In 2014, it’s “Battleground Metro”

This is always the time of year when you’re supposed to look into the crystal ball and talk about the near-term future.  OK, one of the areas we need to be watching in 2014 is metro.  I’ve noted in prior blogs that metro-area networks are critical because the majority of profitable traffic both originates and terminates in the same metro area, and that percentage is on the rise rather than declining.  I also want to point out that if you believe in “carrier cloud” you have to believe in a radical increase in metro volumes, and that NFV is the crowning factor in the “metro-ization” of infrastructure planning.  To understand where networking is going in 2014, where metro is going, we need to look at these factors.

Most of the valuable content we see today comes not “over the Internet” in a topological sense but rather from a content delivery network cache point that’s actually inside the metro network of the viewer.  This is because the high-value content is highly reused, which means it makes sense to keep a copy in all the metro caches where it can be delivered quickly and with a lower drain in network resources.  That’s not going to change, and as Amazon Prime or Roku or Google or Apple TV take hold, we’re going to see even more local video delivery.  Video is the primary source of traffic growth.  That means that the majority of the capacity growth we should expect in the coming years will have to be growth in metro capacity—user to cache.

Then we have the cloud.  Some, perhaps, might propose that cloud-created services could originate in some giant data center in the center of the country or (as Amazon’s model defines) regional centers.  That’s true in the early low-penetration days of the cloud, but if the cloud is successful on a large scale then there’s no further economy of scale in centralizing the large data center demand.  You regionalize, then metro-ize it, for the same reason you cache video.  It makes no sense to haul traffic a thousand miles to get to a data center when you have the cloud opportunity in any respectable metro to justify a local data center.

And more than one, almost surely, in any populated metro.  The Erlang efficiency of a data center plateaus as it grows, to the point where you may as well subdivide it further to improve resiliency and also to improve transport utilization.  Again, I point out that we routinely “forward cache” popular content so there are multiple copies in any given metro area, at different points.  Thus, as cloud grows we would expect to see a growing number of data centers in each metro area, linked by their own “cloud intranet”.

Where NFV comes in is twofold.  First, NFV postulates the substitution of hosted virtual functions for physical middle-box appliances.  Some studies suggest that there are as many middle-boxes as access devices; my own model says that about 28% of network devices fit into the middle-box category, but that these represent 35% of network capex.  This would clearly increase the data center demand in the metro, and since middle-box services tend to be best offered near the point of user attachment (you want a firewall close to the user, for example) it makes sense to assume that NFV would encourage distribution of hosting closer to the edge.  This is why operators have told me they would be installing servers “everywhere we have real estate”.

Second, and in my view most importantly, NFV is the architecture to create OTT-like new services for operators.  It makes no sense for operators to adopt the OTT model of basic web-hosting for their services; they can differentiate themselves on integration of services and on quality of experience if they can automate their own operations practices to deliver this stuff at a good price.  And remember, even without an FCC-hinted reform of neutrality rules, the operator cloud would be immune from neutrality rules.

What, you say?  Yes, even in the original neutrality order, things like cloud and content services are exempt from neutrality within their infrastructure boundaries.  You have to deliver content using neutral principles, but inside the CDN you can prioritize or do whatever you like.  That means that as we push “the cloud” close to the edge for cloud service and NFV reasons, we create a model of service where neutrality is an inch deep.  You have to obey it from the user’s home/business to the edge of the cloud, but no further.  You can move all kinds of stuff around inside the cloud, any way you like, as non-neutral as pleases your business model.

That’s the key metro point, I think.  Even if operators can’t immediately benefit from metro-izing their planning for profit reasons, they are experts at planning for regulatory optimality.  Build a metro cloud, dear carrier, and you have nothing further to worry about with neutrality.  And how many OTTs will build metro clouds?  The ultimate differentiator is within their grasp, and they’re driven to it by reduced costs (optimal use of data centers and transport), improved revenues (new services build on cloud and NFV), and regulations (you don’t share with anyone and you can charge for QoS inside the cloud).

This is the risk that infrastructure evolution poses for vendors.  It’s not SDN sucking the adaptive heart out of Ethernet or IP, but metro sucking all the dollars into a part of the network where “transport” means nothing more than connecting data centers with superfat (likely fiber) pipes.  If all the traffic is staying so close you can climb a tall tree and see its destination, how much core routing do you need?  In fact, it becomes easy for SDN principles to take hold in a metro-dominated world because the fact is that you have a very simple connection mission to manage—everyone goes to the nearest cloud edge and is subducted into the magma of NFV.

This isn’t going to happen in 2014, obviously.  It’s going to start in 2014, though, and we’ll probably see who gets it and who doesn’t by the end of next year.  That will determine who we’ll see around, alive, and prospering beyond 2015.  Vendors, standards bodies, network operators, everybody.  The metro could be the real revolution, and revolutions are…well…Revolutionary.

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