Month: July 2017

According to a recent report from Deloitte, “deep fiber” is critical to support the evolution to 5G.  There’s truth in this view—I think it’s clear that fiber is critical to 5G success.  The questions are whether “deep fiber” is the kind of fiber that’s critical, whether fiber is a sufficient guarantee of 5G, and what might get both fiber and 5G to where they need to be.

The first of the questions is two-part—is the term correct and is fiber critical.  The first is easy to answer based on the report itself.  Deloitte departs from normal practice by saying that “deep” means “toward the edge” when normally it’s taken to mean “toward the core”.  If we substitute some terms here, we could paraphrase the report by saying that “the United States is not as well prepared to take full advantage of the potential [of 5G], lacking needed fiber infrastructure close to the end customers, at the network’s edge.  The second, I think, is also easy.

Anything that proposes to increase access bandwidth significantly is going to have to rely on fiber closer to the network edge.  One of the elements of 5G that operators tell me is most interesting to them is the notion that 5G could be used in wireline deployments as a kind of tail connection to fiber-to-the-node systems.  In that role, it would replace copper/DSL.  Whatever happens to 5G overall, I am hearing that this element is going to move forward.

With a credible high-performance tail connection, FTTN deployment becomes a lot more sensible, and that would of course drive additional fiber deployment.  However, fiber to the prem (FTTP, usually in passive-optical network or PON form) is arguably the logical strategy for deployment of consumer and business broadband to any area where CATV cable is not already in place.  Even in some CATV-equipped areas, FTTH/PON might be required for competitive reasons (or not, as we’ll see).  Thus, edge fiber doesn’t depend on 5G as a driver, though unquestionably it would benefit.

However, edge fiber at the edge is a necessary condition for 5G.  Is it a sufficient condition, meaning that nothing else matters?  Probably yes in the limited sense of 5G as a tail circuit for FTTN, but not for all the rest.  In fact, it’s not clear whether 5G is really the driver here or just radio tails to FTTN.  It’s the fact that operators associate that mission with 5G that makes it a 5G mission, not the technical requirements.  That’s why the rest of 5G isn’t pulled through by the FTTN tail mission, and why we still need broader 5G drivers for the rest.

If all this is true (which I think it is), then it’s really the need to deploy more edge bandwidth—mobile and wireline—that’s the driver for more fiber.  Is that the only driver?  I don’t think so.  At the same time as we see an increased need for edge bandwidth, we also see a growing need for the deployers of that bandwidth to monetize that which they are doing.  That’s where carrier cloud, edge computing, and process interconnection come along—all topics of recent blogs.

Access deployment is dominated by consumer broadband.  Consumer broadband is dominated by asymmetrical bandwidth needs—more upstream toward the user than in the other direction.  Process interconnection tends to be symmetrical in terms of its requirements, and because latency in a process connection impacts QoE broadly, it’s more important to avoid it.  I think process interconnection will be a more significant force in fiber edge deployment than consumer broadband, and certainly both will be more than enough to drive a lot of new fiber at the network’s edge or very near to it—in the process edge.

The main point of the Deloitte report is one of the main report headings: “The current wireline industry construct does not incent enough fiber deployment.”  There, they have a point.  I’ve blogged a lot about the declining profit-per-bit problem, which means there’s a problem with return on infrastructure investment.  Even if you don’t believe my arguments, it’s hard to argue with the fact that network equipment vendors (except price-leader Huawei) have been facing difficult quarters revenue-wise.

Could opex savings from infrastructure modernization help?  The report notes that operations expenses are typically five to six times capex; this aligns fairly well with my surveys that show that on the average operators are spending about 18 cents of every revenue dollar on opex, another 18 cents returned as profits, and the remainder as operations and administration.  They suggest that modernization of legacy TDM networks, which are expensive to operate, has a lot to do with that.  My surveys don’t bear this out; only about 30 cents of every revenue dollar are associated with “process opex” meaning the cost of network operations and network-related administrative costs, and only about four and a half cents are pure network operations.  A TDM-to-packet transformation would therefore not impact much of the total OAM&P costs at all.

I’m a believer in reducing opex, and if you looked at the total process opex pie (30 cents per revenue dollar) and could reduce it by about half (which operators say is credible) you’d almost equal the total elimination of capex in terms of bottom-line impact.  The problem is that most of the savings come from service-level automation, not from improving network technology.  As a fiber driver, I don’t think modernizing out of TDM cuts the mustard.

