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NFV Is Down but Not Out

Iain Morris
5/22/2018
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In an industry too often guilty of hype and hyperbole, Ibraham Gedeon's bluntness is refreshing. "Our vision is to be able to move these network functions around and make them software-based, and not just take all of that shit and put it on commercial hardware and call it done," says the chief technology officer of Telus, one of Canada's "big three" operators, in fulminating about network functions virtualization (NFV), one of the most hyped telecom technologies of the past decade.

Dreamt up as a concept way back in 2013, NFV is supposed to do exactly what the label says, bringing the virtualization that has already swept through IT into the world of network routers and switches. Essentially, it should mean breaking up the cozy marriage of hardware and software in proprietary network equipment. Software would then take charge of the network. A network function would be a software program you could run over any bit of commodity gear. Costs would fall dramatically. Operators would be able to spin up services with the stroke of a key.

Floored
Can NFV get back on its feet?
Can NFV get back on its feet?

But five years after it was first conceived, a successful divorce of hardware from software has still not happened. Instead, the industry is in the throes of a painful separation that has dragged in all of the family members. Operators still complain they cannot use software from one vendor with equipment from another. Vendors, they add, have ratcheted up software charges to offset hardware losses. Along with the added complexity of NFV, that has eroded cost savings. If NFV is to deliver the benefits it originally promised, operators and vendors will have to reevaluate their entire relationship. (See Virtualization Is Kicking Juniper in the Berries and Cisco Bows to Carrier Demand for Software Outside the Box.)

Gedeon has several gripes about NFV in its current shape. The most obvious is that Telus Corp. (NYSE: TU; Toronto: T) has not been able to realize cost saving targets because of the software fees that vendors charge. "We've dropped the price of hardware to a seventh," he told Light Reading at the Digital Transformation World event in Nice last week. "But if you are adding to the price of software licenses you are not where you need to be." (See Telus CTO: NFV Burden May Cripple Telcos.)

Sitting in Judgment
Ibrahim Gedeon, the chief technology officer of Canada's Telus, has harsh words for NFV vendors.
Ibrahim Gedeon, the chief technology officer of Canada's Telus, has harsh words for NFV vendors.

The cost problem is not just one of licensing fees, however. With NFV have come additional suppliers demanding their pound of operator flesh. "I pay people like Red Hat all of a sudden for OpenStack," grumbles Gedeon, referring to the open source infrastructure platform and one of its chief supporters. Many suppliers also have no "empathy," he says, and are busier trotting out new buzzwords and phrases ("orchestrator of orchestrators" and "artificial intelligence" are two he cites) than tackling basic operator problems. The ability, for example, to spin up a local evolved packet core is still not there, he says.

Far from bringing any kind of automation, NFV seems to have lumbered Telus with additional complexity and operations staff. While overall headcount at Telus rose from 51,300 in 2016 to 53,600 last year, Gedeon attributes the increase to non-telco expansion and says the workforce at the core telecom business has not grown. Ideally, though, he would like to have fewer technology teams. "We've realized a third of the savings. We need to get to a factor of ten," he says. Supplier offerings, it seems, are not helping Telus to realize this target. "Vendors have given us stuff that keeps job security for my 14 teams. How do you make them one team?"

Next page: At an impasse

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Gabriel Brown
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Gabriel Brown,
User Rank: Light Sabre
5/24/2018 | 6:47:03 AM
Re: "I pay people like Red Hat all of a sudden for OpenStack,"
Operations and TCO are very important in vendor selection, contract terms, and so on. No doubt operators are often more than a little over-optimistic at the start of, say, a 5-year contract. But it is very much is part of the equation.

The elephant in the room for NFV is public cloud. We kind of have a line-of-sight to a point where many/some network functions will migrate to public cloud infrastcrture. From there you move pretty quickly (logically speaking) to operators paying for network-as-a-service. Maybe a bit speculative and long-range, but to be dismissed at your peril.
Gabriel Brown
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Gabriel Brown,
User Rank: Light Sabre
5/24/2018 | 6:39:57 AM
Re: "I pay people like Red Hat all of a sudden for OpenStack,"
Operators that have invested and are operating NFV Cloud (and SDN) seem pretty positive.

