NFV goes mainstream: How cloud-native is contributing to growth

Telco Cloud

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The number of deployments of NFV and SDN continues to grow – but while some markets are moving on to the next phase, others are just getting going.

This report accompanies the latest update of the NFV Deployment Tracker (June 2020).  It provides an analysis of global tracker findings and covers deployments from 2011 until March 2020.

About the NFV Deployment Tracker

The NFV Deployment Tracker is a regularly-updated database of commercial deployments of Network Functions Virtualisation (NFV) and Software-Defined Networking (SDN) technologies by leading telcos worldwide. It builds on an extensive body of analysis by STL Partners over the past five years on NFV and SDN strategies, technology and market developments.

The Tracker is provided as an interactive Excel tool containing line-by-line analysis of nearly 700 individual deployments of NFV and SDN, which can be used to drill down on trends by company and region.

The NFV Deployment Tracker

Overview of STL Partners NFV Deployment Tracker

Source: STL Partners

Previous reports have focussed on trends in specific regions, in addition to global findings. These include:

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NFV/SDN continues to grow at different speeds in different regions

NFV deployments continue to grow…

In total, our database now contains information on 689 NFV and SDN deployments comprising 1,401 individual functional elements, i.e. an average of just over two components per deployment. As has been the case since we began collecting data, the number of deployments (as defined by STL Partners) continues to grow year on year; although the trend as illustrated below requires some explanation:

Deployment growth continues – despite an apparent slowdown

Source: STL Partners

Pending deployments are those regarding which there is uncertainty surrounding completion.  STL Partners expects some of these will be allocated to 2019 as it discovers that they were completed in that year. 2019 could yet emerge as a growth year, and if not, 2020 looks set to exceed the totals for 2018 and 2019.

…but the rate and drivers of growth vary by region

If we make a more meaningful comparison – between 2019 and the first three months of 2020 (including pending deployments), on the one hand, and 2018, on the other – we see that the number of deployments has continued to grow in each region, apart from North America, where the market is maturing and the pace of new deployment has subsided.

Regional deployment growth, with the exception of North America

Source: STL Partners

Overall, the Asia-Pacific region has accounted for the largest number of deployments across all years: 232 (33.7%) of the total – just ahead of Europe on 226 (32.8%). North America has generated 135 deployments (19.6%), followed by the Middle East with 57, Latin America on 30, and Africa with 15.

Table of contents

  • Executive Summary
  • About the NFV Deployment Tracker
    • Scope
    • Definitions
  • Introduction: NFV/SDN continues to grow – but at different speeds in different regions
    • NFV deployments continue to grow…
    • …but the rate and drivers of growth vary by region
  • In detail: understanding the growth
    • 5G ushers in Phase 2 NFV in developed markets…
    • …while Phase 1 core virtualisation spreads to other markets
    • SD-WAN also goes global
    • SDN was a critical component in longhaul network upgrades
    • vRAN and open RAN enter the stage
    • A second wave of telco cloud deployments is also underway
    • NFV MANO deployments were geared to supporting multi-vendor VNFs over telco clouds
  • In detail: deployments by operator
    • Vodafone, & Telefónica: telco cloud builders innovate at the core and edge
    • China, Japan (& Finland): leading cloud-native deployment
    • AT&T & Verizon: virtualisation programmes near completion
  • In detail: deployments by vendor
    • Cisco & Nokia: generalists leading overall and in 2019/20 respectively, boosted by 5G cores
    • VMware: thriving on telco cloud and SD-WAN
    • Ericsson: leading on 5G cores
    • Huawei: real position is unclear
  • Conclusion: NFV’s first phase has delivered, but tougher challenges lie ahead
    • NFV has become a more and more integral part of telcos’ service portfolios and infrastructure
    • NFV has proven its worth in addressing the challenges of today…
    • … while cloud-native NFV is also getting underway, and may help address the challenges of tomorrow
    • Phase 2 NFV: innovating our way out of the crisis
    • What next?
  • Appendix: Glossary of terms

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