Amdocs would like its Tier 1 telco customers to deploy virtual customer premises equipment (vCPE) in both enterprise and residential settings so they can reap the benefits of Amdocs' network functions virtualization (NFV) and software defined networking (SDN) offerings. To prove vCPE’s business case, Amdocs commissioned Analysys Mason to conduct research, and the results showed that enterprise vCPE has a far better return on investment than residential vCPE.

The white paper released yesterday points to a 156 percent return on investment for enterprise vCPE and a net present value of $1.1 billion over a 5-year migration period. This compares to residential vCPE with a 49 percent ROI and net present value of $500 million.

For the enterprise, the ROI would stem from increased revenue from up-sell/cross-sell of existing and new SDN-based services and 47 percent operational cost savings per site per year from the use of reusable vCPE, OSS automation, and customer self-provisioning.

"We found that vCPE-enabled services is a revolutionary opportunity for first-mover, fixed-line service providers, provided they reach their critical mass — 50 percent for residential and 40 percent for enterprise — for vCPE customer migration, says Glen Ragoonanan of Analysys Mason.

The research firm developed its ROI models for enterprise and residential vCPE services by creating a composite service provider profile, derived from its own benchmarks, interviews with service providers, and secondary research.

While the enterprise vCPE gives notable revenue benefits, the residential vCPE provides stronger cost savings over a five-year migration period of customers. The model shows an 82 percent CPE-related operations cost savings per household per year for a service provider with 17 million vCPE-enabled customer households over the five years.

Amdocs, which announced a new NFV offering Tuesday in conjunction with the report, not surprisingly stresses that the research shows the benefits that NFV/SDN can deliver for first-mover service providers.

Amdocs' new product, Service Design and Create, is aimed at service providers to help them design, test and launch new network services faster. It joins Amdocs’ NFV portfolio alongside a network cloud service orchestrator, NFV orchestration software, and a number of virtual network functions (VNFs).