“We expect this pilot scheme will help us prove the viability of this technology and enable us to implement rollouts in a more flexible and reliable way coupled with low operating costs,” said Enrique Algaba, director of network innovation for Telefónica I+D’s Global CTO Unit, in a statement accompanying the launch of the trial.

The ISV opportunity

Independent software vendors (ISVs) also stand to gain a larger foothold in the marketplace as legacy hardware is replaced by software. Gartner Research’s Akshay Sharma says. that the virtualization of CDNs offers a particularly sweet spot for ISVs. “CDNs: virtualization of content distribution networks has less legacy networking elements, and one could argue companies like Akamai and others are already extending and scaling content delivery services more easily, over server farms, with the objective of maximizing service delivery on demand. Federation can also be easier with cloud-based solutions.”

But, he warned, ISVs need to concentrate on building unique offerings rather than duplicating the efforts of legacy providers. Analytics and service optimization are well-suited for ISV innovation.

“[ISVs should pursue] newer business models of services on demand with pay-as-you-grow revenue-share models,” Sharma explained. “And newer services like cloudbursting, with migrations of private clouds to public clouds in pay-as-you-grow services, are also good areas for ISV growth.”

For all of the action surrounding Virtualization 1.0, there is still much to be settled before the real dream of flexible service rollout and management can be realized. For now, operators are testing, trialing and tinkering with the virtualization of specific network functions, which, although a threat to NEMs’ hold on the market, opens up an entirely new world for ISVs and innovators. And though there isn’t any one particular right way to virtualize, the writing’s on the wall: Virtualization 1.0 is here to stay, and those that choose to adopt a wait-and-see attitude are going to find themselves behind the curve, locked in a rigid system and unable to compete with the CSPs of the future.