The Business Value of an Integrated NFV Infrastructure
Communication service providers' modus operandi for competing in today's dynamic market environment is to accelerate time-to-market for services demanded by their subscribers while minimizing the cost to do it. Deployment of an SDN/NFV based infrastructure has been touted as a critical step for achieving these goals. CSPs have come to the realization that it is not a straight-forward task to (re)build and migrate from their current infrastructures to an SDN/NFV based one. Major challenges faced by CSPs include the need for expensive (and mostly scarce) labor resources and finding ways to do the migration faster than their competitors. Another major challenge stems from the paradoxical goal of avoiding vendor lock-in, which in turn can increase complexity and overall costs, taking on the formidable task of integrating multiple best of breed discrete system components. Similarly, while pre-integrated NFV solutions hold the promise of reducing overall costs, CSPs run the risk of locking themselves into single-vendor implementations.
One approach to alleviate the above challenges is to find a proven, reliable business partner that offers solutions that are pre-integrated AND provide the flexibility to accommodate third party technologies.
This paper describes ACG Research’s economic analysis of two approaches for integrating and deploying of SDN/NFV solutions: 1. Do-it-yourself integrated using best-of-breed, discrete components 2. HPE Pre-integrated, using HPE’s NFV system, built using HPE’s own, as well as its partners’, products.
The analysis identifies labor and opportunity cost differences between the two approaches. ACG found that the difference in total labor costs between do-it-yourself and HPE’s to be 61% lower for two targeted VNFs (vEPC and vIMS) in favor of HPE. The opex savings for life-cycle management were found to be close to 30% lower, again in favor of HPE. The opportunity cost of using discrete components was found to be over $653 K for every 10,000 customers lost because of late market entry for the same service.