Managing the Telco Cloud: NFV and SDN role in the Existing OSS DomainAppledore Research Group

www.appledoreresearch.com

Cloud, Virtualization, and Policy domains are converging to support new business models

Cloud

PolicyVirtualization

Elastic – scale up/scale out

Agile Control

Optimize

Class of Service

NFV

Time to market

OPEX Savings

SDN

Data Flow Management

SaaS / PaaS / IaaS

• Cloud services managed via API provides bandwidth on demand and SaaS

• Virtualization managed via orchestration to add/change/ remove resources as a result of planned or unforeseen outages

• Policy both defines and controls service and resources. Coordination with orchestration, resource controllers, and analytics systems automates network changes in real time.

Self Service

What is Driving Investments?

1) Business Agility

2) Revenue Generation

3) Efficiency

New Business Models Require Agile Software Systems to Respond to Customer Demands

Launch Cloud Service Improve Customer

Experience Increase Revenue Reduce OPEX

Event Trigger

Policy Update

Execute Change

SLA Breach

Real time network analytics feeds policy management for closed loop automation implemented for service impacting events that require real time responses

Business Goals

Global View of NFV and SDN Trials & Deployments

W. Europe

NA

Africa

Middle East

LATAM

E. Europe

APAC

The chart is a representative

sample of leading PoC and

operational deployments for

CSPs around the world.

Western Europe, Asia-Pacific,

and North American regions

are leading the way. We

estimate that as many as 250

trials are under way. This

includes multiple proof of

concepts at the same operator

in different technology

domains. Less than 25 “live”

deployments are in progress

and some of these projects

are in the very early stages of

deployment.

Operationalizing the ETSI MANO reference architecture

• NFV Orchestrator: Responsible for on-boarding of

new network services and virtual network

functions. Coordination and bi-directional

communication to the VNF Manager is required to

support the order to activation lifecycle

management.

• VNF Manager: Oversees management of VNF

instances and the configuration and event

reporting between NFVI and Element

management.

• Virtualized Infrastructure Manager (VIM):

Controls and manages the NFVI compute, storage,

and network resources. Spins up and releases

resources on-demand.

Use cases and immediate benefits in market today

Use Case Focus Benefits

Virtual E-CPE NFV New deployments at large scale with ten-fold improvement in OPEX savings

Virtual PE NFV Economies of scale for IP VPN, layer 2 VPLS, pseudo-wire, etc.

Virtual RAN NFV OPEX savings, smaller footprint, and reduced energy consumption for eNodeB

Virtual IMS NFV Reduced TCO, higher service availability, efficient capacity usage applied to virtualizing the P-CSCF, S-CSCF, and HSS.

Virtual EPC NFV Point of aggregation and deployed as new technology to reduce CAPEX.

Virtual STB NFV CAPEX reduction, OPEX savings, and new service introduction

Virtual CDN NFV Customer experience and traffic optimization applied to controller and cache nodes.

Leading CSPs

CSP Classification Description

AT&T Trial SDN enabled bandwidth on demand for Ethernet services in Austin

CenturyLink Live NFV and SDN for Metro-E Services for Enterprise customers

Telefonica Field Trial Virtual EPC functions to support LTE services on UNICA execution platform

China Mobile Field Trial Virtualized EPC (MME, HSS, GW)

DT PoC Applying SDN Openflow to RAN and xDSL service delivery

Colt Live Virtual CPE to support VPN services

Orange PoC Virtual Evolved Packet Core

BT PoC Virtual Broadband Remote Access Server

SK Telecom PoC Managing virtualized and physical functions in LTE network

NFV and SDN reduces order to service cycles from weeks to hours and 100 fold improvement in OPEX

Service creationSource, stage,

deliver equipment

Install, Pre-test, Activate

Trouble-shoot

Support and MaintainNon-Virtualized

2 weeks to 6 months 3 - 6 weeks 3 – 4 weeks 1 week 1 week

Service creationService

OrchestrationPre-test & Activate

Support and MaintainVirtualized

< 1 day minutes minutes < 1 hour

Must have a service driven catalog and updated charging models

On-demand Service Creation and Execution Process Flow in a Virtualized Policy Driven Architecture

Service Creation

Instantiate VNFs

Set-up Data

Flows

Service Analytics

Optimize NFV-I and Data Flows

Data Collection and Network Analytics

MANO + SDN Control Orchestrating NFV

Catalog

1

1 3

3

4

4

2Service Chaining Closed Loop

2

Evolution in Managing the “Telco Cloud”

• Prepare – The management platform must support a service catalog construct. Catalogs form the basis for linking products to service instantiation and charging units.