Regulatory policy may hold the answer, according to the report, and I agree at the high level but disagree on what policies might help.  The report talks about fairly esoteric measures like encouraging cross-service deployments.  In a related section, it proposes improving monetization by encouraging OTT partnerships or even joint ownership of OTTs.  I think the answer is a combination of those points.  If you want operators to deploy more fiber, you make it profitable to do so.  If you want to make it profitable, you wring out operations costs through service-layer lifecycle automation, and you eliminate barriers to Internet settlement for QoS and traffic handling.

I think there’s a lot of good stuff in the report, but I also think it misses a major truth.  Any large-scale change in network infrastructure is going to require large-scale benefits to justify.  That’s true of edge fiber and it’s just as true of 5G.  We are forever past the phase of networking where a technology change can be seen as self-justifying, meaning it’s the “next generation”.

Fiber at/near the edge is, I think, a given because there are plenty of things that are driving it, and those things in turn have clear benefits.  5G is still proving itself on a broad scale, and it’s likely that its fusion with FTTN is going to be essential in making it a success.

A story that starts with the statement that a technology is “entering a new phase” is always interesting.  It’s not always compelling, or even true, but it’s at least interesting.  In the case of Network Functions Virtualization (NFV) the story is interesting, and it’s even true.  It remains to be seen whether it’s compelling.

NFV was launched as a specification group, a form of an international standards process.  Within ETSI the NFV ISG has done some good stuff, but it started its life as a many-faceted balancing act and that’s limited its utility.  Think operators versus vendors.  Think “standards” versus “software”.  Think “schedule” versus “scope”.  I’ve blogged on these points in the past, so there’s no need to repeat the points now.  What matters is the “new phase”.

Which is open-source software.  NFV had launched a number of open-source initiatives from the ISG work, but what has generated the new phase is the merger of one of these (the Open-O initiative) with AT&T’s ECOMP.  ECOMP mingles the AT&T initiatives toward an open and vendor-independent infrastructure with some insights into SDN, NFV, and even OSS/BSS.  The result is a software platform that is designed to do most of the service lifecycle management automation that we have needed from the first and were not getting through the “normal” market processes.

ECOMP, it’s clear now, is intended to be not only what the acronym suggests (“Enhanced Control, Orchestration, Management & Policy”) but more what the title of the new merged (under the Linux Foundation) initiative suggests, an Open Network Automation Platform.  I like this name because it seizes on the real goals of openness and automation.

I also like AT&T’s focusing of its venture arm on building new stuff on top of ONAP, and AT&T’s confidence in the resulting ecosystem.  In an article by Carol Wilson in Light Reading, Igal Elbaz, VP of Ecosystem and Innovation for AT&T Services says, “We believe [ONAP] is going to be the network operating system for the majority of the network operators out there.  If you build anything on top of our network from a services perspective, obviously you want to build on top of ONAP. But many operators are adopting all of a sudden this solution so you can create a ubiquitous solution that can touch a large number of customers and end users around the world.”

It’s that last notion that catapults NFV into its new age.  Some network operators, through support for open-source initiatives, have defined the glue that holds future network infrastructure and future services together.  Some of this involves virtual functions; more probably will involve some form of software-defined networking.  All of it could totally change the dynamic of both SDN and NFV, by creating an open model for the future network.  If ONAP can create it, of course.

The comment by AT&T’s Elbaz raises the most obvious question, which is that of general adoption of ONAP by network operators.  There is certainly widespread interest in ONAP; of the 54 operators I know to have active transformation projects underway, ONAP is considered a “candidate” for use by 25 off them.  That’s not Elbaz’s majority of operators, but it’s a darn good start.  I think we can assume that ONAP can reach the more-than-half goal, and likely surpass it.  It might well garner two-thirds to three-quarters of operators, in my view.

A related question is vendor support.  Obviously if a majority of network operators adopted ONAP, vendors would fall into line even if they were in tears as they stood there, which many might well be.  However, the only alternative to supporting ONAP would be rolling your own total service automation solution, which vendors have obviously not been linking up to do since NFV came along.  Would they change their tune now, with a competing open-source solution from and accepted by operators?  I don’t think so, and so I think that once ONAP really gets where it needs to be, it kills off not only other vendor options but any competing open strategies as well.

