NFV, as I’ve said before in blogs, is a combination of three things—the MANO platform that orchestrates and runs services, the NFV Infrastructure on which stuff is run/hosted, and the VNFs that provide the functionality. You need all of them to have “NFV” and it’s not always clear just where any of them will come from, what exactly will be provided, or what the price will be. Uncertainty is an enemy of investment, so that could inhibit NFV deployment.
VNFs have been a particular problem. Many of the network functions that are targets for early virtualization are currently offered as appliances, and the vendors of these appliances aren’t anxious to trash their own revenues and profits to help the operators save money. One issue that’s come up already is the fact that many VNF providers want to adopt a “capital license” model for distribution. This would mean that the provider pays for a license up front, much like they pay for an appliance. It’s easy to see how this suits a vendor.
From the perspective of the network operator, the problem with this is that it’s dangerously close to being benefit-neutral and at the same time risk-generating. The VNF licensing charges, according to at least some operators, are close to the price of the box the VNF replaces; certainly the cost of the license and the servers needed for hosting are very close. This, at a time when it’s not certain just how much it will cost to operationalize VNFs, how much they might impact customer SLAs, or even how efficient the hosted resource pool will be.
Ciena has a proposed solution for operators in its Agility Matrix, a kind of combination of VNF platform and partnership program. VNF providers put their offerings in a catalog which becomes the foundation for the creation of NFV services. The VNFs are orchestrated into services when ordered, and the usage of the VNFs is metered to establish charges paid by the operator. What this does is create what Ciena calls a “pay as you earn” model, eliminating VNF licensing fees.
There is no question that Agility Matrix addresses a problem, which is the combination of “first risk” and “first cost” that accompanies any new service. The question is whether operators will find this approach compelling, not so much in the short term (all that “first” stuff) but in the longer term. That may be complicated.
The first point is that Ciena doesn’t propose to host the VNFs themselves, but to use carrier resources to host and connect. NFVI, in short, is still the operator’s, so the operator will still have to deploy resources to offer services in those “first” days. That means that some cost and risk are not going to be displaced by Agility Matrix. However, most operators would probably run screaming from a vendor proposal to host VNFs—to provide what would be essentially a “SaaS” framework of VNFs for operators to integrate—because operators would fear the higher cost of hosting and the commitment to a third party.
The second risk is the utility of having VNF choices. Obviously not all VNFs will be in the catalog. It’s also true that many operators already know who they want their VNF partners to be and are already in relationships with them, either for CPE or in some cases for hosted elements. The biggest value of Agility Matrix comes when the operator is flexible enough to grab functionality from the catalog for most of their VNF needs. If the VNF they want is already available to them, or isn’t in the catalog, then they have to go outside Agility Matrix for their solution, and every such step makes the concept less useful.
The third point is that network operators want an exit strategy from these pay-as-you-go systems since they perceive that in most cases their risk will decline as their customer volume mounts, and their own leverage with VNF vendors to negotiate license charges will increase. While the fact that Ciena’s not trying to take over hosting, only licensing, makes things easier, Agility Matrix doesn’t so far present an option to shift to a licensed approach down the line. The operator could work through the process of taking VNF control in-house on their own (there are no contractual lock-ins), but it might create service disruptions and would likely involve a change in service-building and management. Perpetual pay-as-you-go is a risk; Alcatel-Lucent had an Open API Service designed to build a cross-provider development framework by charging a small usage fee, and it wasn’t successful.
The final point is the onboarding process. What Ciena is offering is a VNF framework to be bound into an operator’s NFV deployment platform and NFVI. It’s certainly true that Ciena can offer a single approach to onboarding and even to management—which Agility Matrix promises through its own Director tool. We don’t at this point know how many different MANO platforms there will be and what the onboarding requirements for each will look like. Yes, Ciena’s Director element provides ETSI MANO functionality, but I’ve questioned whether this is sufficient for orchestration. If it’s not, then it’s not clear how the additional features (primarily related to management, IMHO) would be integrated. And even if Director is solid, additional MANO/NFV tools may be pulled into the operator because some VNFs from network vendors may not be available in any way except by license to the operator and deployment and management by the network vendor’s own platform. For Ciena and the operator alike, this could generate some complexity in onboarding.
The final point is what I’ll call “brand connection.” Who do you think of when you think of an NFV infrastructure? Probably not Ciena. Network operators in my spring survey didn’t even mention them as a candidate. That doesn’t mean that Ciena couldn’t be a credible supplier of NFV platforms and VNF catalogs, but it does mean that a lot of other vendors are going to have their opportunity to push their wares as well, many before Ciena gets to bat.
The reason Ciena isn’t a strong brand in the NFV platform space is that it’s not clear what role Ciena’s own gear plays in the NFV world. There is a linkage between the Agility Matrix and Ciena’s network equipment, but I think the link could be stronger and more compelling if Ciena outlined just how you’d build NFV based largely on agile optics and electrical grooming. As I said in my Monday blog, vendors like Ciena are potentially in the cat-bird seat with respect to controlling the outcome of network evolution. They could exploit this position with a good NFV approach, but such an approach would have to be more along the line of program plus product. Operators should be able to use a pay-as-you-earn program as an on-ramp where they need it.
Agility Matrix is a useful concept. Tier Two and Three operators might find it especially compelling and might even want Ciena to partner with some cloud providers to host stuff. Even Tier Ones would see this as a way to control early cost and risk. However, right now operators see NFV as the framework for all their future higher-level services. They want their NFV provider to be helpful but not intrusive, and I think Ciena could do more to fulfill these two attributes. They should try, because the basic idea is sound.