5G and network functions virtualization

For the past seven years, the communications industry has pursued a transformation initiative called network functions virtualization (NFV), which replaces traditional network equipment with software network functions that can run on industry-standard servers in private or public cloud environments. NFV was intended to significantly reduce CAPEX and OPEX for service providers while also providing them with flexibility and agility to bring new services to market more quickly.

However, the software is not cloud-native. The term “cloud-native” describes how internet companies like Amazon, Facebook and Netflix design and deploy (cloud-based) software that is highly efficient, agile and scalable. CSPs now recognize that applying the same cloud-native principles to NFV is the best way to produce the efficiency and service agility they require to sustain their business models.

Unfortunately, there is no easy path to cloud-native software from existing codebases and current virtual network functions. Cloud-native network functions (CNFs) are designed specifically for the cloud and, as such, represent a clean break with the past.

Embracing this discontinuity won’t be easy for service providers. The best time to start is when CSPs are poised to invest in new network technology like 5G. More specifically, the 5G mobile packet core network is particularly well suited to the cloud-native approach.

Many network operators plan to put stand-alone 5G into commercial service in the next couple years, at which point the cloud-native software ecosystem will be more mature. The 5G standards for the core network define a service-based architecture, which is a prerequisite for a cloud-native approach. There are a handful of challenger vendors with a real understanding of cloud-native design principles that are developing 5G core products.

High-speed 5G services will drive up mobile data traffic but with little-to-no uplift in average revenue per user (ARPU), which necessitates major cost reductions to sustain the CSP business. Also, delivering future 5G services — especially for industrial sectors — will require new techniques like network slicing across core and edge clouds, which is only feasible with the automation enabled by a cloud-native approach.

The ability to “slice” the network will be the biggest potential boon of the 5G revolution, giving network operators “skin in the game” and potentially turning them from mere conduits for communication to real value-added players.

For operators, it is the ability to virtualize network functions, utilizing new architectures (NFV, SDN) built into 5G systems that will be deployed as part of the overall network. Operators will be freed from the previous limitations inherent in existing networks, and nearly all functions will be virtualized and software-ized.

With virtualization inherent throughout the system, operators will be free to distribute, allocate, compartmentalize, or otherwise slice and dice their now very substantial assets per dynamic market demand all the way down to the single end user.

Virtualization and network slicing provide operators with their own opportunities — giving them the ability to increase their portfolio of value-added services and their profitability. With 5G-based virtualization, operators can deploy resources as needed for different purposes, thus maximizing their efficiency and providing top quality of service.

Operators could build networks specifically for large enterprise organizations that need a lot of bandwidth or low latency and are willing to pay for better service on a network. Operators could develop a virtual “intranet” internet for enterprise customers or provide organizations with the resources they need to set up a private network.

To manage this dynamic redistribution of resources, operators will need to automate their operations and systems as much as possible. The plethora of equipment and the huge variety of deployment possibilities, plus the constantly ongoing shifts in demand, will require the implementation of an automated, intelligent software system that will be able to not only dynamically redeploy assets and resources, but also anticipate needs in advance to make sure that the resources are available when called upon in real time.

Using machine learning, systems will be able to learn what triggers a ramp-up in demand on any of the virtual networks. With the ability to slice networks as needed, operators can offer specific services to customers or partners. Operators should partner with tech companies to develop apps and SaaS applications that customers could plug into as needed and at will to deal with localized or specific issues and events that crop up.

The cloud-native approach to NFV promises stunning improvements in network operations efficiency and customer-facing responsiveness thanks to fully automated life cycle management of network functions. 5G will be a turning point in network virtualization efforts that will set many CSPs on the path to becoming cloud-native companies. CSPs that are able to break with the past and embrace a cloud-native approach will become the winners of the future.