Software defined networking and network function virtualization are widely deemed two critical pillars of the future service provider network. The expectation for significant operations cost savings from network programmability, open APIs, and operations automation is frequently mentioned as one of the primary benefits of the NFV/SDN vision. Intuitively, the flexibility and simplification values attributed to NFV/SDN lead the industry to the conclusion that operating expenses will decrease. This article provides a view into the operational costs of a typical service provider and discusses how the NFV/SDN attributes can be expected to influence the business equation. The drivers of OPEX change, the directionality of the change, and the categories of OPEX most affected based on our analysis from interactions with a number of service providers worldwide are presented in a structured analysis.
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