Today’s Telecom networks are built and run on largely proprietary hardware appliances. They are architected to ensure fail-over on standards largely influenced by the Network Equipment Providers (NEPs), unsurprisingly, these standards have meant the accepted practice of purchasing and maintaining twice the required devices across all of the Telecom Network Sites and in the Enterprise space, these standard accepted practices have been followed when they architect Networks for their internal and external communications platforms.
This is a Huge Business, most analyst reports suggest the NEP supply to Telecom approximately $100B in Network devices each year. This is having a catastrophic affect on the increasing cost of housing, providing power and cooling, maintaining and operating this massive growing estate of proprietary devices.
Software Based Networking offers the idea or the potential to massively decrease the Capital Expenditure (CAPEX) and Operating Expense (OPEX) of networks, some early estimates are that the traditional costs could drop by as much as 50%, more of that later.
In the Mobile Carrier market, some markets, such as those in Southern Europe, are seeing reduction in the Average Revenue Per User (ARPU). It doesn’t take a rocket scientist to calculate that if your costs are continuing to increase and your revenue is stagnant or worse, then your market valuation will come under increased pressure, even some companies may start to choose between providing a high quality service, or reduction in their margins.
Virtualisation of the NEP devices is an inevitable outcome, this is basically explained as the extraction of the software element from the NEP proprietary device and the management of this software on a standard server platform.
This is effectively a re-run of the IT industry about 9 years ago, when they realized they had huge fleets of servers housing an application and only utilising less than 10% of their sunken investment in the supporting infrastructure. Effectively, they were paying 10% of the servers cost to maintain it every year, and using less than 10% of the machine they had bought. This led to the huge proliferation of virtualization in the x.86 server marketplace and the phenomenal growth of VMware.
While the Network presents a similar issue in terms of costs and escalating OPEX, the challenges are completely different.
Networks are expected to be available all the time, carriers have trained their mobile customers to expect a rich voice experience, mobile data, email and are increasingly educating an ever demanding customer base. This is different from an IT department that provides an enterprise their IT needs based on best efforts and prioritises services such as web sites and billing, over other less important applications.
Software Based Networking falls into two categories, Network Functional Virtualisation (NFV) and Software Defined Networking (SDN).
Telecoms and Enterprise networks contain an increasing variety of proprietary appliances. To launch a new network service often requires a new network appliance and the underlying resources of space, power, cooling, etc. often mean and idea cannot become a trial or move to production as a customer facing service without huge costs and significant time to market constraints.
Equally, the constant addition of more appliances adds to the existing complexity of integrating and operating the existing and new appliances in the network. Moreover, NEPs design their Hardware Appliances to reach end of life rapidly and force the Telecom company or Enterprise to re-invest in both new appliances, but also, the huge project management costs to deliver a replacement hardware infrastructure.
Not only does this rapid depreciation mean reduced return on investment, but it constrains innovation and deployment of new revenue producing services.
NFV aims to address these problems by evolving standard IT virtualization technology to consolidate many NEP equipment types onto industry standard high volume servers, switches and storage. It involves implementing network functions in software that can run on a range of industry standard server hardware, and that can be moved to a new site easily or transferred to various location in the network as and when required, without the need to acquire and install new infrastructure.
This technological development presents significant benefits for network operators and their customers:
- Huge reduction in CAPEX and OPEX through reduced equipment costs, reduced real estate requirements and lower power consumption
- Reduced time to market for deployment of new services
- Improved Return on Investment (ROI) for new services
- Greater flexibility to scale up, scale down or to evolve services
- Horizontal Platforms provide choice and flexibility of the underlying hardware infrastructure, therefore commoditizing the expensive supplier marketplace
- Opportunity to trial, deploy and scale new innovative services at much lower risk and cost
Some early stage indications from some of the Telecom’s companies are that NFV alone may impact their OPEX positively by some 10% to 15% of their current cost base, this is garnering the interest of not only their Chief Network Officers, but also their CEOs and CFOs.
Software Defined Networking (SDN) is a new approach to designing, building and managing networks. The basic concept is that SDN separates the network’s control plane (the smarts) and the packet forwarding plane (the grunt) to make it easier to increase efficiency and simplicity.
The controller acts as the intelligence, providing an abstract centralized view of the overall network. Through the Controller, network administrators can quickly and simply make decisions and push out instructions on how the underlying systems (switches & routers) of the forwarding plane will handle network traffic. The most common protocol used in SDN networks to facilitate the communication between the controller and the switches is currently OpenFlow.
An SDN environment also uses open, application programmatic interfaces (APIs) to support all the services and applications running over the network. These APIs facilitate innovation and enable efficient service orchestration and automation. As a result, SDN enables a network administrator to shape and deploy services to address changing business needs, without having to touch the individual switch or router in the forwarding plane.