NFV promises to revolutionize telecommunications networks by improving service agility, simplifying network operations, and reducing expenses. One of the biggest challenges for global cloud providers and telecommunications service providers is to quantify the return on investment (ROI) and business benefits for NFV, given the changes and investment required for their network operations.

It’s worth taking a more detailed look at how service providers make this determination of the business benefits for NFV – and the full list of factors involved. Below is an outline of the process and what aspects are being examined.

NFV ROI and business benefits can be justified by a reduction in expenditures (both capex and opex) and by new revenue generated by NFV-related services.

Key questions include:

• What are the specific revenue-generating services enabled by NFV?
• Which network elements are good candidates for virtualization?
• How does NFV reduce capital and operating costs?

Service providers are in the early stages of NFV implementation (trials, proofs of concept) in parts of their networks. Some elements of the network (e.g., new builds) are ripe for NFV transformation – while others clearly are not.