Where does ONAP need to get to, though?  I think the best answer to that is “where Google already is with their Google Cloud Platform”.  The good news for the ONAP folks is that Google has been totally open about GCP details, and has open-sourced much or even most of the key pieces.  The bad news is that GCP is a very different take on the network of the future, a take that first and foremost is not what launched ECOMP and ONAP, or even what launched NFV.  It may be very challenging to fit ONAP into a GCP model now.  Particularly given that GCP’s founding principle is that networks are just the plumbing that can mess up the good stuff.

Google’s network, as I’ve noted before, was designed to connect processes that are in turn composed to create experiences/applications.  Operators today are struggling to make business sense of pushing bits between endpoints in an age of declining revenue per bit.  Google never saw that as a business.  In fact, Google’s approach to “virtual private clouds” is to pull more and more cloud traffic onto Google’s network, to take even the traffic that’s today associated with inter-cloud connectivity off the Internet or an external VPN.  You could make a strong case for the notion that Google views public networking as nothing more than the access on-ramp that gets you to the closest Google peering point.

Google’s relationship with the Internet is something like this; everything Google does rides on Google’s network and is delivered to a peering point near the user.  GCP carries this model to cloud computing services.  Google also takes a lot of time managing the address spaces of cloud services and its own features.  User data planes are independent SDN networks, each having its own public (RFC 1918) address space.  Processes can also be associated with public IP addresses if they have to be exposed to interconnection.

Nothing of this sort is visible in the ECOMP/ONAP material, but it’s also true that nothing in the material would preclude following the model.  The big question is whether the bias of the ECOMP/ONAP model or architecture has framed the software in an inefficient way.  Google has planned everything around process hosting.  If process hosting is the way of the future, then NFV has to be done that way too.

The SDN and NFV initiatives started off as traditional standards-like processes.  It’s understandable that these kinds of activities would then not reflect the insight that software architects would bring—and did bring to Google, IMHO.  Now, with ONAP, we have another pathway to SDN and NFV, a path that takes us through software rather than through standards.  That doesn’t guarantee that we’ll see a successful implementation, but it does raise the prospects considerably.

We also have to look ahead to 5G, which as a traditional standards process has made the same sort of bottom-up mistakes that were made by those processes in the past.  We have a lot of statements about the symbiosis between 5G and SDN and NFV.  I’ve read through the work on 5G so far and while I can see how SDN or NFV might be used, I don’t see clear service opportunities or infrastructure efficiency benefits that are linked to any of those applications.  The big question might turn out to be whether AT&T or the others involved in ONAP can create a credible link between their work and credible 5G drivers.  Same with IoT.

A software revolution in networking is clearly indicated.  Nothing we know about future network services or infrastructure evolution harkens back to device connections and bit-pushing for differentiation.  We may be on the path for that software revolution—finally.  That would be good news if true, and it would be a disaster for the industry if it’s not.

If event-handling and process hosting are the way of the near future, then (as I suggested last week) we would likely shift a lot of hosting and software development off traditional server platforms.  There are technical considerations here, of course (and I noted the key ones last week), but the primary issue is financial.

Event processing depends on two dimensions of event characteristics.  One is how often the event happens, and the second is how “valuable” in a commercial sense the event is.  Obviously both these characteristics are graded and not polar, but it’s helpful to think of the extremes, which in this case would mean event frequencies ranging from infrequent to very often, and event values ranging from negligible to significant.  The four combinations present great opportunities on one extreme, and nothing but cost and risk on the other.

Let’s start by looking at something we can dismiss quickly.  Low-value events that rarely happen probably don’t justify any event processing at all.  “An airplane flew across the face of the moon, relative to an observer in Iceland” might be one.  If you want to get IoT funding for that one, good luck!

Now let’s search for some relevant insight, starting with the most extreme on the negative side, very frequent events of little value.  A good example would be “cars passing an intersection”.  OK, you probably can think of things that could be done with this information, but if you think about a place like New York City and the number of cars that pass each of the intersections in the course of a single busy hour, and you have a formula for minimal ROI.

