The goal of having all the dedicated hardware and software needed to operate a telecommunications network replaced by software running on standard servers - or 'network functions virtualisation' (NFV) - is proving to be the nirvana of the telecoms world.
It is still early days for NFV. Gartner's 2014 technology hype cycle does not even acknowledge its existence, but rather includes it in the category "software defined anything", which it positions in the early stages of the journey to the 'peak of inflated expectations', and a good five to 10 years away from the 'plateau of productivity'.
But don't be so sure. Australia's telcos are already talking up NFV, and it's quickly moving beyond hype.
Vodafone recently named Ericsson as the supplier of a new core network, identifying the adoption of NFV as the means by which it will gain “greater network agility and flexibility and create cost efficiencies”.
According to Vodafone Australia CTO, Benoit Hanssen, Vodafone has a solid roadmap to virtualise most of its core network within five years, and a contractual commitment from Ericsson to help make it happen.
"There are 15 -25 acronyms [representing the standard components of a mobile core network] and between next year and the end of the five year term, we have agreed with Ericsson that most of these will end up virtualised," he told iTnews.
"There are only two or three [core network components] that are not identified on the roadmap but if they become available we will also do those."
The first functions, scheduled for virtualisation in 2015, will be those supporting SMS, MMS, voicemail and the home location register (HLR) - a key component of every mobile network that authenticates users every time they want to make a call or send a message.
This represents astonishingly rapid progress for the nascent technology, driven by the huge benefits that telcos - especially mobile operators – expect from NFV. Unlike most innovations, NFV is very much operator-driven, rather than being driven by vendors, and perhaps for that reason has galvanised the industry into progressing its development at an unprecedented rate.
Ericsson has also been trumpeting its role in virtualising Telstra's network. A recent contract renewal states that the company will ”support the introduction of sophisticated software-defined networking (SDN) and network function virtualisation (NFV) functionality, which will form an essential path to deliver flexible and scalable control networks".
Vic McClelland, managing director of networks at Optus, said the SingTel-owned telco also plans to use its scale across Asia to adopt both NFV and software-defined networking, but would give no further details.
"Optus believes that it is important to build a simple, flexible, programmable and low-cost network which will allow our customers to have the best possible customer experience using the things that they love to use at the lowest cost," he told iTnews.
It is remarkable progress when one considers the NFV movement is less than two years old. Its origins can be traced to a white paper produced by 13 major telcos, including Telstra, that was presented to the SDN and OpenFlow World Congress in Darmstadt, Germany in October 2012.
The white paper revealed that a new network operator-led Industry Specification Group (ISG) was being set up under the auspices of ETSI to work through the technical challenges of realising the NFV vision.
In just two years its membership has grown to over 220 companies including 37 of the world's major service providers and a number of global telecoms and IT vendors.
The white paper summed up the problem NFV aims to solve.
"[Telco] networks are populated with a large and increasing variety of proprietary hardware appliances. To launch a new network service often requires yet another variety and finding the space and power to accommodate these boxes is becoming increasingly difficult; compounded by the increasing costs of energy, capital investment challenges and the rarity of skills necessary to design, integrate and operate increasingly complex hardware-based appliances.
"Moreover, hardware-based appliances rapidly reach end of life, requiring much of the procure design-integrate-deploy cycle to be repeated with little or no revenue benefit. Worse, hardware lifecycles are becoming shorter as technology and services innovation accelerates, inhibiting the rollout of new revenue earning network services and constraining innovation in an increasingly network-centric connected world."
NFV, the report said, would "address these problems by leveraging standard IT virtualisation technology to consolidate many network equipment types onto industry standard high volume servers, switches and storage, which could be located in data centres, network nodes and in the end user premises".
The ability to use standard hardware will have a significant impact on costs at Vodafone, Hansson noted.
"The market for mobile network gear is a few hundred mobile operators, the market for standard hardware is basically everybody in the world. It's economies of scale at its best," Hanssen said.
Virtualisation would also give mobile operators the ability to meet demand peaks that cannot presently be catered for.
"Everybody goes down to Sydney Harbour on New Year's Eve and likes to send an MMS of the fireworks. We would be able to allocate capacity for that,” he said.
"Also you get a lot of flexibility to locate things in different places. We have a number of data centres, some are new and energy-efficient and some are older and don't have the latest technology. Shifting things from one data centre to another today is very difficult but the moment you virtualise, it becomes a lot simpler."
The ETSI ISG is scheduled to publish a further nine documents at the end of the year, which will complete the first release of the NFV specification. They will describe an infrastructure overview, the virtualised network functions architecture and the compute, hypervisor and infrastructure network domains.
That initiative has been pre-empted by the release, in mid October, of a third white paper, independent of the ETSI NFV ISG, by 30 telcos including those responsible for the first NFV white paper. The participating telcos said they were satisfied that the ETSI NFV ISG has achieved its goals.
"It has exceeded our expectations in both fostering an open ecosystem for the emerging technology of NFV, and in the degree of influence it has had on the wider industry, including standards development organisations and open source communities."
However they identify a few outstanding challenges "to achieve interoperability for the key interfaces identified in the NFV architectural framework," so as to ensure an open ecosystem. They are calling for the ETSI NFV ISG to focus on addressing barriers to interoperability when it starts second two-year phase of work in February 2015.
The potential for NFV extends beyond virtualising the technology within the network that supports telco services. It can also be applied to what has traditionally been customer premises hardware, such as firewalls and intrusion detection devices. This functionality will be moved back into telcos' data centre and provided as software running in a virtualised environment.
It is likely to also find its way into consumer devices. Ericsson and Telstra are partnering on a virtual home gateway (Virtual CPE) which uses similar functions in the home.
"Customers are acquiring an ever larger number of complex devices. The concept behind Virtual CPE is therefore to simplify that complexity by moving the control back into the network," Ericsson said.
Huawei also claims to have trialled virtualised CPE (vCPE) with China Telecom. Huawei said that traditional broadband services could no longer meet enterprises' requirements because new services require additional hardware and equipment, making deployment lengthy, services inflexible and management complex and costly.
With vCPE the functions are embedded in software running in the telcos data centre and are delivered over a simple access link.
"This enables carriers to join the enterprise ICT management market and standardised devices to be deployed with ease, streamlining enterprise branch deployment and reducing operational costs," Huawei said.
Much of Alcatel-Lucent's NFV expertise sits within Nuage (French for cloud) Networks - an Alcatel-Lucent backed startup launched in 2013.
Scott Sneddon, principle solutions architect at Nuage Networks told iTnews Australia was high on its list of target countries. It has just appointed its first to staff members in Australia and responded to two RFPs from major telcos.
"Australia is a big priority for us and within Asia Pacific has been running pretty close behind Japan in terms of the customer understanding of NFV," he told iTnews.
"The kinds of questions we get from customers in Australia have been quite advanced. There is a good understanding of the technology and a good understanding of use cases. It's one of the first markets we have staffed up with local people."
In October, Alcatel-Lucent signed a technical collaboration agreement with KT, the largest communication service provider in Korea, to create an NFV proof-of-concept that will include Alcatel-Lucent’s virtualised evolved packet core (vEPC), its CloudBand NFV platform for the management of the NFV environment and Nuage Networks' virtualised services platform (VSP) for SDN to consolidate and automate the network.
Sneddon said the company had similar involvements with a dozen carriers around the world.
"We have a lot of visibility into what is happening. It's just in the last six months that we have moved beyond conversations to see some lab trials, proofs of concepts and some early deployments."