SDN and NFV are playing critical role in the new wave of innovations happening in the areas of telecommunications, data centre and enterprise networking, leading to several new opportunities for Telcos
By Mohd Ujaley
Telecom carriers across the globe are beginning to replace their network hardware with software, a process known as software defined networking (SDN). The movement to software versions of traditional hardware, such as routers and switches, lead to lower costs and significant improvement in operational efficiency. Recently Verizon Communications announced that it was moving to software-centric network architecture for cutting costs and providing a host of new features to its customers.
With SDN the companies are able to separate the control, data, and management planes of current networks and implement them in software. With such an arrangement in place, network administrators can quickly adjust to the changing conditions and optimise their operation. Such changes can be done from a single computer without having to reprogram individual switches or other pieces of hardware.
On the other hand, Network Functions Virtualisation (NFV) can be seen as a sibling of SDN. It basically allows you to leverage IT virtualization technology for virtualising the entire classes of network node functions into building blocks that may be put together to create communication services.
Many companies are now leaning towards SDN and NFV to achieve agility, simplicity and scale.
Rising Acceptance
It is safe to assume that currently SDN and NFV are in their infancy, there has not been any large-scale deployment anywhere in the world. However, many companies have started doing proof of concept (PoC) and there is possibility that the actual deployment of SDN and NFV may happen soon. In India, the enterprises are showing lot of interest in SDN and NFV, and these technologies may soon achieve a critical mass. According to Gartner, the Indian server, storage and networking market stands at approximately Rs 153 billion. Of this, 5-10% is SDN centric.
“The telecom operators are always looking to deploy innovative technologies that can lower the cost of operations and improve revenues. They want to speed-up the rollout of their new services to attract new customers. The best way of achieving these goals is the path of SDN and NFV,” says Nishant Batra, vice president and head of engagement practice at Ericsson India.
Batra further explains that the growth of 3G and ongoing launch of 4G telephony in the country will lead to increase in adoption of SDN and NFV. Operators can leverage SDN and NFV for the orchestration of a cloud-based radio access network (RAN) environment and simplification of the backhaul infrastructure. In addition to this, SDN can be used to organise traffic flows and hand-off mechanisms across small cell architecture.
Ryan Perera, country head of Ciena India, is of the view that both SDN and NFV are relatively new initiatives in the Indian context, but many (if not most) of the Indian telcos have already been engaging vendors to better understand the potential benefits and deployment scenarios for India.
“In India, during the initial days of any technology, there is a general attitude of “wait and see, and try to learn from the failures that others make—this definitely pose as a challenge to any positive change. Also, the workforce, which is supposed to support SDN and NFV systems, must be highly motivated and they should keep abreast of the new rules of networking,” asserts Santanu Ghose, Director, Networking, HP India.
Fundamental Shift
SDN and NFV are bringing a fundamental shift in communication service providers’ (CSP) approach to build network infrastructure. The network transformation is expected to happen in a phased manner. This will not only be helpful in maturing the technology introduction methods and processes, it will also de-risk the business from scenarios like the disruption of network services.
“Today, the networks are built in silos wherein independent infrastructure is deployed for mobile, fixed, and enterprise markets with minimal or no infrastructure reuse or sharing. Realising the benefits from virtualization, CSPs are stepping up the efforts to analyse the impact of virtualization. It is expected that the initial targets for virtualization will be the software components with minimal or no dependency on underlying hardware,” says Vikram Nair, assistant vice president and global head of innovation for communication service providers segment at Aricent.
In the next 2-3 years the first steps towards virtualization are expected to find its place in the networks wherein selective independent network components will get virtualized. For instance, in LTE networks, the components that are only software implementation driven (with no specific hardware dependencies) such as mobility management entity (MME), ip multimedia subsystem (IMS), policy and charging rules function (PCRF), home subscriber server (HSS) will be the first target. Operations support systems (OSS) transformation is likely to happen simultaneously to manage virtual assets. This phased transformation will require OSS to support both legacy as well as virtual assets with an external management system to manage the virtualization platform infrastructure.
