Network Functions Virtualization (NFV) technology is on a roll this month, notably with all the action at Mobile World Congress 2015. It's especially attractive for the wireless world, as the shift to all IP networks with the deployment of LTE enables mobile network operators to manage, scale, and shift around virtual resources within the network.

NFV and SDN are driven by one underlying technology. Ethernet. Fast Ethernet, and I don't mean the 100 Mbps type, but optically-based, blazing gigabit and beyond Ethernet capable of handing the data flows necessary to setup, configure, serve, shutdown, and reconfigure network services on the fly.

Already there have been demonstrations of a "holy grail" of network software, proof-of-concept LTE networks putting together NFV with its brother, SDN, to provide agile, programmable networks that can spin up capacity and functionality where and when needed, adding value added (and more importantly, revenue generating) services on COTS hardware. If a service doesn't work out or there's low demand, it's no big deal; shut down the software instance and reuse the baseline infrastructure for something else without having to roll trucks or buy new gear.

Telekom Austria recently announced their deployment a multi-vendor NFV 4G core on a live network.  VIP Mobile, Telekom's Serbian subsidiary, has successfully operating all of its voice over LTE (VoLTE) elements in NFV mode and is in the process of rolling out the service commercially across the network. When it goes live, it will be a big milestone for NFV, showing that the technology is viable and real in production networks. The fully virtualized VoLTE stack included technology from Connectem, Metaswitch Networks, OpenCloud, with participation by Intel, VMware, and Red Hat -- we're talking some serious names involved.

If there's an irony/sadness here, it is that European service providers are once again moving faster than their more conservative North American counterparts. Then again, we don't know what sort of cards and plans T-Mobile US has up its sleeve, so there might be some near-term surprises.

Longer-term, AT&T announced it plans to virtualize and control as much as 75 percent of its customer facing network by 2020 as a part of its Domain 2.0 plans. The carrier expected a reduction in capital expenses from $21 billion in 2014 to around $18 billion in 2015, with open source software and virtualized networking translating into lower capital expenses because it doesn't have so much dedicated hardware sitting around. Verizon is also on the NFV/SDN bandwagon, but it seems to be moving a bit more conservatively than AT&T when it comes to embracing the concept.

NTT's spin on NFV is also interesting and could be the future evolutionary path for service provider virtualization. The company's "NetroSphere" concept takes the virtualization of hardware all the way down to the component level. Instead of servers being the largest hardware piece, NetroSpear modularizes things further, into bits such as the CPU and memory. Virtual systems can be assembled and optimized based upon the needs of a particular application. For example, if you need to spin up transcoding, you'd pull up optimized CPU processing and memory.

NetroSphere's selling point is to further open up the suppler ecosystem for more participants and enable greater sharing of resources tailored to specific tasks. NTT is (rightfully) concerned that deploying NFV may result in the same sort of siloing that occurs with proprietary equipment, with a short-term shift to open standards gear, but still provided by the same vendors. NetroSphere should, in theory, enable mix and matching of components from multiple vendors on a virtual level.  Implementation of NetroSphere will, of course, require serious Ethernet speeds.

Regardless of the approach. NFV is moving out of theory and lab trials into production environments.  Service providers will get more bang for their buck when it comes to network capital expenditures, both in terms of initially purchasing equipment and being able to repurpose gear on the fly using software rather than being locked into a dedicated solution for each box on the network.