One of the questions to solve in the industry: can the telecom companies capture more of the growth with Digital Transformation? The answers is yes, but to do that they need to build a network that enables consumers to more easily access connected digital applications. That means how to better understand and care for their customer using digital tools.

The traditional models of telecom companies for provisioning services is affected by a high fixed financial overhead with peak of traffics (Voice and Data), and also the rigidity of physical infrastructures, which typically take months to provide and often one to two years to actually introduce into new products or services.

Twenty years ago, telco operator networks, even cable TV companies, were distributed around a hierarchy network of central offices (in the case of cable companies its, networks were distributed around satellite receivers and head end for signal distribution).

Right now The Network is working on IP, using IMS and being oriented around data centers in order to compete with the OTT (Over-The-Top) companies, to implement an orchestrated operation based in cloud and the increasing need to perform the functions of data centers to optimize those environments needed to adopt more software and more IT standards.

The step to move the network to orchestrated cloud architecture represents a cultural shift for how telecoms build and manage infrastructure. The key benefit of this is that cloud architecture, based on network functions virtualization (NFV) and supported by SDN, is more open, more flexible, and has tools for data analytics and automation; features that are not available in the legacy network.

The Virtualization-NFV and Softwarization-SDN of the network mitigates risk because costs are mostly variable. While more physical infrastructure helps realize consistent economies of scale, NFV has advantages for what can broadly be characterized as experimentation and uncertain demand conditions, and its potential modularity helps network scaling and SDN with the separation of “control plane” from “data plane”, designed among other things to shift control from individually localized routers to a centralized controller that can make more intelligent routing choices with a more comprehensive view of an entire network.

The key goals of SDN, NFV and their virtual domain include automating networks to much higher speeds and making them much more malleable and fluid on multiple dimensions in turn-up and service activation, in how functions are partitioned and divided between physical and virtual devices, and in a physical location.

Both technologies become faster for the network, closer to customers and to alternatively centralize and/or distribute operations as it deems most productive, tying all components together through software; it’s the main reason why SDN and NFV are the technologies for the network on this century and are also going to work together with 5G.

SDN and NFV are dramatic and ongoing industry developments; at the same time, they are ripples in a more comprehensive long term historical trend: Digital Transformation Intensified demands on communications networks, particularly in required speeds, complexity and customer services, make it increasingly imperative for operators to fully automate these networks, and beyond.

There are crucial differences between implementation of these new technologies within the data center, where they probably have more immediate and limited problems to solve and development has proceeded fairly rapidly, and in the much larger “wide area” where progress is slower and more problematic, though also proceeding. Cloud computing and virtualization have clearly acquired their strongest footholds in data centers. In a sense, virtualization promises to extend the data center environment out to subscribers, creating a universe in which customers and providers operate in ways increasingly resembling a data center.

The big issues in SDN and NFV deployment relate to how is it best to bridge from data centers into the much larger and more complex wide area environments, creating bigger and more “meshy” networks with multiple routers and switches connected in complex topologies, and with the control plane maintaining “knowledge” of what is connected, how and where and through which interfaces.

Digital Transformation processes require modern “customization” of the services, Network as a Service, orchestration capabilities, such as self-service portals; order management, client and network analytics.

Operationalizing NFV and SDN will take center stage to protect existing investments while simultaneously creating new revenue streams. This technology shift will also trigger organizational skills and process changes that will reflect the move from physical network engineering to service driven software and agile operations.

The transition towards virtualized network operations will change the way traditional telecom companies create, manage and deliver services to their customers. NFV and SDN can expedite a high-quality digital customer experience, analogous to the way over-the-top players operate, as long as Telco can address the many cultural and mind-set challenges that exist beyond the Digital Transformation Concepts.