Some examples of the operator architecture for SDN and NFV networks have been out for a couple weeks or more. We’re now starting to hear more about vendor changes and even a bit more about the conditions in the marketplace. I’ve certainly been hearing plenty, and so I want to provide a status report.
It has been clear for some time that there is no compelling movement to totally transform infrastructure using SDN and NFV in combination. Optimally, SDN and NFV could represent almost half of operator capex by 2022 but that figure is now unlikely to be reached because it would require a holistic commitment to infrastructure change. The progress toward next-gen infrastructure is now most likely to be service-specific, and the primary area of opportunity lies in mobile networking today and IoT down the line.
What separates mobile/IoT opportunity from other services (enterprise vCPE, for example) is scope. Mobile/IoT is explicitly cloud-hosted so anything you build becomes reusable and leverageable, and there’s enough of either to build up a fairly significant repertoire of data centers. This lowers both cost and risk for add-on services, providing that the architecture under which you deploy is suitable for extension.
One dimension of suitability is the breadth of the business case. The problem with service-specific business cases is their specificity. You could easily frame an opportunity so specialized in benefits that it would justify deployment where other opportunities would not. Operator say that even mobile/IoT service opportunities are hampered by a lack of vertical integration of the technology elements involved in SDN and NFV. Operators today believe that neither SDN nor NFV has a mature management model, which makes it nearly impossible to assess operations costs. Since opex represents more of each revenue dollar than capex, the lack of clarity there inhibits anything but very specialized and localized investment.
The good news is that one early problem with both SDN and NFV, which is the dependence of success on coexistence with legacy elements, is now seen as solved. Most vendors now promise such integration; Ciena has just announced a kind of next-gen-network-SDK that facilitates model-building for both resources and services, a key step to solving the legacy problem. In theory, modeling also supplies the first step toward operational integration, but the rest of the steps here are taking longer, probably because of the continued debate over the best management approach.
We are making progress here, too. At the beginning of this year there were no credible models for a complete future-network architecture, and we now have public models from both AT&T and Verizon and some vendors (Netcracker, most recently) have published their own top-to-bottom vision. While even many within the operators’ organizations don’t think all the details are ironed out yet, there’s general acceptance of eventual success. The median year for availability of a complete solution from credible sources is 2018 and a very few operators think that by this time next year there will be at least one proven model that addresses the full range of issues.
Leveraging vCPE opportunity may be critical for NFV because nearly every large operator has at least some of it, and most will see it either as a lead-off opportunity or a quick follow-on. The challenge is that credible vCPE deployments so far are more likely based on premises hosting of functions in generalized appliances than on resource pools. The applications are justified by a belief that agile function replacement and augmentation presents a revenue opportunity, a view that is somewhat credible in the MSP space but not as clearly so in the broad market. And MSPs don’t usually deploy much infrastructure; they rely on wholesale/overlay relationships.
Many operators believe that consumer vCPE could be the escape from the premises-hosting trap, but the challenge has been that the cost of operationalizing a large population of cloud-fulfilled consumer edge functions isn’t known, and the savings available are limited by the low cost of devices and the need to have something on premises to terminate the service and offer WiFi connectivity to users.
SDN at present is primarily a data center play, which means that it would be likely to deploy primarily where larger-scale NFV deploys—mobile infrastructure. According to operators, the big barrier to SDN deployment has been the lack of federated controllers to extend scope and the ability to efficiently support a mixture of SDN and legacy. As noted above, these problems are now considered to be solved at the product level, and so it’s likely that trials will develop quickly and move to deployments.
Getting SDN out of the data center is the real challenge, according to operators. There is a hope that SDN could build up from the fiber layer to become a kind of universal underlay network, and some operators point to the Open Optical Packet Transport project within the Telecom Infra Project (which both ADVA and Juniper just joined) as a possible precursor to an agile electro-optical underlayment. Since that project is purely optical at this point, such an evolution would take time.
ADVA and Ciena both have strong orchestration offerings, acquired from Overture and Cyan, respectively, and at least some operators hope they’ll present something in the form of an integrated optical/SDN-tunnel picture. Brocade might also play in this to exploit their Vyatta routing instances to build virtual L3 networks. Nobody is moving very fast here, say operators, and so it probably can’t happen until 2018.
Vendors are facing their own challenges with SDN and NFV, as both comments I’ve received from their salesforce and a recent article in the New IP shows. The primary problem, say vendors, is that the buyer wants a broad business case that most product offerings can’t deliver because of scope issues. What’s needed is an integration project to tie deployment to operations efficiently, and while there are products that could build this vertical value chain (and all of it could be offered by half-a-dozen vendors), the sales cycle for something like this is very long, and vendors have been pushing “simplified” value propositions, getting them back to those service-specific deployments that cannot win on a large scale.
IoT could be an enormous boost for both SDN and NFV if the concept is recognized for what it is, which is a cloud-analytics and big-data application first and foremost. IoT could be an even larger driver for edge data center deployments, and so could revolutionize both SDN and NFV—the former for DCI and the latter for more feature hosting than any other possible service. HPE has made a few announcements that could be considered as positioning IoT this way, but they’ve not taken that position aggressively and the industry still sees this as a wireless problem.
Who’s ahead? It’s hard to say, but operators think the vendors considered most likely to “win” at large-scale SDN/NFV modernization are Huawei and Nokia, with Ericsson seen as an integrator winner. Both are seen as having a strong position in mobile infrastructure, which is where the first “big” success of both SDN and NFV is expected, and both have credible SDN/NFV stories that link to management and operations. Brocade, who just demonstrated a hosted-EPC deployment in concert with Telefonica, and Metaswitch who has had a cloud-IMS option for some time, are also seen as credible players in integrator-driven projects.
The integrator angle may prove interesting. Ericsson has been the classic telco integrator, though both Nokia and Huawei have expanded their professional-services credibility. Ericsson also has strong OSS/BSS position, but they’re not seen by operators as leading the OSS/BSS evolutionary charge. Operators are also wondering whether the Cisco relationship will end up tainting them as an objective integrator, but on the other hand it gives Ericsson a bit more skin in the game in terms of upside if a major SDN/NFV deployment is actually sold.
All of the IT vendors (Dell, HPE, IBM, Intel/Wind River, Microsoft, Oracle, and Red Hat) are increasingly seen as being hosting or platform players rather than as drivers of a complete (and benefit-driven) deployment. That’s not an unreasonable role, but it lacks the ability to drive the decision process because that depends so heavily on new service revenues or operational efficiencies. HPE and Oracle do have broad orchestration and potentially operations integration capability, but these capabilities are (according to operators and to their own salespeople) not being presented much in sales opportunities for fear of lengthening the selling cycle.
Vendors with fairly limited offerings can expect to benefit from increased support for from-the-top orchestration, both from vendors like Amdocs and Netcracker and in operator-developed architecture models. However, the OSS/BSS-framed orchestration options have to be presented to the CIO, who has not been the driver for SDN/NFV testing and trials. In fact, most operator CIOs say they are only now becoming engaged and that proving the operations benefits will take time.
Operators and vendors still see more issues than solutions, but the fact is that solutions are emerging. I think that had a respectable top-down view of SDN/NFV been taken from the first, we’d have some real progress at this point. That view is being taken now, though, but it seems likely it will rely more on professional services for custom integration than on any formal standard or even open-source project. It’s going to take time, and every delay will lose some opportunity. That’s why it’s important to confront reality right now.