Software-defined networking (SDN) and network functions virtualization (NFV) are becoming more than network technology buzzwords. AT&T (NYSE: T) has been the most vocal about its SDN and NFV initiatives, publicly sharing its goal to virtualize and control more than 75 percent of its network using a software-driven architecture by 2020. But Verizon (NYSE: VZ), while taking a more tentative approach, is on board too, as well as other carriers around the world. SNS Research expects NFV and SDN investments to reach nearly $21 billion by 2020.
Broadly speaking, NFV allows carriers to virtualize hardware functions and turn them into software within their networks. SDN enables carriers to use software to control network functions and policies in the cloud. Both are expected to reduce operators' reliance on expensive proprietary hardware platforms, helping to slash operational expenses tied to a reduction in physical space, labor and power consumption. The technologies also promise to make it easier for operators to launch new services quickly.
Both SDN and NFV sound like promising technologies for operators, saving them money in the long run and enabling the rollout of faster services as carriers increasingly compete with over-the-top players. For more on why and how operators and their vendor partners are embracing SDN and NFV, check out this FierceWirelessTech special report.