operations & monetization in the virtual network

How Support Software Will Play a Lead Role in the Virtual Future

Operations & Monetization in the Operations & Monetization in the Virtual NetworkVirtual Network

Tim McElligott – Senior Consulting Analyst, Global OSS BSS Strategy

Stratecast | Frost & Sullivan

Analyst Briefing Presentation

April 3, 2014

Today’s Presenter

• Focus: Operations and Monetization (O&M) (also known as OSS/BSS)

• McElligott has 25 years of telecom experience, including a decade with a major

Tim McElligott, Senior Consulting Analyst

Stratecast, a division of Frost & Sullivan

© 2014 Stratecast | Frost & Sullivan, all rights reserved.

Proprietary and Confidential to Stratecast.

North American operator in technology and engineering roles for both wireline and wireless voice and data systems. His concentration for the last 15 years has been

in telecom support software. As the industry migrates to 4G and beyond,

operations support systems will play an increasingly important role in advancing software-defined networking, self-optimizing networks and various levels of

virtualization.

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Today’s Agenda:

• Why is the communications industry in such a critical state of flux?

• Three innovations leading the response: NFV, SDN, SON.



• The future Virtual Network and why O&M is so important to its success.

• Status, expectations and challenges for the Virtual Network.

• Conclusion: O&M’s Time to Shine

Why is the communications industry in such a critical state of flux?

GROWTH



state of flux - a state of uncertainty about what should be done (usually following some important event) preceding the establishment of a new direction of action.

FLUX

The Flux Capacitor (1)

• Network Technology Advances and User Device Evolution – Transitioning to 4G LTE, improved performance and new smartphone

capabilities are improving the digital lifestyle

consumer and business customers.

• Cost Improvement Pressures – Financial pressure to be more cost effective is a growing concern CSP executives around the world in both



effective is a growing concern CSP executives around the world in both

mature markets and in high growth areas.

• Data Usage Volumes – exponential expansion continues, but competitive

pressures mount for better mobile data pricing plans and service offers.

• Advancing Enterprise Business Strategies – industry continues to

incorporate mobile connectivity into goods and services.

These drivers were identified in a recent Stratecast Report (OSSCS 15-01)

called, “The Virtual Future and its Relationship with OSS and BSS”.

The Flux Capacitor (2)

Competitive Forces – With more available

options, enterprises demand negotiated pricing

and strategies tying partner compensation with service consumption. Rating/charging and

partner management systems are ill-equipped.

Device and Data Security – Heightened focus on mobile security and increased

sensitivity to the use of mobile devices for mCommerce.



Changing Business Models – M2M, B2B, and multi-partner value chains drive

CSPs to seek new systems and new business processes to accommodate. Most

deployed OSS/BSS are not equipped to address virtualized services, multi-tenancy relationships between suppliers, and white labeling requirements.

Real-Time Data Analysis and Customer Awareness of Personal Data –Consumer awareness of personal data and its analysis will significantly gain attention by service providers and other key industries.

Figure 1 - Communications Industry: Business Model of Yesterday (and Today)

Our Connected

WorldSource: TAM, TMF GB929

Fulfillment Assurance Billing

Customer Management

Service Management

Resource Management

Supplier/Partner Management

Enterprise Management

Product Management

Market/Sales Management

OSS / BSS

• Fixed-line Voice• Mobile• Broadband Data

Focus on Technology

Problem: the current business model and architecture can’t respond.



Fixed-Line

MobileIP

� Voice� MMS / SMS� 2.5G Data (GPRS/EDGE)� 3 G Data (UMTS)� 3.5G Data (HSPA)

� 4G Data (LTE)

Mobile� Routers� Switches� Databases

IP

� Voice

� Broadband DSL� Cable

Fixed-Line

Network TechnologySource: TAM, TMF GB929

• Consumers• Small Medium Business• Enterprise

Focus on Customers

The current network environment, with its evolutionary waves of change, has served the global CSP community for well more than 100 years. It is now poised to

undergo the most significant technology transformation to date, as network virtualization concepts push forward to address the capacity, flexibility and

responsiveness needs demanded by today’s business environment.

So the industry responds with new models and new architectures

Network Function Virtualization (NFV)

Software-Defined Networking (SDN)



Self-Organizing Networks (SON)

It is our opinion at Stratecast that these are not hyperbolic trends, but real initiatives with enthusiastic and committed weight behind them.

Based on discussions with Service Providers, their public statements, and the development work already underway, NFV is the highest priority.

A word about virtualization:Who is to say what is real? Can “virtual” be just as good?

This is American actor Joaquin Phoenix, apparently in love in the real world.

This is Joaquin in love with a virtual entity (his mobile OS) in the movie “Her.”



There have been enough benchmarking tests and real-world examples within the data

center to show that virtual machines, based on commodity hardware and components,

can support the most demanding and mission-critical applications.

