Network Function Virtualization (NFV) and Software-defined Networks (SDN):Priorities and Supplier...

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TECHNOLOGY BUSINESS RESEARCH, INC.

Network Function Virtualization:Where’s the Business Case?

Technology Business Research (TBR) Quarterly Webinar Series

Feb. 11, 2014

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2 TBR Quarterly Webinar Series | 2.11.14 | www.tbri.com | ©2014 Technology Business Research Inc.

Webinar Presenter

Michael Sullivan-TrainorExecutive Analyst, Networking and Mobility Practice

Email: [email protected]

Twitter: @mikest

mailto:[email protected]

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• NFV Hype Cycle

• NFV Investment Cycle

• Operator Expectations

• Use Cases

• NFV Initiatives

• Packaging Challenges

• Supplier Impact

• Business Case Requirements

• Virtualization of Home Environment

• Next Steps

• TBR NFV Dashboard

AgendaNetwork Function Virtualization: Where’s the Business Case?

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NFV: Compete with service agility

SOURCE: NFV GROUP WHITE PAPER

Network Function Virtualization: Where’s the Business Case?

Category Definition

Key Concept

Transforming the network from a large number of different elements with separate functionality to a collection of high-volume servers, storage elements, Ethernet switches and IT systems able to run applications from independent developers.

Required Carrier-grade reliability, scalability and security and the ability to automate operations across hundreds of virtual machines

Expectation Reduce capex while increasing operational efficiency and application/services agility

Standard Groups

ETSI sponsored NFV Industry Specification Group (members: AT&T, BT, CenturyLink, China Mobile, Colt, Deutsche Telekom, Orange, KDDI, NTT, Telecom Italia, Telefonica, Telstra, Verizon); now 100-plus members http://portal.etsi.org/NFV/NFV_List_members.asp

http://portal.etsi.org/NFV/NFV_List_members.asp

http://portal.etsi.org/NFV/NFV_List_members.asp

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NFV: What operators expect and what it will takeNetwork Function Virtualization: Where’s the Business Case?

Benefits Implications

Rapid service innovationDecrease service time to market

Transformation of end-to-end services infrastructure to software-based deployment

Improve operational efficiencyReduce opex in service deployment and operations

Implement common automation and operating procedures

Reduced power usage Reduce opex for energy

Migrate workloads, and power down unused hardware

Deploy best-of-breed, decoupled network elements from multiple playersIncrease vendor independence

Implement standardized open interfaces between network functions and their management entities

Improve capital efficiencyReduce capex for hardware

Reduce costs by eliminating dedicated hardware implementations

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Use Case Description

1. NFV IaaSInfrastructure as a Service

Computing, Storage and Network as a Service for end users

2. NFV SaaSVirtual Network Function as a Service

Software as a Service for end users

3. NFV PaaSVirtual Network Platform as a Services

Platform as a Service for end users

4. Virtual Network Forwarding NFV internetworking: defining the logical connectivity paths between virtual appliances

5. Virtualization of Mobile Core and IMS

Virtualization of Evolved Packet Core and IMS elements: MME, Gateways, CSCF, HSS

6. Virtualization of Mobile Base Station

Baseband radio processing using IT virtualization techniques for signal processing capacity aggregation and centralization

7. Virtualization of Home Environment

Replacing customer premise residential gateway and set-top boxes with virtual services in the network

8. Virtualization of CDNs Running content delivery network nodes as virtual appliances on operator infrastructure

9. Fixed Access Network Functions Virtualization

Applying virtualization to reduce the complexity of access nodes, links and network services

“As an industry we need to accelerate the journey toward NFV. There are 2 main parts: One, a wide array of best of breed ‘virtual network functions’ that currently run on purpose-built hardware, and two, an NFV cloud platform that’s optimized to run these functions at scale.” Axel Clauberg, VP IP and Fixed Access Architecture, Group CTO team, Deutsche Telekom AG

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Other candidates for network function virtualization

Solutions

OSS/BSS

Policy Control

Deep Packet Inspection

Session Border Controllers

Security appliances (firewalls, IDS/IPS, SSL VPNs)

Server load balancers

WAN acceleration


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NFV Initiative examples

AT&T Verizon Vodafone

NFV Initiative Domain 2.0 Supplier Program;NFV ETSI ISG Founder

NFV ETSI ISG Founder

NFV ISG Participant

Current status NFV POC NFV POC NFV interest

Purchase bias Looking for industry-standard solution

Looking for point solution to enhance internal work

Looking for industry-standard point solutions

Leading suppliers ALU, Ericsson, IBM, HP, Cisco

ALU, Ericsson, IBM, HP, Cisco

ALU, Ericsson, NSN, IBM, Cisco


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Network function virtualization supplier positionsCategory Solutions Partners

Alcatel-Lucent

• CloudBand provides a management platform for orchestrating and automating NFV platforms.• Opened NFV/cloud research facility in

Kfar Saba, Israel

CloudBand Ecosystem Program — community of SPs, developers and suppliers to accelerate NFV (13 members: Deutsche Telekom, Telefonica, Citrix, Intel, Vyatta, Radware, Red Hat, HP, Nuage Networks, Gigaspaces, StackIQ, Inktank and Nominum)

Cisco Open Network Environment, Quantum HCL Technologies, Leap Wireless

Ericsson Cloud System, Virtual Network System moving toward NFV platform

Joined OpenStack to contribute to development of solutions

HP Cloud Service Automation, Matrix, Aggregation Platform

Intel

IBM PureFlex, Virtual Core Mobile, Service Activator

Optus, Connectem

NSN • Liquid Net includes virtualized elements for radio networks, applications and management.• Liquid Applications are being trialed for

base station functions, IMS and TAS.

