Great answer Anuradha. Feedback from customers has been that <50% savings are possible in both Capex and Opex, with Opex being the more significant over time. Also, to your point, it is the ability to automate and operate more agile services at scale that delivers the 'upside' by of bringing new services to market faster and the ability to differentiate those services - mass customisation. Cost saving alone are not enough - increasing service value and reacting rapidly to market opportunities is what will drive success longer term.

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Nigel Stephenson
VMware, Inc.
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Hi, from state of the art perspective cost saving is confirmed with different figures, we have to pay attention that the challenge is to define and calculate the saving from the end  to end perspective not only to virtualization benefits or limit it to IT domain, it is necessary to take into consideration the transformation cost, below some strategic  important decision which will drive the TCO from.operator perspective : 1. do we go for an infrasttructure  convergence model or not for (IT, Telco, public cloud) domains ? 2. How can we FULLY  automate the service and control the network ? 3. Among the additional building blocks Which product we have to choose and which vendor ? 4.How about the interoperability cost and integration efforts covering VNF layers  (VNFM,VNFO,VNFI,..)? 5. Which technology we have to invest Opensourece or not, what is the licensing model ? 6. What is the new support model we have to pay for it and which SLA we avhehave to define where my NF is running in DC and the responsibility is shared between virtualization, hardware,VNF supliers ? 7.are the team  ready for NFV journey or we have to plan a training to reduce skills GAP, .... 8. Do we have the right process or it is necessary to redefine  ? 9.Do we have the right dashboard or we have to create again ?...... In fact it is a complete journey when moving to NFV and when adding new complexity to the network with NFV/SDN and we cannot automate we will pay extra cost for service integration including all layers , in addition if the architecture is not standardized we may end up with CLOUD in Silo and in this case we pay more for licenses infrastructure , services and it will be impossible to reach NFV/SDN announced goals to reduce cost and adding agility. Everything is driven by TCO and without a clear vision from operator side the cost saving is not guarantee and we will discover later that the target is not achieved. BUT with a clear roadmap regarding service consolidation including IT,TELCO AND PUBLIC CLOUD the cost saving is absolutely guarantee (> 30% and can reach even more..)

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Wadii BELLAAJ
Telco cloud specialist
NFV/SDN/Cloud architect
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Dear Wadii, the problem we are facing in addressing '''How can we FULLY  automate the service and control the network ?'' is the employees that dislike sharing knowledge. The mindset to drastically change. Not having (and not willing) to adopt a process that adresses CAMPUS LAN incl. its Firewalls, NFV, private Data Centre, SD-WAN, IWAN, MS Azure and OpenStack for example. As you say its a complete journey that need to happen. Companies don't run networks like ERP systems run factories. As you list, engineers would like to stay in their SILO. Not interested in bringing their skills into a single system. As then tool has the FULL control over the hybrid network. 

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Wim Horseling
NetYCE
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Original Message:
Sent: 04-13-2017 02:53
From: Wadii BELLAAJ
Subject: NFV saving costs

Hi, from state of the art perspective cost saving is confirmed with different figures, we have to pay attention that the challenge is to define and calculate the saving from the end  to end perspective not only to virtualization benefits or limit it to IT domain, it is necessary to take into consideration the transformation cost, below some strategic  important decision which will drive the TCO from.operator perspective : 1. do we go for an infrasttructure  convergence model or not for (IT, Telco, public cloud) domains ? 2. How can we FULLY  automate the service and control the network ? 3. Among the additional building blocks Which product we have to choose and which vendor ? 4.How about the interoperability cost and integration efforts covering VNF layers  (VNFM,VNFO,VNFI,..)? 5. Which technology we have to invest Opensourece or not, what is the licensing model ? 6. What is the new support model we have to pay for it and which SLA we avhehave to define where my NF is running in DC and the responsibility is shared between virtualization, hardware,VNF supliers ? 7.are the team  ready for NFV journey or we have to plan a training to reduce skills GAP, .... 8. Do we have the right process or it is necessary to redefine  ? 9.Do we have the right dashboard or we have to create again ?...... In fact it is a complete journey when moving to NFV and when adding new complexity to the network with NFV/SDN and we cannot automate we will pay extra cost for service integration including all layers , in addition if the architecture is not standardized we may end up with CLOUD in Silo and in this case we pay more for licenses infrastructure , services and it will be impossible to reach NFV/SDN announced goals to reduce cost and adding agility. Everything is driven by TCO and without a clear vision from operator side the cost saving is not guarantee and we will discover later that the target is not achieved. BUT with a clear roadmap regarding service consolidation including IT,TELCO AND PUBLIC CLOUD the cost saving is absolutely guarantee (> 30% and can reach even more..)

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Wadii BELLAAJ
Telco cloud specialist
NFV/SDN/Cloud architect
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100% agree with the previous posters ..... SDN/NFV won't ever achieve it's potential time/cost savings unless an organisation transforms itself to agile / collaborative ways of working.  A trad CSP org structure simply won't work.

- c.


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Chris Bristow
Hutchison 3G UK
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Original Message:
Sent: 04-14-2017 02:54
From: Wim Horseling
Subject: NFV saving costs

Dear Wadii, the problem we are facing in addressing '''How can we FULLY  automate the service and control the network ?'' is the employees that dislike sharing knowledge. The mindset to drastically change. Not having (and not willing) to adopt a process that adresses CAMPUS LAN incl. its Firewalls, NFV, private Data Centre, SD-WAN, IWAN, MS Azure and OpenStack for example. As you say its a complete journey that need to happen. Companies don't run networks like ERP systems run factories. As you list, engineers would like to stay in their SILO. Not interested in bringing their skills into a single system. As then tool has the FULL control over the hybrid network. 

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Wim Horseling
NetYCE
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The impacts on organisation is why in the ZOOM project, in addition to other more technical topics we created  e-books on transformation

Operations Transformation for the  Digital Ecosystem

Virtualization Operational Readiness & Procurement

both available at https://www.tmforum.org/zoom/

and have been publishing materials as part of our Operations Center of the Future theme
IG1137 Agile Transformation Suite R16.5.0

If you are interest in these topics join the ZOOM project an under the Operations Center of the Future theme
we are working on:
IG1144  Operations center of the future
IG1148 Strategy Skills Talents
IG1151 DevOps Practical Guide


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Dave Milham
TM Forum Chief Architect
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Original Message:
Sent: 04-18-2017 07:26
From: Chris Bristow
Subject: NFV saving costs

100% agree with the previous posters ..... SDN/NFV won't ever achieve it's potential time/cost savings unless an organisation transforms itself to agile / collaborative ways of working.  A trad CSP org structure simply won't work.

- c.


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Chris Bristow
Hutchison 3G UK
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Original Message:
Sent: 04-14-2017 02:54
From: Wim Horseling
Subject: NFV saving costs

Dear Wadii, the problem we are facing in addressing '''How can we FULLY  automate the service and control the network ?'' is the employees that dislike sharing knowledge. The mindset to drastically change. Not having (and not willing) to adopt a process that adresses CAMPUS LAN incl. its Firewalls, NFV, private Data Centre, SD-WAN, IWAN, MS Azure and OpenStack for example. As you say its a complete journey that need to happen. Companies don't run networks like ERP systems run factories. As you list, engineers would like to stay in their SILO. Not interested in bringing their skills into a single system. As then tool has the FULL control over the hybrid network. 

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Wim Horseling
NetYCE
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