Data Center

Exploring New Opportunities via Network Functions Virtualization

5G is set to give the global economy a huge boost, enabling an estimated $13.2 trillion of economic output by 2035. That wealth will be generated across a wide range of industries, building on the new capabilities 5G brings.

These capabilities include:

  • Mobile broadband. Users will be able to stream videos on mobile phones, but mobile broadband will also be useful for machine vision applications using video feeds from remote cameras. The data rate of 5G is between 10 and 100x better than 4G.
  • Massive connectivity. Up to 100x the number of devices can be connected in the same area on 5G compared to 4G. New industrial applications will be possible. All the machines in a factory can be connected wirelessly, to share richer data for quality control and fault prediction.
  • Low latency. Having a much faster network enables new use cases, including safety-critical applications such as autonomous vehicles.

For operators, 5G represents an opportunity to grow their businesses, and to further modernize their infrastructure. And a key technology enabling 5G is Network Functions Virtualization, or NFV.

The Journey Toward NFV

In the past, operators built their network on fixed-function hardware appliances. The problem with that is that the network had to be provisioned for peak demand all the time, and every element had to be upgraded together. It was inflexible and slow to scale. If you needed to upgrade the network, there was a long lead time to order equipment, get it into the network, and start using it.

In recent years, operators have been moving toward NFV. The idea is that instead of using fixed-function devices, general-purpose servers are used, with the network functions running in software.

NFV brings the benefits of the cloud and data center virtualization to the network. It’s scalable because more servers can be quickly added to increase capacity, and servers can be reallocated to support priority workloads at peak times. It’s flexible because network workloads can run anywhere, subject to latency constraints on certain functions. That’s the theory at least: In practice, many operators are still on a journey toward enabling that degree of flexibility.

Bringing NFV to the Edge

NFV began in the core of the network, but is now being used at the edge of the network, close to the radio antenna. To meet the extraordinary traffic demands of 5G, operators are looking at using virtualized radio access network (vRAN) software. For example, Rakuten is using Altiostar’s software to run 5G network functions in containers, managed by Kubernetes. The radio access network (RAN) was previously built on proprietary devices.

Standardization efforts are underway to separate vRAN software from hardware, and to provide common interfaces between RAN components. The vision is for operators to able to build their network using components from multiple vendors because everything is fully interoperable.

Choosing best-of-breed components gives operators greater flexibility in how they design the network, and enables them to introduce competition to push down costs. Given how risk-averse operators are (and must be), some will still end up buying integrated RAN solutions from a single vendor.

Adding Services at the Edge

Using standard general-purpose servers at the network edge creates an opportunity for operators to offer value-added services, running on those same servers.

For years, operators have seen over-the-top providers make the big money while the operator services have been purely about enabling access to the Internet. Running applications in the network gives operators a chance to climb back up the value chain.

Operators can uniquely offer carrier-grade reliability, security, and latency, giving them a competitive advantage over the cloud. Applications at the network edge have latency of around 10-40 milliseconds, compared to 100 milliseconds in the cloud, for example. In customer premises equipment, latency can be up to 5 milliseconds.

Having compute in the network will make it possible to collect and process data in new ways:

  • Augmented reality could be used with machine vision for quality control on assembly lines
  • Artificial intelligence could be used for monitoring security cameras
  • Enterprise resource planning and retail systems could benefit from lower latency to improve productivity and customer satisfaction

Writing software for the network edge is not the same as writing for the cloud, so one challenge will be to make it approachable for developers. Operators including China Unicom, Deutsche Telekom, and Telefonica are working with the mobile industry organization GSMA to create a standardized platform. It aims to make the low-latency compute and storage in the network available to developers, so they can create enterprise applications that take advantage of the network’s unique capabilities.

One thing we’ve seen before is that standardization stimulates innovation. As 5G becomes more widely available, and the network becomes more flexible and more intelligent, it will be exciting to see the new ideas and applications that emerge.


NFV is still an emerging field within the broader software-defined networking (SDN) industry, and information can be challenging to come by. When you begin your research on NFV providers, here’s a starter list of vendors who are innovating in this space.