We all see people differently, sometimes because of our own biases and sometimes because people put on a different face for different situations in their lives. Apparently this is true of technologies too, because what NFV looks like and where it’s heading looks different to each of the major NFV constituencies, and how NFV’s “faces” might be harmonized could be critical to its real success.
Facing the facts
Face One is the NFV Happy Face. Network operators like Telefonica, Masergy, and China Mobile have touted their evolution toward network functions virtualization (NFV) and offered real examples of deployment. Surveys published here on The New IP have shown high rates of anticipated adoption for 2016. From that perspective, NFV is a success.
Ah, but then there’s Face Two, the sourpuss face. CFOs at network operators worldwide have told me for six months that they can’t validate a large-scale business case for NFV. NFV salespeople at accounts all over the world have said that NFV is a much harder and slower sell than they’d expected. From that perspective, NFV is a failure.
The face that may count the most is Face Three, the face of Wall Street. Financial analysts and hedge fund managers don’t believe that network infrastructure or technology transformation is the path to success. Their primary measure of operator financial health is the arcane measure called “EBITDA,” which stands for earnings before interest, taxes, depreciation, and amortization. The biggest drag on EBITDA is opex, not operations expenses as in network ops as we’d understand it, but as operating expenses or the whole administrative process of doing business. NFV could be a success, if it addresses EBITDA.
Read the rest on The New IP.