Despite the threat from cloud-based ‘freemium’ messaging solutions and over-the-top provider (OTT) services, messaging continues to be a major source of revenue for communication service providers (CSPs), with the messaging market expected to generate $112.9bn in 2019 according to a Juniper Research report.
However, the revenue from more traditional messaging services has been in decline, so CSPs need to find new ways to be competitive while saving costs. As part of modernising their networks and services, they are looking at how best to support these existing services, as well as, new IP-based next generation communication services, not only to upgrade the messaging experience but make it more efficient to run – meaning consumers can take advantage of differentiated services that rival third-party messaging apps.
Today, much of the hardware which has been installed in the past is reaching end of life, meaning some products are no longer supported. CSPs are increasingly being forced to evolve or replace. Shopping for hardware seems pricy and unnecessary when a virtualised environment can provide the opportunity to break the tie between software and hardware, so that services can, in theory, run anywhere.
Over the last three years, both mobile and fixed CSPs have taken a number of steps to start the natural transition towards virtualising their networks through the implementation of Network Function Virtualisation (NFV).
On many levels, NFV is the perfect architecture for delivering messaging services. It enables low-cost elastic scale, service agility and a reduction in CAPEX and OPEX, ultimately transforming CSPs into cloud operators. By doing so, it positions CSPs as competitive players within the mobile market, enabling them to go on the offense with message service delivery—a capability they have lacked for years.
This shift to NFV can have a huge impact on the future success of operators and their ability to turn a profit, but where exactly are we today? Xura, commissioned research earlier this year to assess progress, market timing, business and technical drivers and challenges related to the virtualisation of messaging services.
The State of Play
Firstly, it’s clear that CSPs are highly committed to virtualising their networks, with 70% of them planning to virtualise some, if not all of their messaging platforms over the next four years. There is understandably some prioritisation required when bringing new messaging systems online. The research found that the messaging services being prioritised for migration to an NFV-based virtualised platforms in 2016 were SMS (27%), followed by Spam and Fraud messaging control (22%), and then IP messaging (21%).
These findings show us that CSPs are looking to virtualise the services that are most heavily used – like SMS – on the network first, and then align the launch of new offerings that may not yet be provided, like IP-based messaging services such as Rich Communication Services (RCS) – what the GSMA now refers to as ‘Advanced Messaging’ – with deployments in NFV.
Maybe not surprising is that those services like MMS, that have probably taken the biggest hit from OTT applications, seem to be furthest down the priority list, with nearly a third (31%) saying they had no plans to virtualise this service as yet.
Barriers to Progress
Some of the biggest technical challenges to NFV were identified as product interworking, orchestration and migration complexity. Orchestration in particular stands out as a “problem area”, because, while over half (55%) of respondents said they would like to utilise a single Management and Orchestration (MANO) architectural framework, they also conceded that this will be difficult to achieve.
The concern here is that CSPs will be forced to deploy a number of vendor-specific virtual network function (VNF) orchestrators, which adds both cost and complexity into any virtualisation migration. Approximately 7% of respondents are planning to use a single MANO orchestrator and they could set the standard for what’s realistically achievable over the next few years.
Additionally, there is divergence in the industry as to the preferred cloud orchestration framework for their NFV environment. whether to adopt VMware or OpenStack.
After some initial scepticism, OpenStack is gaining real credibility as a carrier grade framework in the marketplace. Given the continued demand for VMWare, increased interest in OpenStack, and to a lesser extent, Microsoft Azure (with 10% of respondents opting for this cloud orchestration framework), solutions need to be agnostic in their support for different orchestration and virtualisation environments if they are to maximise the commercial opportunities available to providers.
Progress is Inevitable
Understandably, the shift to virtualised messaging platforms will be gradual, as systems are tested, launched, and likely tweaked for brand new services. Being able to offer and launch new messaging services to subscribers quicker as a result of virtualisation, will not only enable operators to benefit from new revenue streams, but potentially greater customer satisfaction and loyalty, while helping them to compete with OTT offerings.
Ultimately, operators will turn their gaze to bigger platforms that will deliver the biggest operational and cost benefits in the long run. Paying attention to NFV now is to everyone’s advantage.