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Carriers have been looking to 5G to revitalize stagnant revenue streams, business models, and customer loyalty. Network transformation in preparation for 5G has been underway for over six years now, with network function virtualization (NFV) underpinning a number of efforts, and every year for the past six years, telcos have had the same complaint: they are frustrated that NFV is not delivering the scalability and programmability that the technology promised. Telcos' lessons learned include integrating cloud-native architectures, increasing automation, implementing DevOps models, broadening partner ecosystems, and participating in open source initiatives. This year, the industry is finally at the point where these lessons learned have come together.

The question remains as to whether carriers will be positioned to compete against web-scales that disrupt the way digital services are delivered. Regardless of NFV and other benefits of commercial 5G, carriers have demonstrated that they cannot match the rapid evolution of the webscales. Google, Amazon, and Microsoft's cloud-based delivery models will out-develop and outpace carriers' ability to bundle these services into their networks? But that's not to suggest it's all doom and gloom. Carriers are making the right software and talent investments, and they have been more demanding of their vendor partners to step up and offer cloud, automation, and open APIs for better communication across the network.

In June, Ovum released its 2019 NFV technology forecast, which projects carrier spending on NFV software and services to rise to $48bn by 2024. Although 5G and commercially managed NFV services draw public attention, carriers have shifted their purchasing to implement NFV across their network operations. In terms of commercial services, the most successful VNFs up to this point have been software-defined wide-area network (SD-WAN) and virtual customer premises equipment (vCPE). There has also been a notable increase in virtual evolved packet core (vEPC) over the last year, and that will continue, along with a pickup in investments around virtualized IP multimedia services (vIMS) in advance of 5G commercialization.

5G in 2020 is not the finish line for NFV…it is the starting line. There is, without a doubt, more work to be done, but the momentum in NFV is more promising than it has been in the last couple of years. Let's hope it continues.


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