Micro-Economic Benefits of Peer-Producing Containerized Network Functions

Abstract

Discrete, non-virtualized network elements are characterized by large costs, limited functions, vendor lock-in, and limited orchestration. Virtualization technologies like virtual machines (VM) and containers have expanded the scope of virtual resource utilization through consolidation of workloads that were previously running on multiple servers by running them on a single server. With the advent of Network Functions Virtualization (NFV), industries are able to reduce the micro-economic factors associated with vendor proprietary model such as transaction costs and (physical and human) asset specificity to deal with vendor vulnerabilities in contractual relationships because Virtual Network Functions (VNFs) can virtualize dedicated networking functions that were traditionally performed by vendor appliances such as routers, switches, firewalls, and load balancers. Even though virtualization technologies (VMs and containers) and NFV have demonstrated their benefits in the market, little attention has been devoted to the development and adoption of containers to build VNFs. This research paper identifies micro-economic factors, such as transaction costs, associated with searching, buying, provisioning, and maintenance of vendor proprietary appliances and compares them with the coordination costs associated with the adoption of containerized VNFs. This comparative analysis could be used to identify the type of network operators that could serve as key organizers (the network operator who can benefit largely by adopting containerized VNFs) of an open source peer production model as well as other firms that could serve as individual contributors. Furthermore, to identify various rewards and incentives that a managerial firm can leverage to motivate its employees to participate in such an effort, a quantitative survey was conducted (with Tier 1, Tier 2 and Tier 3 Service Providers) to identify the managerial incentives such as bonuses, rewards, peer recognition, and promotion targeting varied network operator firms to accurately capture and analyze employee interests/motivation.