Studies are always a good thing, and we have one now that could be particularly good for the industry. Working with AD Little, Alcatel-Lucent’s Bell Labs cooperated to generate a report (registration required) that outlines the benefits to be expected from SDN/NFV adoption. There’s good news and bad in the report, at least from the perspective of most operators, and good thinking and bad as well. In the balance, it’s a very useful read because it illustrates just what’s important to drive SDN/NFV forward, and the gap that exists among interested parties on the best way to do that.
Two early quotes from the report set the stage. The first sets the stage, citing the new world that mobility and the Internet have created: “In this new environment, significant change is needed to the nature of the services offered and the network implementing them. These changes must allow the network to participate and contribute to the development of the cloud ecosystem.” The second frames a mission: “The foundation of this crucial change is next-generation cloud/IP transformation, enabled by NFV and SDN. In our view, it is a clear imperative for the industry.”
Everything good and bad about the report is encapsulated in these quotes. The future has been changed by a new notion of services. The role of SDN and NFV is to facilitate a cloud/IP transformation. I agree with both these points, and I think most others would as well. That would mean that the benefits of SDN and NFV should be achieved through the transition to the cloud. That’s a point that competitor HP just made, and also one I believe to be true.
The authors focused on EU operators probably because they’ve led in SDN/NFV standardization and are also leaders in the lab trials and PoCs. These activities are generally more tactically focused, and that becomes clear when the authors state the presumption of the study: “What is clear, however, is that virtualization, programmability and network automation, enabled by these new technologies, will drive down industry operating costs considerably.”
The “enabled by these new technologies” part is the key point, I think. There are two interpretations possible for the phrase. One is that new technologies will open new operations models as they deploy, changing the way we operationalize by changing what we operationalize. The other is that the new technologies will be tied to legacy services as well as to changes in services driven by changes in network infrastructure. The report takes the former position; SDN and NFV will transform us as they deploy, and I think that begs some serious questions.
Accounts from writers who discussed the report with authors say that the timeline for realizing these from-the-inside benefits is quite long—ten years. That delay is associated with the need to modernize infrastructure, meaning to adopt hosted and software-defined elements that displace long-lived equipment already installed. There is a presumption that the pace of savings matches the pace of adoption, remember.
“Opex” to most of us would mean human operations costs, and it certainly means that to operators, but the study seems to miss two dimensions of opex. First, there is nothing presented on which you could base any labor assumptions, at least not that I can see. That may be why the labor savings quantified are a relatively small piece of the total savings projected. Second, there is nothing presented to assess the operations complexity created by the SDN or NFV processes themselves. If I replace a box with three or four cloud-hosted, SDN-connected, chained services I’ve created something more operationally complex not less. If I don’t have compensatory service automation benefits, I come out in the hole not ahead.
I’m also forced to be wary about the wording in the benefit claims. The study says that “the efficiency impact of onboarding NFV and SDN for these operators could be worth [italics mine] 14 billion euros per year, equal to 10 percent of total OPEX. The results are driven by savings from automation and simplification.” That kind of statement begs substantiation. Why that number? What specific savings from automation and simplification?
From a process perspective, the industry has produced no accepted framework for operationalizing either SDN or NFV. Only about 20% of operators say they have any tests or trials that would even address that question, and only one of them (in my last conversations) believed these tests/trials would actually prove (or disprove) a business case.
We could fix all this uncertainty by making one critical change in our assumptions, taking the other path in the question of what applying “new technologies” means. That assumption is that service modeling and orchestration principles created for NFV infrastructure would be immediately applied through suitable infrastructure managers to legacy infrastructure and services as well. In short, if you can operationalize everything using the same tools, you can gain network-wide agility and efficiency benefits.
If we’re applying operational benefits network-wide, then savings accrue at the pace we can change operations not the pace we can change infrastructure. The study says about ten percent of opex is eliminated; my figures say about 44% would be impacted, and the difference is pretty close to the portion of infrastructure you could convert to SDN/NFV using the study’s guidelines. Apply opex benefits to a larger problem and you get a more valuable solution.
Perhaps my most serious concern with the assumptions of the study is the implied scope of the future carrier business. We are saying that the network is transformed by new opportunity, but that the operators’ role in this transformation is confined to the least-profitable piece, the bit-pushing. The examples of new services offered are all simply refreshes of legacy services, packaging them in a more tactical way, shortening time-to-revenue for new things. There’s nothing to help operators play in the OTT revolution that’s created their most dramatic challenges. Good stuff is happening, we’re saying, and you have to be prepared to carry water for the team. I disagree strongly with that. IoT for example has many of the attributes of early telephony. It involves a massive coordinated investment and an architecture that keeps all the pieces from creating fiefdoms of one element that are useless to every. Why would a common carrier not want to play there, and why would we not want them to?
The future of the network is to broaden the notion of services. I can’t see why operators would invest in that and then leave all the benefits on the table for others to seize.
All of the basic points in the document regarding the value of agility and efficiency are sound, they’re just misapplied. If you want to fix “the network” then you have to address the network as a whole. NFV and SDN can change pieces of the network but the bulk of capital infrastructure will not be impacted even in the long term—access aggregation, metro transport, and so forth are not things you can virtualize. In the near term the capital inertia is too large for any significant movement at all. It’s a matter of timing.
I think this study is important for what it shows about the two possible approaches to SDN and NFV. It shows that if we expect SDN and NFV to change operations only where SDN or NFV displace legacy technology, it will take too long. Particularly given that operators agree that their revenue/cost per bit cross over in 2017 on the average. Alcatel-Lucent and ADL have proved that we can generate “second-generation” benefits with NFV and SDN but they missed the fact that to get early benefits to drive evolution and to deliver on the “coulds” the report cites, we need to make profound service lifecycle changes for every service, every infrastructure element. And we need that right now.
Alcatel-Lucent isn’t the only vendor to take a conservative stance on SDN and NFV, of course. Operators, at the CFO level at least, generally favor the computer vendors as SDN/NFV partners because they believe that class of supplier won’t drag their feet to protect legacy equipment sales. The operators, in the recent project documents I’ve seen, are expanding their scope of projected changes. They want “transformation” not evolution, and the question is who’s going to give it to them.