Network Function Virtualization (NFV)



Although control mechanisms for NFV and SDN differ in the processes they need to manage (i.e. operating systems in NFV; configurations in SDN) this could be a place where the technologies can begin to come together.

NFV Architecture -- ETSI



As if mediation and control was not complex enough, OSS & BSS, will have three routes rather than one to access and correlate data from Virtual Network Functions and Legacy Network Elements. It must also contend with messaging from a separate layer of NFV Management and Orchestration, which has three separate functions within it.

Where to Start?



Yes, but what about…



The top concern about moving to a virtual environment is basically an OSS issue.

It represents the concern over real-world orchestration and control versus the

ideal level of control defined in the specs.

Trends, Fads, Fades and Dead Ends

VoIP, Cloud, IMS, Big Data, The Internet of Things, Ring

Tones, SaaS, Unified Communications, NFV, SDN, Customer Experience, Machine Learning, AI, Tablets

Why NFV is not a fad: The Rapid Pace of Progress• The first informal discussions on cooperation occurred in April 2012.

• The first formal operator meeting in Paris quickly followed in June.

• The ETSI NFV group was quickly formed in September that same year



• The ETSI NFV group was quickly formed in September that same year

• Publication of the now famous “Call to Action” whitepaper came a month later.

• Then the first NFV ISG plenary session was held in January 2013

• By October the group had four specification documents ratified and published

along with a second whitepaper.

• Two weeks ago, ETSI and the Open Networking Foundation announced a

partnership to leverage SDN to accelerate NFV deployment (more on that

later.)

• Who said Service Providers couldn’t move fast?

A Word about Software-Driven Intelligent Networks



Deploying SDN is like the fighter pilot being asked to turn a high-tech, precision and

dangerous piece of equipment over to a computer to be controlled remotely by

software. But as the CIA has proved, and this simulator on the right shows, software-

controlled drones can be managed from the safety of a control room far away from

immediate danger. So if a drone can be controlled from half-way around the world, so

can a network.

Challenges to implementing SDN



Because SDN is more of a vendor-led initiative, there are naturally more

territorial battles being fought to advance competing agendas than is currently

taking place in NFV.

SDN Architecture



Software-Defined Networking (SDN)

*SDN is a Supplier Driven Initiative

Goals and Benefits of SDN:• Decouple Control and Data Planes • Centralize Management and Control • Open Network to Third Parties



• Open Network to Third Parties• Create Equitable Relationships with OTT players • Standardize Configuration and Orchestration • Leverages Open Source in a Carrier Environment• Eliminate Proprietary Interfaces

Other Challenges to implementing SDN

• The Big If

• Questions about the longevity of the OpenFlow protocol

The transition to SDN is more complex than NFV



• The transition to SDN is more complex than NFV

• Core network, data center, network edge or everywhere?

• The unnerving pace of change

This is our Future

Canis Major – 114 million

Light Years away

Andromeda/Milky Way 4 billion years

from now



(real) (virtual)

As we look into the future for NFV and SDN, we don’t see them

remaining separate entities for long.

By collaborating, NFV and SDN can help Service Providers address

the unique needs of national and global enterprise users

A Virtual Network is More than the Sum of its Parts



CSPs Rank the Drivers for SDN/NFV



Service providers have not realized savings from virtualization in the

data center and don’t believe they will do so in the network until they can

reduce the cost of managing the network and delivering services.

Other Challenges and Concerns regarding NFV & SDN



The Role of O&M Grows and Grows

• The full benefits of a virtual network will not be realized without a

tandem focus on OSS and BSS, which needs to create:



tandem focus on OSS and BSS, which needs to create:

• More automated processes

• Deeper levels of data analysis

• An intense focus on customer centricity

• Increased flexibility within the revenue and partner management functions

• A keen adherence to open standards, which has been circumvented for far too long

Requirements for O&M will demand innovation

• Next Gen O&M must address both B2C and B2B scenarios

where the enterprise customers may also be a partner in jointly

providing advanced virtual services to common customers.

• With any such CSP and partner ecosystem, new services,

including mashups, will be broader than traditional service



including mashups, will be broader than traditional service

offerings.

• Next Gen rating & charging systems could become more than

support systems for CSPs; they could be services unto

themselves.

• Side-step the continuing cycle of silo creation

The New Flux Capacitor



O&M OSS BSS NFV SDN SON 2 to 5

years

Required

for Transformation

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For Additional Information

Tim McElligott

Senior Analyst, Global O&M Strategy

(815) 464-3784

[email protected]

Karl Whitelock

Director Global O&M Strategy

(801) 446-1934

[email protected]



Troy Morley

Analyst, Global O&M Strategy

720-248-7692

[email protected]

Perry Somers

Director of Business Development

Information & Communications Tech

(360) 416-4982

[email protected]

operations & monetization in the virtual network

Technology

future virtual network

recent stratecast report

critical state of flux

data systems

flux capacitor

mobile security

operations support systems

communications industry