• Virtualize – Managing virtual services must assume a mixed environment of both virtual and physical network functions.

• Data Flow – The benefits of NFV can only be fully realized with SDN. Orchestration and management of data flows between data centers provides both agility and dramatic OPEX reductions.

• Embed Analytics – Data ingestion from application performance, probe systems, DPI, and other existing assurance systems provides the necessary dynamic control loop to optimize the network.

• Industrial Scale Self Care – Full realization of a robust digital service platform providing partners and customers with application based services in a cloud service delivery environment.

11

Embed Analytics

Virtualize

Data Flow

Prepare

Differentiation

Val

ue

Expose Cloud

Service

capabilities

within platform

to partners

and customers

Automate analytics

closed loop

system into

policy system

Manage data flows

within and

between data

centersVirtualize new

network

functions (EPC)

and high OPEX

cost functions

(CPE)

Implement service

creation and orchestration

in virtualized and non-

virtualized environment

Industrial Scale

Self Care

Appledore Research Group Telco Cloud Management Market Taxonomy

SDN NFV

VNF Mgr VIM

Self Care Portal

Service ManagementService

ModelSLA Service Impact

API Gateway

A,A,A

Service Creation

Catalog

Products

Resources

Services

Order/Activate

Workflows

Business Logic &

Rules

Charging Logic &

Rules

DevOps

Policy Mgmt

Network Analytics

Service Chaining

Domain

Managers

SDN

Controllers

Infrastructure

Controllers

Shared Resources

Real Time Charging

Management & Orchestration

PartnersNOC / SOC Partner FinanceNetwork

PlannersProduct

MgmtCustomer

Non-virtual

APIsPartner

Mgmt

Store-

Front

Self-

Help

Service Fulfillment

Order Mgmt Activation

RCA & Event

Deduplication

APM and NPM

Passive Probes

Assure

Inventory

Topology

Discovery

Fulfillment

Assurance Logic/

Service Model

Privileges

Resource Control – Infrastructure,

network, and application control across

the SDN, NFV and non-virtual

components. Virtual resource instantiation,

routing and switching topology control,

and data flows are executed here.

Management & Orchestration – The run

time software to instantiate and manage

services created above. Coordination

between service creation, chaining, policy

management, and streaming network

analytics complete the feedback loop for

resource control and management.

Service Creation – A set of tools used to

design, create, compose, and test new

products and services rapidly. The catalog

provides a consistent, reusable, shared

data model to construct services based on

business and market needs.

CEA – A set of reporting tools used to

improve customer retention, improve

market campaign offers, and optimal tuning

of the network that aligns with value of the

customer.

API/Portal – Exposes processes and data

to customers, partners and developers

through both GUIs and APIs to support

self-service and Digital Ecosystems

Source: Appledore Research Group

Customer

Experience

Analytics

Marketing

AnalyticsCare Analytics

Network

Operations

AnalyticsNetwork

Optimization

Analytics

Customer

Location

NetworkDevice

What is the level of maturity of commercial products in the market today? - 1

• Several orchestration products appear solid -- capable of real time operations, defining and

creating NFVs, and NFV NFSs and CFSs, many with some integration to catalogs/templates and

early stage policy control.

• Substantial R&D is evident in ARG “resource control layer” – VIMs, Domain Managers,

Virtualization and packaged products (“nodes”) and has resulted in products that are in the

early stages of maturity. However, many require significant enhancement – as does OpenStack

code, which is often a core part of these offers.

• R&D appears to have been weak in next-generation topology, discovery, inventory – where we

see holdover topology, and technology not necessarily suited to high update rate, high scale and

near real time operation.

• Real-time analytics and closed-loop automation via policy and orchestration is in the very early

stages of development. ARG believes that this will be an evolution over years, in part due to the

nature of the technology challenge, and in part due to the understandable caution on the part of

operators as they allow automation to work in mission-critical areas.