They are much less negative than those operators that want pre-packaged vendor solutions for less money. I wonder why.
yarn
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yarn,
User Rank: Light Sabre
5/23/2018 | 3:20:34 PM
Re: "I pay people like Red Hat all of a sudden for OpenStack,"
Cheaper to buy is often more expensive to operate, but how many operators actually bother to calculate or project cost of ownership of network purchases over the planned deployment life? I wouldn't be suprised if the CapEx savings on the initial purchase are just a rounding error compared to TCO, yet it is often the decisive factor. But what would the TCO savings be of network equipment that is for instance 20% cheaper but also yields 10% lower network utilization due to reduced port buffering capabilities? The challenge of selling and buying network equipment is how to make these cost/performance differences more transparent. 
mendyk
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mendyk,
User Rank: Light Sabre
5/23/2018 | 1:20:01 PM
Re: "I pay people like Red Hat all of a sudden for OpenStack,"
Right -- which is what makes the whining from some (many? most?) operators so hollow.
Gabriel Brown
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Gabriel Brown,
User Rank: Light Sabre
5/23/2018 | 12:14:17 PM
Re: "I pay people like Red Hat all of a sudden for OpenStack,"
You could argue that in some areas operators have already done well out of NFV by driving down hardware costs on appliances. It's not the operational transformation many want, but is a lot cheaper to buy, say, a classic EPC then it was before NFV. There are many reasons for price movements, but pressure and desire for software-only has certainly played a part.

Time is probably the key metric for NFV/Cloud. Refreshes and new deployments are opportunities and it looks like that is how NFV is making progress... And it is evolving all the time (cloud native, etc.)

The good thing is there is, for the most part, a competitive market. Operators can buy from vendors (including support), they can develop their own, or a mixture of these.
Gabriel Brown
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Gabriel Brown,
User Rank: Light Sabre
5/23/2018 | 12:04:43 PM
Re: "I pay people like Red Hat all of a sudden for OpenStack,"
Ultimately there aren't many shortcuts if you value quality and reliability.

Good post yarn

And this is reality for most (all?) operators

And should things break down it's nice having a vendor you can hold responsible instead of your IT department.
mendyk
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mendyk,
User Rank: Light Sabre
5/23/2018 | 11:12:24 AM
Re: "I pay people like Red Hat all of a sudden for OpenStack,"
Vendors and industry experts oversold the economic benefits of NFV, no doubt. The focus on cost saving obscured the main strengths of virtualization, which involve significant improvements in agility, service support, time to market, etc. In other words, business expansion rather than cost reduction. The idea of disintermediating technology suppliers hasn't made any sense for the reasons you note. The decision-makers at the telcos can blame outside forces all they want, but ultimately they are responsible for their company's NFV strategy.
yarn
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yarn,
User Rank: Light Sabre
5/23/2018 | 10:57:42 AM
Re: "I pay people like Red Hat all of a sudden for OpenStack,"
Perhaps some of the NFV "business case" assumptions were wrong to begin with because network equipment vendors are typically subsidizing the OS software cost through the hardware sales. When hardware and software are sold as unbundled products this is no longer possible, and the cost balance changes completely. Even then it's tough for equipment vendors to support a "white box" or NFV business model because often there aren't any R&D savings that can be passed on since most added value (and revenues) still comes from selling integrated systems. But equipment vendors do apply NFV where there are good application fits for an x86 architecture from a cost/performance point of view.

Recently vendors are starting to offer infrastructure APIs that allow operators to run their own Network OS and directly access the RIB, FIB and MPLS tables, so that might be the way to go. It still remains to be seen how widely applicable, reliable and cost effective that will be in practice for tmost operators. Commercial routing stacks have gone through years of product hardening in thousands of field deployments and countless multi-vendor interworking scenarios. With every new feature you must run a battery of regression tests in a very sizeable testbed to make sure nothing got broken in the upgrade. These are all costs and capabilities that are hard to replicate and easily overlooked. 

Ultimately there aren't many shortcuts if you value quality and reliability. And should things break down it's nice having a vendor you can hold responsible instead of your IT department.
mendyk
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50%
mendyk,
User Rank: Light Sabre
5/23/2018 | 9:39:50 AM
Re: "I pay people like Red Hat all of a sudden for OpenStack,"
So some telcos have the same mindset as their customers who want all kinds of services for little or no actual money. Kind of ironic.
ASX4000
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ASX4000,
User Rank: Lightning
5/23/2018 | 5:07:54 AM
"I pay people like Red Hat all of a sudden for OpenStack,"
No, actually you pay for a service that somebody delivers to you because you aren't able to take care by yourself. If you don't like it, nothing easier than this. Get the people, get the knowledge and do it by yourself. Ohh, and don't forget you need to pay for the skilled people...Umpf! That's the hard way to learn that "opensource" doesn't mean it's for free!
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