vtelcos : How Cloud Computing is Changing Service Provider Networks Roy Rubenstein, Consultant LightCounting Market Research

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1 vtelcos : How Cloud Computing is Changing Service Provider Networks Roy Rubenstein, Consultant LightCounting Market Research

2 Summary Communications Service Providers (CSPs) are undertaking a fundamental re-architecting of their networks. The reasons are simple: they are losing business because of the clunkiness of their networks and they want to be ready for new opportunities: IoT, 5G and video. The consequences are considerable: Not just building a new style of network but organizational and skill set changes. Also impacts the vendors and the supply chain. 2

3 The Era of Digital Disruption: Changing telecoms, changing all industries Wave 1 Wave 2 Wave 3 IoT era Mobile + apps era PC era ICPs Telco cloud transformation

4 Challenges Facing CSPs Not a new problem but has now become critical Competition Operators realize they must transform their service offerings and their networks over which they deliver them if they are to return their businesses to health. Growing pace of change Regulatory Written in 2007, a report on IMS Legacy networks Miserly growth 4

5 How to view the Internet Content Providers? Data centres SDN Virtualization Open source Service agility Standards acceleration White boxes Trailblazers Role Models Collaborators Competitors Open Compute Project - Telcos Telecom Infra Project OTT services Cloud services Broadband & digital home AI and analytics 5

6 ICPs and CSPs: A Comparison 6

7 Network transformation: The Goal Source: ETSI From dedicated platforms to something very different Source: SK Telecom 7

8 The Technologies Source: Verizon s SDN- NFV Reference Architecture 8

9 The Journey Service impact vims, vepc, Enterprise e.g. VPNs, network on demand VoIP, VoLTE Residential, mobile, enterprise services Central offices: network edge 5G, IoT Multi- access edge computing Low- latency, proximity Legacy to be retired Data centers: centralized functions Cloud technology deployment % Time 9

10 Challenges: Many and Varied This is new for everyone: need to create ecosystems and avoid fragmentation. CSPs recognize the merits of the open approach, but it is very different to what they are used to. Must prioritize: few have the resources to join them all. The CSPs cannot wait for the vendors. Even the open source community with their quicker releases are not moving fast enough. This is causing new ways of working. 10

11 Regional Differences and Status AT&T: all new services on its virtualized platform One NA operator first stopped buying custom platforms 2 years ago One European operator will have an NFV orchestrator, VNFs, and SDN controller live in each of its countries of operation in the next year. 11

12 Open Hardware Initiatives Initiative Details Open Compute Project CORD Telecom Infra Project Open ROADM MSA Founded by Facebook, Intel and Rackspace. Covers servers, storage and networking with a particular group focused on the needs of the CSPs A program to change central offices into data centers. Includes three programs covering mobile, enterprise and residential. Program to address access, backhaul, and core and management. Now has 450 members including Facebook, Microsoft and 20 CSPs. Goal to develop interoperable ROADMs and avoid vendor lock-in. Backed by the likes of AT&T, SK Telecom and Orange 12

13 Strategy Leaf and spine VNFs on servers Tackle non- virtualized hardware: CORD and TIP White boxes, stripped down CPEs What is then left? ASICS and optics 13

14 TIP Voyager Packet Optical Router ADVA Optical Networking: Network management system, reseller Coriant: switching and routing software Broadcom s 3.2 Tbps Tomahawk Switch IC 1.2T: 12x100G client side Celestica - manufacturer 800G line side: Acacia s 2x400G coherent Potential roadmap: - 6- pack platform, like the Wedge switch - Boost 1RU: 400/600G lightpaths, 6.4Tbps Tomahawk II IC, 400G client interfaces 14

15 Supply Chain Changes Current)Situa=on) End)Users) Proposed)Changes) End)Users) Future)Situa=on) End)Users) Re;sellers) Systems) )(white)boxes)) Re;sellers) Systems) )(black)boxes)) Modules) Systems) )(black)boxes)) Modules) Systems) )(white)boxes)) Modules) Components) Components) Components) 15

16 Final Thoughts This is the most ambitious transformation in the CSPs history. And it is happening in a blink if you consider their 100-year-plus histories. The change represents a complexity reset. The new networks will also be complex but they bring significant benefits. This is hugely challenging for the CSPs and will take time. CSPs will not become ICPs but they will become far better equipped to adapt their service and connectivity offerings. Equipment makers see what is coming. They still remain networking experts but their value-add is going to change. 16

17 LightCounting s cloud report was published in February

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