Where we have this situation, the goal is to prevent the “event” from ever getting out of local processing in discrete event form.  This would mean two things; that you want to use a cheap local technology to collect the events, and that you want to “summarize” the events in some way to reduce their frequency.  Cars per minute?  In a busy intersection that would probably reduce the events by several orders of magnitude.

Logically, the way to do this would be to have “agents” associated with groups of event sources.  The agents would use some cheap technology to collect events, and then a second cheap technology to summarize them in some way.  The agents would generate summary events (“Car Count for Intersection 5^th and 42^nd, 10:40 AM”).  If we needed only summaries based on time, you could do something like this with a custom chip, at a very low cost.

Something else would consume these summary events, of course, and since there are fewer such events and they’d not likely require very short response times, you could place these other processes deeper in the network.  In addition, it’s likely that the summary processes would be doing some kind of analytics, changing the nature of the process from strictly event-handling to something more “transactional”.  Keep that in mind!

At the other extreme?  That’s easy too—think of system failure or critical condition alerts.  There’s water in a tunnel, there’s smoke in a warehouse.  These happen rarely (hopefully) but when they do they could represent human lives and millions of dollars.  Not only that, each of these events (largely because of their value) could logically be seen as having a wide scope of interest and potential to trigger a lot of other processes.  Fire in a warehouse?  You might have to dispatch engines, but also activate an emergency plan for traffic lights, extending far outside the area of the fire or the path of the engines, to insure emergency vehicles associated with other incidents could still move.

This event type might well create what could be called a “tree” or “cascade”, the opposite of the aggregation that happened in our car-and-intersection example.    We’d want to provide a multicast mechanism, or publish-and-subscribe, to distribute this kind of event.  Each of the secondary recipients (after our primary processing) would then handle the event in a way appropriate to their interests.

The examples of dispatching engines or implementing an emergency light plan show that these events might well need fast response times, but there are other cascaded processes that could be more tolerant of delay.  I think it’s likely that many processes will require edge hosting, while others could tolerate deeper hosting.  All, however, are likely to be local in scope, since an emergency condition can’t be handled easily at a distance.  This high-value, limited-frequency stuff is thus a primary edge driver.

Now the in-between.  High-value events that happen more frequently would likely be traditional commercial transactions.  Think ATMs, mobile purchases, bank tellers, store register systems, automatic toll collection, and so forth.  Another class of high-value events would be contextual events associated with a social or location service, including and perhaps especially advertising.

Commercial transactions, huh?  That’s a theme common to the high-value-low-frequency stuff we covered earlier.  I think we can safely say that event-handling in general will have two distinct pieces—a front-end part where we’re either summarizing or cascading events and applying limited response processing to highly time-sensitive conditions, and a longer-cycle transactional back-end.

The cloud computing players like Amazon, Google, and Microsoft all see this combination-structure for event software, and all in fact show it clearly in some applications.  The front-end parts of the processes are “serverless” meaning that they’re designed to be spawned at need where needed, rather than assigned to a specific place.  That requirement, and the requirement that they be spawned quickly to be responsive, means that you have to avoid complicated new connection structures, access to distant resources, etc.

All of this shows that the heavy lifting on edge computing would have to be handled by the relatively valuable and infrequent events, and secondarily by perhaps expanding the traditional notion of “commercial” transactions to include social/location/advertising services.  It’s much harder to deploy and connect edge resources based on aggregations of low-value high-frequency stuff because you’d probably have to find a lot of applications and users to justify the deployment, and it’s hard to see how that happens without anything deployed.

It also shows that the cloud computing players like the three I already named have an advantage over the telcos and cablecos, even though the latter two have more edge-located real estate to leverage.  The software structure of event-handling is well-known to those cloud guys.  Google, at least, has explicitly evolved its own network to be efficient at process linking.  Amazon, of course, is addressing its own limited edge asset position through Greengrass, which lets users host event processes outside of (forward of) the cloud entirely.  Knowing what to do, not just where to do it, could be the deciding factor in the cloud.

Operators in their part have a tendency to see software the way they see devices.  If you look at SDN or (in particular) NFV design, you see the kind of monolithic boxes lined with APIs that are the exact opposite of the design for optimum event-handling systems.  Arguably a big reason for this is that operators tend to think of software elements that replace boxes—virtual functions replace physical functions.  But if the future is things like IoT, then it’s about events not data flows, and that’s where the operators need to do some thinking outside the box.