According to Nair in the next five years, it is expected that majority of network components will get virtualized enabling CSPs to sell Network-as-a- Service (NaaS). Additional network components which earlier were not targeted for virtualization because of their dependency on hardware platforms will see de-coupling of such components into control and data plane functions, with control plan functions being pushed onto virtualization platforms. For instance, in LTE networks, such network components will be deep packet inspection (DPI), serving gateway (SGW) and packet data network gateway (PGW). This phase will have OSS transformation to not only manage the virtual assets but also the virtualization platform infrastructure in a holistic manner.
Growth Drivers
Major factors that drive the demand for SDN and NFV are improved time-to-market, reduction in capex and opex and opening up of new revenue streams from business standpoint. From operations standpoint, network elasticity, multi-tenancy and ease of operations are the key drivers.
“Telecom sector is undergoing rapid growth and change. Increasing competition with new players entering the domestic market and the availability of emerging technologies is propelling the demand for SDN. The dynamic nature of the traffic load demand, faster convergence needs, dynamic QoS (Quality of Service) and prioritisation needs and dynamic network provisioning for internal and external customers are propelling the demand for SDN in this sector,” says Ghose of HP India.
He further informs that the decreasing cost of networking infrastructure – particularly with low-cost commodity switching boxes combined with control plane software, running either locally in the box or remotely on industry-standard servers, will be more economical than traditional proprietary routers that do the same job.
“Network-enabled Cloud technology brings cloud capabilities into the network with the flexibility and elasticity to deploy software applications wherever and whenever they are needed. Services and applications can be deployed, modified and withdrawn in a matter of minutes. Together these technologies transform the network and the cloud into network enabled cloud– one that is more fluid, more dynamic and more responsive to emerging service needs. This is leading to optimism around SDN and NFV,” says Batra of Ericsson India.
“Telcos in India are aiming to be competitive and hence they are looking for combination of solutions which can provide them reliability, agility and security. SDN and NFV are capable of fulfilling these needs and therefore we are noticing a gradual rise in the demand for these technologies,” says Jean Turgeon, vice president and chief technologist at Avaya.
According to IDC, the SDN market in the Asia Pacific region (excluding Japan) consists of spending from the enterprise and cloud service provider segments, is set to grow from $6.2 million in 2013 to over $1 billion by 2018.
Also, recent Infonetics Carrier SDN and NFV Hardware and Software market size and forecast report, expects this market to reach USD $11B by 2018. “We believe that there lies the real opportunity for Indian telcos. The operators should develop a clear vision of why they need to deploy SDN and NFV. Bringing in cost efficiencies through using current infrastructure and upgrade it to support future technologies is a thoughtful step that operators need to take,” points out Batra of Ericsson India.
Legacy Challenge
The legacy systems are major challenge. The revenue generating legacy assets cannot be discarded or swapped unless there exists a business case that balances the capex with opex savings over the next few years. But the legacy assets that are at the end-of-life phase must be removed.
For addressing the challenge posed by legacy assets, the service providers are now focusing on developing strategies that allow the legacy and SDN/NFV infrastructures to co-exist till the time when a complete overhaul of the system can be engineered.
For instance, from a commercial standpoint, capex for SDN/NFV will largely happen for new infrastructure and services, but not for swapping the legacy infrastructure and from a technology standpoint, legacy infrastructure will get controlled via the so-called proxy agents. These proxy agents will represent the legacy infrastructure as a SDN entity in the network until the legacy is replaced with SDN entity as part of network transformation.
The Telcos in India face a unique challenge, which is primarily due to the large investment that they have made for acquiring spectrum. With so much funds being deployed for acquiring spectrum, the companies don’t have the capacity to invest in network modernisation. Nair of Aricent says “There is limited scope for network modernisation or expansion, and the choice between either of those will have to be made.”