IBM, Intel, CD Networks,India-based service providers,SK Telecom


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Brave new world of solution packaging

Session-based licensing and third-party certification

Own Function

Own Platform

Own Hardware

Own Function

Own Platform

Third-party Hardware

Own Function

Third-party Platform


Systems Supplier Software Supplier ISV

Services Supplier — Consulting, Integration, Manage/Operate, Maintain

Service Provider Direction — Lower Cost via Standards

Virtual

Abstraction

Server

What’s your charging model for virtual instances of network functions?


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Benefits NFV Supplier ImpactDecrease service time to marketTransformation of end-to-end services infrastructure to software-based deployment

Professional and Managed Services• Consulting on NFV architecture• Design and integration of NFV

elements and interworking• Implementation and validation• Outsourcing and out-tasking of NFV

Reduce opex in service deployment and operationsImplement common automation and operating procedures Deployment and Maintenance Services

• Software installation lower revenuethan hardware-based rollout• Consolidated automated operations

requires less support servicesReduce opex for energyMigrate workloads, and power down unused hardware

Increase vendor independenceImplement standardized open interfaces between network functions and their management entitiesReduce capex for hardwareReduce costs by eliminating dedicated hardware implementations

Software Revenue• New versions of software• New management software

Hardware Revenue• Fewer servers & storage hardware• Rationalized network equipment


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Business Case Requirements: A Test of Faith

Costs• Increased software capex• Increased professional

services capex/opex

Benefits• Decreased hardware capex• Decreased deployment and

maintenance capex/opex• Decreased operational costs• Potential increased revenue from

faster provisioning• Potential increased revenue from

innovative service

Business Case Scorecard

Costs — Very Likely• Higher software capex• Higher professional services

capex/opex

Benefits• Decreased hardware capex: likely• Decreased deployment and

maintenance capex/opex: likely

Uncertain• Decreased operational costs • Revenue from faster provisioning• Revenue from innovative service


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Business Case: Virtualization of Home Environment

Costs• Increased software capex• Increased professional

services capex/opex

Benefits• Decreased RGW and STB costs• Decreased deployment and

maintenance capex/opex• Decreased operational costs• Updates and new home services

• Potential increased revenue from faster provisioning

• Potential increased revenue from innovative service


Business Case Scorecard

Costs — Very Likely• Higher software capex• Higher professional services

capex/opex

Benefits• Decreased hardware capex: likely• Decreased deployment and

maintenance capex/opex: likely

Potential• Decreased operational costs • Revenue from faster provisioning• Revenue from innovative service

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Next Steps

Operators move from POC to trials, testing technical issues and business case

Suppliers hone business case as well as product packaging

Most likely use cases to offer strong business cases will achieve deployment velocity


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NFV DashboardTBR Dashboard Portfolio

Tracking:

• Business case for service provider adoption

• Lead NFV services platforms

• Best practices around licensing policies

• First-mover examples


Brave new world of solution packaging

Session-based licensing and third-party certification

Own Function

Own Platform

Own Hardware

Own Function

Own Platform


Own Function

Third-party Platform


Systems Supplier Software Supplier ISV

Services Supplier — Consulting, Integration, Manage/Operate, Maintain

Service Provider Direction — Lower Cost via Standards

Virtual

Abstraction

Server

What’s your charging model for virtual instances of network functions?

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Questions?Q&A

Michael Sullivan-TrainorExecutive Analyst, Networking & Mobility Practice

Email: [email protected]: @mikest

James McIlroy Vice President of SalesEmail: [email protected]: 603.929.1166

Twitter: @TBRincSlideShare: www.slideshare.net/TBR_Market_InsightYouTube: www.youtube.com/user/TBRIChannel


https://twitter.com/TBRinc

https://twitter.com/TBRinc

http://www.slideshare.net/TBR_Market_Insight

http://www.youtube.com/user/TBRIChannel

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NMP Syndicated Research CoverageTelecom Vendors Operators Benchmarks

• Accenture Telecom & Mobility• Alcatel-Lucent• Cisco Systems• Ericsson• HP Telecom & Mobility• Huawei• IBM Telecom & Mobility• Juniper Networks• Nokia Solutions and Networks• Samsung Telecommunication

Systems• ZTE

• AT&T• Sprint• T-Mobile USA• Verizon

Enterprise Coverage:• AT&T Business Solutions• BT Global Services• Orange Business Services• Verizon Enterprise Solutions• Vodafone Enterprise Services

• Telecom Vendor Benchmarko Telecom Infrastructure Services

(TIS) Telecom Infrastructure Services

Benchmark Telecom Infrastructure Services

Margin Benchmark Telecom Infrastructure Services

Addressable Market Forecast Telecom Infrastructure Services

North America Addressable Market Forecast

• Enterprise Network Vendor Benchmarko Enterprise Networking

Addressable Market Forecasto Network Infrastructure Services

(NIS) Benchmark• U.S. & Canada Mobile Operator

Benchmark

Enterprise Networking Cable Providers(Reports include content on Ent. Networking)• Accenture Telecom & Mobility• Cisco Systems• HP Telecom & Mobility• Huawei• IBM Telecom & Mobility• Juniper Networks

• Comcast• Time Warner Cable

Internet Companies

• Google• Microsoft Telecom & Internet

TBR Networking & Mobility Practice Syndicated Coverage

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TECHNOLOGY BUSINESS RESEARCH, INC.

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Network Function Virtualization (NFV) and Software-defined Networks (SDN):Priorities and Supplier...

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Transcript of Network Function Virtualization (NFV) and Software-defined Networks (SDN):Priorities and Supplier...