Network Functions Virtualization (NFV) is often touted as a means to cut costs. Both capital (CAPEX) and operational (OPEX) reductions are possible with the deployment of centrally controlled virtual functions running on standard server platforms. While reducing spending is always desirable, service providers have to consider the other side of the balance sheet: income. In addition, traditional service providers are losing ground to the more agile cloud providers, so there is a need to deliver innovation in the service portfolio by quickly bringing services to market, and to revenue. Simply changing from a physical to a virtual environment can’t provide service innovation and new revenue, so what else is needed? Service agility enabled by NFV orchestration coupled with actionable intelligence is the key to boosting revenues.

Cost Cutting is Not Enough
I have previously written about how service providers have done a decent job of cutting costs without using NFV. I cited a statistic that between 2008 and 2013 “the industry’s gross receipts increased nearly 15 percent, while cumulative payroll decreased 2.25 percent.” Much of this gain came from consolidation of networks: “Eliminating the prior need to develop and maintain independent networks is allowing the telecommunications industry to operate with lower overhead and higher margins.” However, today’s networks are highly consolidated, and there aren’t many reductions waiting to be realized.

Even with this increase in efficiency and reduction in spending, service providers are still getting squeezed. Bandwidth demands are growing, and revenues are flat to declining. Further incremental gains in cost efficiency will be necessary, but are not going to be sufficient. Simply converting current services to a virtualized implementation will help with the attack on costs, but it likely will not be enough to boost profitability. Something more is needed – new revenue gleaned from service innovation.

Show Me the Money
The need to drive new revenue is no secret. All too often, however, we focus on new services rather than changes that may be brought about to existing services. In a previous blog I cited examples of industry leaders and analysts describing the need for net new services, or improvements to existing services that bring value from one or more of the following attributes:

• They are dynamic, offering faster time to service, ideally under user-control.
• They are scalable, supporting usage-based or transient models.
• They are built using modern development tools, reducing the time needed to develop and deploy.
• They are constructed from service primitives, enabling the mashup of previously disparate functions or resources e.g. dynamic private cloud or dynamic private network.
• They have modern and open APIs, facilitating machine-to-machine integrations.

Virtualization of a service allows us to adapt and change both the service delivery and also the charging models. So, how do we enable construction and deployment of such service innovation built from NFV components? The key is NFV orchestration.

What Orchestration Means for NFV
The ETSI NFV ISG has defined orchestration in its “Management and Orchestration” (MANO) specification. I won’t go into all of the details here, but you should note that the MANO specification provides a lot of good material on how NFV orchestration should operate.

Other essential aspects of orchestration go beyond the MANO specification. As described here, these attributes include:

• Actionable intelligence based on collection, analysis and correlation of big data from service, virtual and physical layers as well as IT, Cloud and network systems.
• Spanning of the physical and virtual, using standard NFVI and Multi-vendor control.
• Open platform with support from a strong group of vendors.
• Carrier class system built for deployability.
• Lifecycle management of services, including onboarding of virtual network functions and assignment, management, scaling and reclamation of virtual resources.

The above attributes enable an orchestration system to facilitate the construction and deployment of service innovation that providers and their customers want and need. In short, a proper NFV orchestration system is the glue that cements the vision of NFV into reality.

NFV Orchestration: The Enabler of Service Innovation
Without orchestration, NFV is interesting but not compelling. It is not complete.

With a carrier-class orchestration system, service providers are empowered to provide the service innovation that they need, and that customers want. Services can be enabled in minutes not months; they can be dynamically changed according to network conditions; they can be enabled for a short period of time, and charged accordingly; and new services can be introduced far more quickly at far less cost than previously possible. Those are the keys to driving new revenue and increasing profitability.