Similar opinion is being expressed by Shiv Putcha, associate research director, consumer mobility at IDC. He says, “You may not see massive roll-out or expansion but the telcos will have to focus on network modernisation for better service delivery.”
However, Jean Turgeon of Avaya is of the view that irrespective of the challenges, the service providers will make substantial investments in addressing the TTS (Time to Service). Just like MPLS (Multiprotocol Label Switching), which required months and months of development to build provisioning tools to mask and hide the great deal of complexity associated with it, the same journey has started with SDN. Hence it is not surprising to see investment in these areas to address the orchestration challenges associated with transition to SDN.
“With any new technology, there comes a learning-curve. In due course of time the full range of benefits that can come from SDN and NFV will dawn on the operators and enterprise customers in India. Once everyone knows about the economic benefits of SDN and NFV, the shift to these technologies will happen rapidly,” says Perera of Ciena.
Also, some experts say that the deployment of low and cheap quality of hardware products makes it much more challenging to deploy new innovations. However, Ghose of HP India, do not agree with it, he says “India is a competitive market and the telecom space is a good example of that. Importing low quality hardware products in the market is certainly not going to stop Telcos from innovating and deploying technology like SDN and NFV when they and the market are ready for it. So we don’t see the technology transformation slowing down given that adoption of SDN and NFV technology is important.”
Agreeing with Ghose, Nair of Aricent is of the view, “If that is the case, then the argument should also hold true for SDN and NFV equipment which will have similar gap in price to performance ratio when comparing top of the line vendors and vendors offering low cost alternates. Here, the key is to appreciate the fact that benefits SDN/NFV brings, are on top of the traditional mode of operation.”
“SDN is one of the most revolutionary technologies in recent years and will continue to transform the way networks are managed, controlled and used – ultimately helping to accelerate businesses in India,” asserts, Ghose of HP India.
However, Andrew Bond-Webster, vice president, Asia Pacific at Infinera has a word of caution, he says, “In India, there are different network environment in different states, in such cases, the level of complexity increases very dramatically when you are trying to deploy SDN . From finance and short term point of view, the deployment decision could be the easy one but in longer term it can make the life more complex for operators.”
NaaS: Business opportunity
Large-scale deployment of SDN and NFV is likely to have an impact on the contract between the operators, network gear makers and other stakeholders. Nair of Aricent is of the view that there could be new business models that will emerge and it will be the service providers who are going to benefit from it.
He further says that the success with business models that IaaS and PaaS providers such as Amazon and Google had, will be replicated by service providers by offering NaaS (network as a service). NaaS will be an opportunity for engineering services companies to drive new technology introduction into the networks, deliver network programming functions in the form of apps, drive efficiency in network operations through automated and centralised network orchestration and assurance.
Agreeing with Nair, Batra of Ericsson, says that new technology introductions entail an impact on the ways of working, however, it is a little premature to talk about the impact on the contract.
“With NaaS, the enterprise customer can use bandwidth more dynamically. With LTE / 4G services growing in India and bandwidth speeds of up to 20 Mbps being delivered through cellphone infrastructure, SDN will bring dynamic bandwidth provisioning to IP based core telco systems.” says Ghose of HP.
The Road Ahead
Given the exponential growth of the telecom space, connectivity spreading across the devices and Internet of Things (IoT) likely to add more connected data sources, companies will have to overhaul the infrastructure. It is inevitable that SDN and NFV are going be the key technologies that will enable this transformation and help in better management of networks and data.
“In time to come, we will see an increasing adoption of SDN by telcos because it enable them to build and offer differentiated services to their customers, that help telcos in enhancing their position in market places,” says Andrew Bond- Webster of Infinera.
Batra of Ericsson is of the view that growth of broadband wireless including LTE networks and prospects of wider use of cloud applications and services which are features of SDN & NFV may bring lot of benefits for the Indian market.