If fog or edge computing is the future, then what kind of future is it?  We have a tendency to think of distributed compute power or cloud computing as being a form of traditional computing, based on traditional hardware and software.  Is that the case?  If not, what model or models might really emerge?

The “edge of the future” will likely depend on the balance of a couple of forces.  One is the early driver force, the thing that will likely put the first mass of edge computing nodes into place.  The other is the shape of the long-term opportunity, meaning the application mix that will represent the future.  I’ve looked at the drivers of carrier cloud, and blogged about some aspects of them and their combined impact on deployment, and I propose to use some of the data to frame these forces and look at how the likely carrier cloud evolution really does shape the edge.

There are six drivers to carrier cloud according to my surveys of operators.  We have NFV/vCPE, personalization of advertising and video, 5G and mobile, network operator cloud services, contextual services, and IoT.  One of the five—network operator cloud services—could actually be expected to mandate conventional server technology.  Another, NFV/vCPE, doesn’t seem to favor any single platform option, and the remainder have specific architecture goals that current servers might not fit optimally.

NFV/vCPE is about hosting what’s largely security-and-VPN-related elements of traditional network appliances, and the software would presumably come from the providers of those kinds of devices.  An appliance or device uses what’s often called “embedded-control” software, and it usually runs on a hardware platform that doesn’t have many of the features of general-purpose computing.  In fact, the CPU chips usually put into servers would be overkill.

OK, but the problem is that diversity.  No appliance vendor will port to the architecture of a competitor, so the multiplicity of players could well foster a movement to pick a neutral platform.  Since hosting network functions on general-purpose computers was already being done, the logical platform would be the standard x86 server architecture, and perhaps a Linux distro.

Personalized advertising and video is a harder driver to assess in platform terms, in no small part because cable companies, telcos in the streaming business, and OTT streaming providers have their own “set-top-box-like” platform, and ISPs have CDNs.  Currently, both STB and CDN applications tend to run on servers or at least on something very server-like.  If the personalization and socialization of video (which is the functional driver of change in this space) doesn’t change the technical requirements significantly, then we could expect this driver to promote traditional server architectures too.

It might change, of course.  Personalization can be visualized as a refinement of current video selection practices, practices that are outside the network content delivery process.  Socialization, on the other hand, relies not on individual selection but on collective, even collaborative, behavior.  That shifts the focus toward event-driven processing since each of the “social elements” in video socialization (the people) are asynchronous with regard to each other until they collect to make a decision on viewing or make a recommendation to support such a decision.  Current video content delivery is a very web-server-like process, but social event handling is a new problem to solve.

Advertising and ad delivery is similar, and the technology is also similar.  A URL representing a place for an add will invoke a process that links the page containing it with a specific content element, based on a bunch of information known about the user.  This isn’t far from delivering a video cache point address based on a bunch of information about the player and the network.  Refining the process part of this might do little to change the technology requirements from web server to something else, but again there’s the issue of socialization.  How could we believe that the current process of targeting users won’t evolve to the process of targeting symbiotic communities of users?  If friends are an important part of marketing, then could marketing to friends justify collective delivery of ads?  Could we even promote “ad ecosystems” that would let one product type benefit from group acceptance of another?

Event-driven social processing in advertising and content would reinforce the fact that both the contextualization and IoT trends are explicitly event-centric in their requirements.  In fact, you could argue that all of these drivers are linked in terms of their dependence on events, and also in likely optimum implementation strategies.  Sensible markets might therefore consider them a single driver, a single trend that acts to shift the edge further from traditional compute models than anything else does.

Contextualization and IoT are related in other ways.  “Contextualization” to me means the introduction of the perceptive framework that surrounds us all into the way that we manage service delivery.  We are inherently contextual beings—we use context to interpret things, including questions others ask us.  If context is our subjective perceptive framework, then IoT could well be the objective resource we use to detect it.  Where we are, what we see and hear, and even a bit of what we feel can be obtained via IoT, and contextualization and IoT are obviously event-driven.

What we’re left with is 5G and mobile, and that’s not a surprise because it’s perhaps the most different of all the drivers.  5G is not the same kind of demand driver the others are; it’s a kind of “belief driver.”  If network operators believe that mobile service evolution is their primary capex driver for the future, and if 5G articulates the direction they expect mobile service evolution to take, then there will be momentum generated even if operator beliefs about 5G are incorrect…and some are.