What is the level of maturity of commercial products in the market today? - 2

• In virtualization and parts of VIM/cloud management, feature-rich proprietary solutions

exist in despite the push towards Open source community efforts.

• Nearly every major company is backing a distribution of OpenStack

• Yet nearly every major company either has proprietary extensions or a proprietary distro bundled

with advanced functionality

• ARG sees the open-source based distributions converging with proprietary ones in terms of

capabilities, and also sees suppliers differentiating their distributions via complementary technology

that they package open-source products with.

• MANO standards are maturing – e.g.: interfaces & VNF templates (ETSI, TOSCA, other…)

but significant gaps exist in Policy Schema and operations, and there is still little concrete in

the OSS / process layer – which must transition as well (see ARG Telco Cloud foundation

report) immediately above MANO.

Commentary on how we see the market evolving over the next 3 – 5 years

• Some large operators have a target of 50-75% transformation to cloud technology for their core networks by 2020.

• Consolidation in the infrastructure supplier market will accelerate as companies shift from purpose built hardware to programmable networks, resulting in fewer widely deployed platforms.

• As the market shifts towards open standards based platforms, the barrier to entry for virtualized elements is lowered, creating the opportunity for a plethora of new start-ups in the market.

• The management systems most impacted by virtualization of the network will be policy management, real time network analytics, active inventory and topology graphing, and real time charging.

• Operators will concentrate first on virtualization environments, their performance and stability, then move to orchestration/fulfillment, next to assurance, and finally they will look to highly valuable but complex closed loop operations that can yield significant efficiencies. This will drive investment priorities for commercial management software.

MANO Solutions in the Commercial Marketplace

MANO Software Portfolio:Feature Richness and Maturity Definitions - 1

Characteristic Significance

Pre-existing virtualization technology

This measures the degree to which a supplier had virtualization and virtualization management technology, typically from their IT business that could be re-purposed and adapted to the new NFV market. The existence of such technology, and associated deployment and operational experience, provide both a maturity advantage to such suppliers, as well as credibility for any claims of product richness and maturity.

Next-gen Topology Discovery and Modeling

This indicates the extent to which a supplier has appropriate technology to capture the dynamically changing topology and configuration of hardware, virtualization software, VNFs, ports, connecting flows. The NG virtualized environment requires a high degree of automation, rapid updates, and a detailed view of NFV-I. This requires either new technology or significant adaptation of older technology. Without such a topology, it will be difficult to implement proper service assurance, understand root-cause, and implement meaningful analytics and self-healing. In ARG’s view, this is one of the crucial technology building blocks of many future business processes.

MANO Software Portfolio:Feature Richness and Maturity Definitions - 2

Characteristic Significance

Real time, high speed, scalable event processing

Two of the defining characteristics of the Telco Cloud are 1) its dynamic nature, and 2) the ability to make changes in real-time (see business drivers section). This measures the degree to which a supplier's software is up to the task of high-update rate, near-real-time operation – e.g.: database updates, topology/discovery updates, orchestration or other. It reflects the need to support anticipated business models which include "on demand" capacity in both functions and flows, potentially personalized instances, and the ability to execute large numbers of changes in response to faults, demand variations, economic considerations, orders and other variables. We have seen limited capabilities in this area to date.

Policy Driven MANO Our view is that data and logic must be separated. Policy is likely to be the process, by which conditional data parameters are selected, whether to implement scale, availability, security, business rules or other. This characteristics measures the degree to which a supplier's orchestration/MANO solution is driven by policy - parametric configuration values that are set independently of the logical workflows. Policy may be achieved in many ways, but it is preferred if there is a clear distinction between workflow and parameter/data, and ultimately a recognition of the many domains that policy will exist in the future. ARG looks for architectures that will support closed-loop healing, optimization and similar actions over time, and for architectures that integrate smoothly with other policy domains. We specifically look to see a separate policy decision function, as well as the ability to take policy from an external PDP and use that data to drive orchestration.

MANO Software Portfolio:Feature Richness and Maturity Definitions - 3

Characteristic Significance

Proven Code Base This attribute measures whether the code base in products is proven in real world deployments. This may be demonstrated by products that were deployed or in extensive trials early in the market, by adoption by 3rd parties, or when substantial parts of the code is repurposed from known, proven products. Note that borrowed code may require significant enhancement - e.g.: in performance. To the degree possible ARG attempted to discern these differences. In ARG’s view, this is a relevant measure to indicate whether the marketing promises of a new product offer have field proof behind them. Old, unimproved, but proven code is not necessarily an asset.

