I was talking yesterday with an old friend from the network operator space, a long-standing member of the NFV elite, and one of our topics was just what could pull through SDN and NFV. Two specific notions came up, one the Internet-of-Things opportunity I mentioned a number of times in my blogs (yesterday, for example) and the other was content delivery. I’ve already promised to look more deeply into the former, but content and in particular mobile content is also very credible. Let’s take a look there first.
To set the stage, mobile services are the bright spot of the network operator space, if there is such a thing. The margins are higher, there’s still at least in some areas a hope to increase ARPU, and regulations in many areas are a bit lighter. For a decade now, mobile capex has grown much faster than wireline capex.
Video isn’t the only driver of mobile, but it sure helps. A bunch of research on video viewing from varied sources agrees on a key point, which is that channelized TV viewing isn’t falling. Online video consumption largely supplements it, and the reason is that more and more online viewing takes place where channelized TV isn’t available—in the hand of the mobile user.
Mobile streaming is by far the fastest-growing user of bandwidth, and its importance to mobile users was demonstrated by T-Mobile’s decision to offer free streaming video as a competitive differentiator. As I suggested in yesterday’s blog, this is a reflection of the fact that a small increase in capex to support additional capacity would be easily justified if customer acquisition and retention costs (the largest opex component for mobile operators) could be reduced significantly.
One corollary to this point is that it then behooves the operators to insure that the capex increase associated with unfettered mobile streaming is small. How that might be done is a jumping-off point illustrating the complexity of the relationship between new technologies like SDN and NFV and real-world business issues for network operators.
Mobile networks’ video-carrying capacity is impacted by a number of things. The first is the RF signal, which has a native capacity shared by users within the cell. You can increase this either by making the radio access network (RAN) faster (4G is pretty good at supporting large numbers of video users and 5G would be better), by making cells smaller so fewer users share the capacity (which means making them more numerous to cover the geography), and by using WiFi offload where possible to create what’s essentially a new parallel RAN.
Back from the RAN is the backhaul. You can’t offer wireless video services without something to connect the cell sites (or WiFi sites) to video sources. In the modern world, this means running fiber. Given that per-fiber capacity is quite high, things like 5G that increase per-cell capacity make sense versus running a bunch of new glass to support more cells.
The combination of RAN and backhaul, and the high cost of customer acquisition and retention in the mobile space, is making the notion of the mobile virtual network operator (MVNO) more interesting. Giants like Amazon, Apple, and Google have either demonstrated MVNO interest or are rumored to be looking at it. Cable companies have admitted they plan to become MVNOs at least on a trial basis.
When Google talked about being an MVNO, I pointed out that there was no future in having a mobile industry with three or so players and a dozen resellers. All that happens in undifferentiated resale is that prices fall into the toilet. Low-margin mobile does none of our aspiring MVNO players any good, nor does it exploit their strengths. So we have to look at differentiated MVNO potential, and that’s where SDN and NFV come in.
Why have “virtual” in a name if you don’t virtualize anything? It seems pretty obvious that if a “real” infrastructure-based mobile operator fully virtualized their infrastructure they could create a kind of mix-and-match inventory of capabilities that MVNOs could exercise at will, mixing in their own unique differentiators. Comcast, for example, is at least considering being an MVNO and they have a strong content delivery capability already. Why not combine it with RAN from somebody else?
While some of this virtualizing would impact the RAN and backhaul, most of it would probably fall in the metro and CDN zone. The signaling and service intelligence of a mobile network resides there, inside IMS, EPC, and of course the CDN technology. Virtualization at the SDN level could let operators partition real mobile infrastructure better for virtualized partners, but it would also let operators reconfigure their mobile and content delivery architecture to match either short- or long-term shifts in user behavior and traffic patterns.
On the NFV side, mobile and CDN signaling/service elements could be deployed, but the value of NFV to these long-lived multi-tenant components of infrastructure depends on how much of NFV’s benefits are drawn from agility/operations efficiency. If all you do with NFV is deploy stuff, then something that deploys only once and then gets minimally sustained isn’t a poster-child app. But if we start to imagine feature differentiation of mobile services and the integration of a true IoT model (not the vapid “let’s-move-sensors-to-LTE” junk), we can see how the same operator who offered virtual IMS/EPC/CDN might offer hosting to VNFs that MVNOs supplied for service differentiation.
CDN elements and IMS customer control and signaling are hosted, whether on specialized appliances or servers. The hosting could evolve to a more dynamic model, as I’m suggesting above, and with that dynamism it could promote distribution of data centers more richly in at least major metro areas. That would then establish hosting at a reasonable scale and reduce the barrier to deploying other incremental NFV applications/services. Virtual CPE in any form other than edge-hosted probably depends on something like this pre-deployment of at-scale resource pools, and so do many other applications.
Many people think that mobile services and content delivery offer SDN and NFV opportunities, but there’s been precious little said about the specific opportunities that would arise or the specific way that SDN or NFV could address them. Absent that sort of detail, we end up with people saluting the mobile/content/SDN/NFV flag without any actual collateral to play in the game, much less to drive it.
This is one of the true battlegrounds for SDN/NFV, with battle lines that aren’t shaped by either technology but by the high-level reality of selling real services to real users. The union of Alcatel-Lucent and Nokia could create a true powerhouse in this area, a player who would then fight with Ericsson and Huawei for supremacy in the mobile/content space. That fight is one business/market force that could then create a rich opportunity for both SDN and NFV—and of course for the three vendors who are duking it out.