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Inside CenturyLink's NFV/SDN Strategy

Carol Wilson
4/22/2014
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CenturyLink is looking to balance substantial promised benefits against real challenges as it explores its options for SDN and NFV.

The number three US telecom operator is taking an aggressive but practical approach. At least that's the vision put forth by James Feger, VP of network strategy and development. Feger helped launch CenturyLink Inc. (NYSE: CTL)'s dive into virtualization in late 2012 by creating a small team within his staff that worked on SDN and NFV concepts.

"Now we're at the point where any network function we look at adding to the network, our first goal is to find out can we run this as a virtual function," says Feger, who will be a keynote presenter at June's Big Telecom Event, discussing CenturyLink's innovation in this area.

CenturyLink's James Feger

Making the leap in 18 months from initial exploration to actual deployment followed two early successes. CenturyLink first deployed a virtual firewall product. Then the company deployed a virtual content delivery network (CDN) for its internal use, to distribute video for IPTV deployments and video-on-demand services. In each of those cases, the carrier had a fallback position if the virtual approach failed to meet expectations, Feger points out.

"We could always go back to an appliance approach to offering managed firewall services and to a more traditional CDN," he says. "That was why we thought we could take a bit of a risk to be early adopters."

CenturyLink is looking to participate in early demonstrations of virtualization -- such as the European Telecommunications Standards Institute (ETSI) NFV Industry Specification Group's proofs of concept -- based on immediate product-related needs, not theoretical deployments.

"We believe that we as a company, we are going toward more managed services," Feger explains. "So when we were looking for things to demonstrate, we do have a few items to solve internally such as the next generation sets of firewall capabilities, security services, and encryption services. For things such as AAA or DNS infrastructure -- we want those virtualized, but for us that is a different level of priority."

Next page: CenturyLink's transition strategy

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Carol Wilson
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Carol Wilson,
User Rank: Blogger
5/5/2014 | 9:55:37 AM
Re: Cloud will envelop the edge
"Google Fiber has already demonstrated it can profitably price at $0.00001 in the MAN" -- I'm curious what this figure is based on. Is this based on what Google is charging in KC or Utah? 

 
Infostack
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Infostack,
User Rank: Moderator
5/5/2014 | 9:43:07 AM
Cloud will envelop the edge
This is just the beginning of a fundamental restructuring of the telcos; all of whom are just balkanized islands at the edge of the core dominated by Google, FB, Amazon, et al... The restructuring will mirror what IBM underwent in the early 1990s as the Wintel model disrupted the centralized mainframe processing model held hostage by inefficient connectivity. Ironically a "reverse" situation than what we see at present where the core is significantly scaled and cheaper than the edge.

The edge providers are sitting on business models that still charge $0.001 to terminate the equivalent of a voice minute in the MAN (much, much more for wireless access), whereas the core WAN's economic rate is $0.0000004 and declining 20-40% annually. Bringing WAN-side scale to the edge and a focus on driving marginal cost down at every layer and boundary point (both capex and opex) Google Fiber has already demonstrated it can profitably price at $0.00001 in the MAN, and they have yet to scale the model to wireless offload and backhaul, SMB and the big kahuna, enterprise managed services.  (The latter will actually pay for a lot of edge investment.  A last mile 800 model.) So MAN costs can shift an additional 1-2 decimal places to the right as the scale economies of the cloud are driven to the edge.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
4/23/2014 | 2:57:39 PM
The final bit
The final bit is the real benefit of SDN and NFV: Allowing carriers to create networks that are so flexible that customers can configure their own virtual networks on the fly, without human intervention. That will result in increased demand and revenue for carriers. Other benefits for SDN/NFV are cost savings, which are terrific, but do't grow the business. 
jabailo
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jabailo,
User Rank: Light Sabre
4/23/2014 | 1:29:19 PM
Re: Realistic and intriguing
Sure, I imagine the costs for SDN setup are a tiny fraction of buying and installing hardware.  It makes sense to do it even it fails entirely.

And if it does work, then think of all the instant optimizations you can experiment with which would otherwise require new purchases, equipment updates and so on.

It's hard to even imagine going back to hardware if it at all works.
Ray@LR
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Ray@LR,
User Rank: Blogger
4/23/2014 | 8:24:37 AM
Realistic and intriguing
THis all makes a lot of sense and, I imagine, it's in line with what alot of operators are doing -- being cautious but explorative, figuring out what is going to work and having a rewind button/backup plan. 

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