5G is a curious blend of the old and the new.  The notion that major advances in network services have to be supported by massive initiatives that “standardize” the future is definitely an old concept, and at some levels I think it’s been clearly disproved by events.  On the other hand, 5G is a vehicle for the introduction of technical responses to currently visible trends.  In many ways, it’s a carrier for the transmission of ideas into realization that’s capable of moving ahead of tangible benefits.  If 5G “promotes” something that another of our drivers might later actually justify, then 5G could make things happen faster and at a larger scale.

The sum of all these parts seems to lack conviction at this point.  I see the future of the edge as depending on the pace at which event-driven processing is adopted, which is the sum of the personalization and contextualization applications.  If we see rapid adoption, then I think we’ll see edge computing take on a separate hardware identity, less likely to be dependent on the x86 model.  If not, then lack of a convincing direction will probably take deployment down a line of least resistance, which would be the current server platform architecture.

My carrier cloud model says that advertising and video personalization will drive the carrier cloud through 2020, and that 5G will then come along.  From an edge-platform-architecture perspective, neither of the early drivers seems to create a specific architecture for the edge, which would seem to promote the default.  That’s great for Intel and also likely great for players like Dell and HPE, but it’s a threat to other chip vendors and those who would like to see the edge be a truly different kind of computing.

I think it could still be.  Carrier cloud may not be committed to an event-driven edge yet, but it seems like the public cloud providers are.  Amazon, Google, and Microsoft have all launched edge computing models, and though all are still based on traditional servers, Amazon’s Greengrass shows that event edges could be simpler, different.  These three may again have to show the carriers where the action is.

Wall Street has been framing Cisco’s recent technology announcements as less technology than business.  The thesis is that Cisco sees the future as being revenues from services and a subscription model, rather than from hardware.  This, in response to industry efforts to create commodity hardware platforms and in the growing tendency of buyers to keep their gear longer, slowing revenue from refresh cycles.

I’ve blogged before about Cisco’s “intent modeling” initiative, based largely on policies.  I don’t intend to reprise the technical issues here, but rather to look at the principle question the Street is raising, which is whether a service-and-subscription model can lift Cisco or any other networking company out of the current doldrums.

We have to start with what got us into the current mess.  Commodity hardware, of course.  Operators and enterprises continue to struggle to justify more network spending when there are few or no new benefits to justify it.  That struggle manifests in putting discount pressure on vendors, switching to price leaders (Huawei, notably) and delaying hardware upgrades.

There is no question that software subscription and services are a viable response to commodity hardware, providing you can meet two requirements.  First, your new subscription software can’t accelerate the replacement of the equipment you’re selling.  That would accept profit and company shrinkage as inevitable.  Second, the revenue gains from success in subscription software and services have to be significant; enough to make a difference in the bottom line.

The response to the first challenge is obvious; you target somewhere other than the data plane.  White boxes, hosted switch/router instances, SDN, and even much of NFV are valuable in large degree because they reduce capital spending on connectivity and network features.  You could avoid that by presuming that the current data plane isn’t dramatically changed.

Which brings us to the second requirement.  The challenge for a company that wants to make money on subscriptions and services is that it’s hard to see how either builds a ginormous revenue opportunity.  Is policy control of network behavior as valuable, or more valuable, than networks themselves?  If not, then even if equipment vendors were willing to risk their hardware business, any significant drop in hardware sales would likely swamp the opportunity in services and subscriptions.

What has proved tricky in framing a subscription-and-services model is creating truly credible and independent value above the data plane.  It’s ironic to me that the formula for achieving that was introduced with SDN and NFV, and it wasn’t developed (by the standards people or vendors) as specs evolved.

Orchestration, as NFV pioneered the concept, is the creation of service features through model-driven deployment.  While NFV presumed that the features were to be hosted replacements for traditional network devices, most in the NFV ISG quickly realized that it would be nearly impossible to attain any credible operations agility or efficiency if you couldn’t control legacy elements as well.

If you took network and service features as they are implemented today, and enveloped them in an “intent model” that abstracted their functional capabilities and interfaces from the implementation part, you could apply those models to services today, with the infrastructure we already have deployed.  Service lifecycle management and its automation depends on effective modeling, and if you have that the service agility and operations efficiency benefits are largely achieved without further infrastructure change.