Support for Open Standards

Open standards and open source code, in ARG’s opinion, both indicate that a) the solution will support a wide range of vendors, new technologies and new features in the future, and that b) there will be a broad and rich set of contributions to the code, maintaining it on the leading edge. This attribute measures the degree that the supplier supports open standards, and incorporates open-source code in their virtualization solutions. ARG looks to industry participation, industry interoperability demonstrations, incorporation o open-source code, and the supplier’s history of closed-vs. open solutions in this measurement.

MANO Software Portfolio:Feature Richness and Maturity Definitions - 4

Characteristic Significance

Support hybrid network functions

ARG believes that over the near, mid and even long-term, networks must be a hybrid of virtualized technology and physical assets – and therefore service creation, orchestration, assurance, and modeling technology must credibly support NFV, SDN, PFV and yes, legacy technology. This attribute measures the degree to which a supplier's products and architecture approach support this co-existence - often within the same network-facing service or customer facing service/product. ARG look for the ability to support PNFs in an orchestration process, to model PNFs, to interact with existing domain OSS, and to abstract similar virtual and physical instances into a single functional service. We also look to proven experience, trials and the supplier’s history of such support.

Multi-vendor MANO support

This attribute measures the degree to which a supplier's products and architectural approach support multi-vendor deployments, or, conversely, the degree to which they are more correctly vendor specific domain managers. This may be demonstrated via modeling capabilities, via deployed support, or via an ecosystem (strengthened by deployment support). ARG values such market based validation as when a supplier provides a common element in a multi-party NFV or SDN trial, or when they have a long history of modeling and supporting multi-vendor environments. In many cases we challenge suppliers to discuss not only the theory that they could support competitive elements, but the method and reality in the field.

MANO Software Portfolio:Feature Richness and Maturity Definitions - 5

Characteristic Significance

Cloud Management ARG defines cloud management as the combination of infrastructure management and VNF management, including management of complex VNFs. We look for solutions that have the ability to collect data at a granular level, take atomic corrective actions, understand the configuration of NFV-I, provide surveillance and analytics on nodes, DCs and across datacenters. ARG believes that the functionality provided at this lower layer determines the richness of functions that can be envisioned at higher layers – “garbage (or rich, quality data…) in, garbage out”. This attribute measures the maturity and feature richness of a supplier's core cloud management features, often derived from or enhancing Openstack - the ability to survey NFV-I and virtual instances and systems at a detailed level, to survey multiple DCs, to automate core tasks and expose this capability, to define re-usable logical modules, etc.

SDN Management This measures a supplier's core SDN management - its availability, maturity, features, and the degree to which it supports a limited datacenter SDN only or full WAN / telco SDN, including adaptation to network L2 and L3 protocols and support for commercial equipment. ARG looks for the supplier’s SDN-controller technology, its scope, its deployment, integration with VNF/cloud management and other factors that indicate 1) rich functionality and 2) proven operation.

Definitions for Market Execution

Characteristic Significance

Proof of Concept A CSP sponsored demonstration running in the CSP laboratories, or even full temporary deployment on experimental networks. We count each PoC based on the specific virtualization technology being evaluated. Multiple PoCs in the same CSP will be counted separately.

Deployment Any contracts awarded to suppliers that result in revenue for virtualization technology deployed. This includes both publicly announced and undisclosed business. Details and the scope of the deployment are required in the recording process.

Size of Bubble Annual revenue of software and services sold into the telecommunication market. This includes both virtualized and non-virtualized solutions.

WWW.APPLEDORERESEARCH.COM

• Appledore Research Group is a global research and consulting firm specializing in the telecommunication and software market.

• We provide forecast data, industry trend reports, and custom research in the areas of NFV, SDN, analytics, IoT, service assurance, service fulfillment, customer care, dynamic policy and real time charging in the telecommunication and media market segments.

• Our clients include global software and infrastructure suppliers, CSPs, and investment banking firms.

• Each of our analyst team brings 25+ years of experience driving change at both CSPs and major suppliers in the industry.

• Contact: Patrick.Kelly@appledorerg.com