Facing the Future: Inside Vendor Failures to Sell NFV Transformation

I blogged recently on the views of the “literati” of network operator planning for NFV, and one blog dealt with what they thought vendors were doing wrong.  Yesterday, Ray Le Maistre from Light Reading did a video piece on the OPNFV event and made one of the same points.  The literati said that vendors don’t present their complete solution, and the LR piece said that operators said that OSS/BSS integration was lacking as a part of NFV solutions.  The truth is that at least a dozen vendors can provide just what operators want and that Light Reading said was missing.  What’s up?

I’ve noticed that when the same vendors who I know have a complete solution either send me stuff or talk with me, they seem to omit the very thing operators are saying they need NFV to provide.  I’ve also noticed that the vendors’ salespeople tell me that they aren’t getting the deals as fast as they’d like, which suggests that at the sales level there’s proof that there is an omission of capabilities going on.  So it’s not in the operators’ minds here, and Ray at Light Reading isn’t misreading the market.  We’re not singing the right song.

I’d like to be able to call on an objective outside resource like my literati to explain this, but of course you can’t expect somebody to tell you why someone isn’t telling them something. I have to present my own view of the vendor motives, and that’s what I’ll do here.

IMHO, the biggest problem is that vendors have been chasing media-generated NFV rainbows.  The NFV market is at this point so totally speculative that no responsible forecast for it could be done, but not only do we have forecasts, we have escalating ones.  The reason is that a story that says that NFV will sell five or ten or twenty or a hundred billion dollars in five or three or even one year is exciting.  People will click on URLs to read it.  For the forecasters, who buys a report that says there’s no market forecast for something?  Who buys one that builds a vision of an extravagant market?  In the first case, nobody.  In the second, every product manager responsible for the products for that extravagant market.

The natural consequence of heady forecasts is unrealistic expectations.  One large NFV hopeful confided that their quota for 2016 was probably going to end up larger than the total of NFV spending because that had been the case in 2015.  As pressure to perform against the forecasts mounts, companies look for quick deals and shorten selling cycles.  Nobody wants two-year projects to prove a business case here.  They don’t need it; after all, NFV is the way of the future and XYZ Analytics says so.

The second problem is that there is no PR benefit to having a full solution, so there’s no incentive to talk about one.  Everybody is an NFV player these days.  If you sell servers you’re a NFV infrastructure player, and those who offer Linux and middleware are virtualization and platform players.  Everyone who has anything that could be considered a network function can virtualize it (meaning make it cloud-hostable) and be an NFV virtual-function provider.  If you have OpenStack support or OpenDaylight you have “orchestration” so you have MANO, and of course if you provide any form of management you’re a shoo-in.  These are all conflated in a story or a press release, and we lose the distinction between somebody who can build a case for NFV deployment and those who expect to ride on the coattails of such a deployment.

NFV is really complicated.  Even the ETSI ISG, who declared a lot of the issues out of scope originally, are now admitting that we need things like service-level orchestration and federation across operators and implementations. Add in these new requirements and you rule out almost everyone as an NFV leader, someone who can make the business case, and relegate them to NFV exploiters who hope that first somebody else makes that business case and, second, that they can horn in on it.

The next problem is related, which is that operator drive for an open solution means nobody gains much by developing the market on their own.  A vendor who comes up with the right approach is essentially mandated to share it.  Given the enormous cost of building a complete solution and productizing it, it’s not a surprise that vendors don’t want to bear that cost without having a leg up on reaping the benefits.  Open approaches mean that they probably can’t do that.

The fact is that open strategies are going to have to be funded by either the buyer or by those vendors who win almost no matter what.  An example of the former is the initial focus on standards and open-source, and now the operator-created architectures.  Intel is an example of a vendor who wins no matter what; whose chips are in all those boxes?

Problem number four is that sales organizations have no collateral to support the kind of operations-integrated sale that Ray from Light Reading heard operators want to see.  Some of the salespeople for those six vendors who could do what operators want literally don’t know that they can.  More don’t know how to promote it or who within the operator organizations to promote it to.

Some of this problem is surely related to the issue of sales quotas an instant gratification, but that’s not the whole story.  This, as I said, is complicated and sales organizations who are used to selling interchangeable boxes into an established demand aren’t prepared to build a business case and sell a complex solution to a complex problem.

And there is a final problem, organizational culture is holding back success.  Ray made that point in his video, and we’ve all heard that operators have to change their culture to make NFV succeed.  Well, perhaps there are some issues with the culture of operators, but the truth is that it’s the vendor culture and not the operator culture that are the problems today.

Transformation to a new model of networking means, for vendors, that the easy happy days of having a buyer come to you and say “give me a dozen routers” is gone.  Instead they’re coming with a request for you to make their services more agile and their operations more efficient, and by the way do that at a lower overall cost than they’d been presented with before.  You can’t really even make money selling professional services to accomplish these goals, because without an understanding of how to do what the buyer wants you can’t make a business case for doing anything at all.

All of this explains why NFV has failed to live up to heady expectations, but it doesn’t mean it never will.  There are benefits to NFV, and in many areas they’re compelling.  We tried to advance to NFV on a broad front, and we simplified ourselves into failure doing that.  Breadth is breadth in complexity as well as in opportunity.  Now we’re moving on multiple narrow fronts, constrained more by the fact that we’re not sure all our steps will add up to progress and not silos.  Operator architectures are guiding the framework for unification and federation, a framework we should have had from the first.

But we could still mess this up.  Will every operator do an ECOMP like AT&T, or even be able to adopt AT&T’s own model if they open-source it?  Benefits justify an architecture, architectures frame product elements, and product elements are what buyers purchase.  Making the connection at the top is what makes the world go ‘round, and more attention to that top-level process is essential, even and perhaps especially for the media.