Introduction

The Advocatus Diaboli (Latin for Devil’s Advocate), was formerly an official position within the Catholic Church; one who “argued against the canonization (sainthood) of a candidate in order to uncover any character flaws or misrepresentation evidence favouring canonization”.

In common parlance, the term a “devil’s advocate” describes someone who, given a certain point of view, takes a position they do not necessarily agree with (or simply an alternative position from the accepted norm), for the sake of debate or to explore the thought further.

SDN / NFV runs into problems: a ‘devil’s advocate’ assessment

The telco industry’s drive toward Network Functions Virtualization (NFV) got going in a major way in 2014, with high expectations that the technology – along with its sister technology SDN (Software-Defined Networking ) – would revolutionize operators’ abilities to deliver innovative communications and digital services, and transform the ways in which these services can be purchased and consumed.

Unsurprisingly, as with so many of these ‘revolutions’, early optimism has now given way to the realization that full-scope NFV deployment will be complex, time-consuming and expensive. Meanwhile, it has become apparent that the technology may not transform telcos’ operations and financial fortunes as much as originally expected.

The following is a presentation of the case against SDN / NFV from the perspective of the ‘devil’s advocate’. It is a combination of the types of criticism that have been voiced in recent times, but taken to the extreme so as to represent a ‘damning’ indictment of the industry effort around these technologies. This is not the official view of STL Partners but rather an attempt to explore the limits of the skeptical position.

We will respond to each of the devil’s advocate’s arguments in turn in the second half of this report; and, in keeping with good analytical practice, we will endeavor to present a balanced synthesis at the end.

‘It’ll never work’: the devil’s advocate speaks

And here’s why:

1. Questionable financial and operational benefits:

Will NFV ever deliver any real cost savings or capacity gains? Operators that have launched NFV-based services have not yet provided any hard evidence that they have achieved notable reductions in their opex and capex on the basis of the technology, or any evidence that the data-carrying capacity, performance or flexibility of their networks have significantly improved.

Operators talk a good talk, but where is the actual financial and operating data that supports the NFV business case? Are they refusing to disclose the figures because they are in fact negative or inconclusive? And if this is so, how can we have any confidence that NFV and SDN will deliver anything like the long-term cost and performance benefits that have been touted for them?

 

• Executive Summary
• Introduction
• SDN / NFV runs into problems: a ‘devil’s advocate’ assessment
• ‘It’ll never work’: the devil’s advocate speaks
• 1. Questionable financial and operational benefits
• 2. Wasted investments and built-in obsolescence
• 3. Depreciation losses
• 4. Difficulties in testing and deploying
• 5. Telco cloud or pie in the sky?
• 6. Losing focus on competitors because of focusing on networks:
• 7. Change the culture and get agile?
• 8.It’s too complicated
• The case for the defense
• 1. Clear financial and operational benefits:
• 2. Strong short-term investment and business case
• 3. Different depreciation and valuation models apply to virtualized assets
• 4. Short-term pain for long-term gains
• 5. Don’t cloud your vision of the technological future
• 6. Telcos can compete in the present while building the future
• 7. Operators both can and must transform their culture and skills base to become more agile
• 8. It may be complicated, but is that a reason not to attempt it
• A balanced view of NFV: ‘making a virtual out of necessity’ without making NFV a virtue in itself