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Long Journey to Reach Digital Transformation Objectives

During 2015, across numerous industries, the quest for a competitive advantage via a Digital Transformation agenda has been a key focal point of strategic planning discussions between concerned CEOs and their executive leadership teams. Making bold moves and implementing big changes requires a huge concerted organizational effort. Besides, it can't be rushed.

However, with their legacy business models already showing signs of imminent disruption, the leaders of major telecom service providers have been moved to action. Many have discovered that they're not adequately equipped to address the forward-looking view of their markets. So, they've now embarked on several momentous experiments -- intended to uncover the foundation for future success.

According to the latest worldwide market study by Technology Business Research (TBR), the telecom service provider sector is entering the early commercial stage for Network Functions Virtualization (NFV) and Software Defined Networking (SDN) market development.

The latest TBR study highlights a growing number of proof of concept deployment contracts and trial evolution plans for Tier 1 network operators across the key domains within these companies.

That being said, although confidence is rising, the TBR assessment indicates many key questions remain for network operators before NFV and SDN can graduate to mainstream adoption. Once again, the main concerns are related to People and Process; not Technology.

The Slow Pace of Change Management

TBR predicts that a small group of early-adopter telecom service providers will continue to lead the research and development of NFV and SDN applications in the interim, with the rest of the industry likely to follow sometime during 2018.

Clearly, the more conservative network operators are waiting for confirmation that NFV and SDN platforms prove to reduce the cost of delivering network services in high-volume operator networks.

On the supplier side, TBR research demonstrates that the pioneer vendors are continuing to build out their SDN and NFV related portfolio and alliance strategies to help them drive adoption. Meanwhile, eventual monetization remains the main focus, and an ongoing concern.

According to the TBR assessment, more than 50 network operators are engaged in SDN and NFV trials and controlled experimental implementations. The most compelling business case, so far, is network services on-demand delivered to businesses -- either through customer self-service portals, or virtual customer premises equipment (CPE).

Savvy Vendors Offer Professional Services

Some network operators have already been able to demonstrate cost savings in service provisioning time, while also increasing customer satisfaction.

While the case for NFV and SDN is being proved domain by domain, many challenges remain. One very significant obstacle is organizational readiness. Technology is rarely mentioned as the primary roadblock to meaningful progress.

TBR found educating employees on new automated operations is critical to network operator success. Another area of challenge is ensuring interoperability across diverse NFV and SDN implementations. Vendors that are able to offer skilled and experienced software architect resources will have a clear advantage.

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