This being the case, we can say that service lifecycle automation is that above-the-data-plane layer where opportunities for subscription and services arise.  We can say that the application of the management and orchestration principles of NFV in particular, to current device-driven networks, could generate enough benefit to create a subscription software and services business.

How much benefit?  Even in 2019 we could generate almost 7 cents per revenue dollar of process opex reduction, which is a 25% savings.  By 2025 the number would rise to 13 cents per revenue dollar, a savings of almost 50%, and by 2030 the opex savings associated with service lifecycle automation could nearly match total capex.  And, of course, this doesn’t consider the benefits in service agility that lifecycle automation could bring.

This total-service-lifecycle model is separate from the data plane, and it generates significant incremental benefits.  The ROI on it, in fact is at least forty times that of infrastructure transformation, and infrastructure transformation isn’t what network equipment vendors are really looking for.  If ever there was a (seeming) match made in heaven, this would appear to be it.  Which is why it’s so surprising that everyone dropped the ball on it…so far.  Are we seeing both Wall Street attitude and vendor response combining to suddenly accept this old paradigm?  Is it too late?

To the first question, whether a shift to accepting the “old” paradigm of opex-driven intent modeling of legacy elements is happening too late, the answer is both yes and no.  Certainly, the benefits I’ve cited remain to be tapped, and so the potential for a vendor is still there.  However, AT&T took a giant step with ECOMP, framing orchestration in the very kind of broad and universal context that’s required to reap those benefits.  Now, in the Linux Foundation’s merger of ECOMP and Open-O into ONAP, we have an activity that’s driving an open realization of the architecture.

This is where stuff gets complicated.  Nobody ever accused any consensus body of lightning response.  If ECOMP recognized all the issues and framed all the benefit-to-feature connections correctly, it would still have to work its way through the inevitable political process of securing support in the Foundation for the implementation.  They have not recognized the issues nor framed all the benefit/feature links, and the consensus process may mean it will take them longer.  That could mean that a lively and aggressive vendor could jump in and simply do the right thing immediately.

Which would then give the open-source communities in general a nice target to shoot at.  Competition firms up the old spec, as most vendors know.  There would be a window in which an aggressive vendor could reap enormous rewards from having a total-service-lifecycle story, but it would be only a window.  While true persistent vendor dominance has always been rare, it has become especially so as buyers recognize the lock-in goal and work against it.  Add a “free” software solution hanging over the picture and you can see why vendor management might take a whiff at the opportunity to get in on the total-service-lifecycle story.

This strategic confusion could be at the heart of Cisco’s own positioning shift.  They have to tell the Street something, or they could end up getting negative outlooks from analyst firms.  By focusing on their own business model change without getting too detailed about just where all the future revenue is going to come from, they can dabble in fairly tactical stuff and (they hope) save a seat for themselves at the total-service-lifecycle table.  That the tactical approach is also less likely to hasten the commoditization of network devices is an added benefit.

The problem with this lovely approach is that there are two classes of vendors who don’t have the same constraints as network equipment giants like Cisco do.  The first are the server vendors, who have an opportunity to cash in on any transformation from appliance/device hosting of features to server hosting.  The second are the wireless and optical players, who have a potentially enormous play in the future network because you can’t push a virtual bit.

If either of these classes of vendors take their own aggressive shot at the subscription-and-services space through total service lifecycle automation, they could get a major jump on Cisco and other network vendors who hang back.  So far that hasn’t been happening because all vendors seem reluctant to undertake the task of positioning a broad strategic story with buyers.  But…it could.

So we have two paths that could lead to a dead end in the subscription and services revenue transformation story for network vendors.  One is the path where open-source solutions advance enough to erode or eliminate the opportunity, and the other is the path where server/fiber competitors use their immunity from displacement risk to accelerate transformation and cut hardware revenues further and faster than subscription and services can restore.

It appears that vendor business model issues are going to kill off the “stay the course” option for networking, whether or not we accept that some transformational technology will also be at work.  That may be the most important point.  If the Street is right, then hardware (other than optical hardware) isn’t the business to be in any longer, and for networking that is an enormous shift.  It will be interesting to see how quickly the changes come, and who they favor.