& cplSiteName &

Carriers Say SDN Won't Save Capex

Carol Wilson
10/30/2013
50%
50%

SAN JOSE — Digital Disruption 2013 — Contrary to popular opinion, software-defined networking will not produce major capex savings for network operators, according to the two men responsible for virtualization strategy at CenturyLink and at Sprint.

Speaking on a Tuesday afternoon panel here on the impact of virtualization, James Feger, vice president, network strategy and development for CenturyLink, and Fred Feisullin, senior network architect in the CTO's office of Sprint, said there are advantages to deploying SDN and network functions virtualization (NFV), including getting new services to market quickly and, at some future point, opex savings. But capex savings isn't something they are expecting.

"When it comes to capex, I'd say it's a wash," Feger said. "Can I buy a virtual router today that is cheaper than buying a regular router? Sure. But transforming the telco environment into an SDN/NFV environment initially is going to cost more."

Telco central offices weren't built to house datacenter equipment and will need to be outfitted to do that, making the total cost of ownership (TCO) of a virtualized network about the same as today's capex budgets, he said.

In Sprint's case, the initial move to virtualization will take place in the evolved packet core, which isn't where most of the wireless network operator's costs lie, Feisullin explained.

"The core is a fraction of our capex, our costs are in the radio access network, mostly in radios, and those aren't going to be virtualized right now," he said. "The bigger gains are the new revenue sources that can be generated, then followed on by lower opex which will take much longer to be realized, then capex, maybe."

Like Feger, Feisullin sees higher opex associated with the initial deployment of new equipment to "get the infrastructure to work."

There may be more capex savings at the edge of the network and in CPE, such as set-top boxes, Feger said.

One further challenge in the early days of SDN/NFV is that creating virtual functions running on commercial off-the-shelf hardware creates complex operations challenges in the era when each function may be managed by a different siloed management system, Feger said.

New services acceleration and the ability to "fail fast" -- i.e., try something and then shut it down quickly if it doesnít work -- are key advantages to a virtualized approach, according to both men. They balked at a suggestion from fellow panelist Jeff Edlund, CTO of CMS-Enterprise Solutions at Hewlett Packard, however, that network operators are willing to accept a lower level of overall reliability when they move more functions to COTS gear that is not built for the five nines of proprietary telecom boxes.

"It's not that we are tolerant of fewer nines or less reliability," Feger said. In a virtualized network, the reliability burden may be shared among multiple boxes that are logically connected rather being built into a more expensive individual component.

Service providers are willing to move ahead of standards development, however, because they see virtualization as important to future business models and may, in fact, be influencing standards by what they deploy and use, Feger said.

Feisullin sees "as many different strategies out there as there are service providers," when it comes to what to virtualize first and how much legacy gear continues to function for some time to come.

He also credited ETSI with getting the ball rolling on NFV, regardless of where its standards process ends up.

"ETSI is already a success because it has torn down walls between service providers and vendors and between vendors and that has shaved years the deployment cycles," Feisullin said. "Are we there yet? No, we have a long way to go."

— Carol Wilson, Editor-at-Large, Light Reading

(18)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
TomNolle
50%
50%
TomNolle,
User Rank: Light Sabre
11/22/2013 | 9:24:11 AM
Re: Service providers may not benefit that much
I agree; there is a major risk that application awareness becomes stateful behavior that we already know doesn't scale in a cost-efficient way, particularly wrt opex.  I think that the SDN community will need to prove in an operations strategy, and to do that they'll also have to prove in a holistic approach to SDN--is it a complete strategy or a limited-area solution that still has to fit inside a bigger picture like IP.  If the former, how do we make it scale.  If the latter, how can it make enough of a difference to matter?
varkonyib
50%
50%
varkonyib,
User Rank: Light Beer
10/31/2013 | 4:18:26 AM
Service providers may not benefit that much
Centralization we had already with PDH/SDH, or ATM. Centralization of PNNI has failed miserably, although we still have some of those ATM switches in operations... :-)

The real issue would be a standard flow-through provisioning. But this is still far away. A standard interface between the switch and the controller does not help too much, when for each vendor's controller we need to develop to a different API.

At the end of the day all comes down to prices and technology architectures are secondary. SDH could not conquer the world because of pricing, not because it could not solve all technical problems. Recently, it has provided fully dynamical bandwidth control and common provisioning with other layers.

The real motivation for carriers is in OPEX savings in most cases. Managers are typically measured by EBITDA, and rarely on cash-flow. So CAPEX savings are virtual, and controllers never accept it, because it is too easy to falsify.

 

 

 

 
TomNolle
50%
50%
TomNolle,
User Rank: Light Sabre
10/30/2013 | 6:05:41 PM
Re: And the operators say...
I would hope that the IETF group thinks about some of the deeper issues (beyond simply deploying VNFs) but I can't say whether that will be what comes out.  If you look at service chaining, or any NFV element, it's kind of two-dimensional.  One dimension is how you deploy it and manage it, and the other is how the functionality itself has to be structured in order to achieve your service quality and availability goals.  It's not clear to me whether the IETF is fully engaged on either point but I think they do have a more general model for deployment and management than the NFV ISG does (because they have a broader scope of interest).
Dredgie
100%
0%
Dredgie,
User Rank: Light Sabre
10/30/2013 | 5:38:27 PM
Re: Vendor messaging
I can't talk for data center SDN, but suppliers should absolutely talk capex reductions when it comes to carrier SDN (as described superbly by dwx*). With on-demand provisioning, you can dramatically increase path efficiencies and reduce oversubscription. Throw-in an additional low-end edge layer – a whitebox MPLS switch – you can even reduce the overall traffic hitting costly LERs. All while keeping your core optics and switches unchanged.

 

*Full disclosure: I have no idea who dwx is – but adding to my xmas card list!**

**Fuller disclosure: I don't actually have an xmas card list.
DOShea
50%
50%
DOShea,
User Rank: Blogger
10/30/2013 | 4:45:03 PM
Vendor messaging
I think there is at least some vendor messaging out there that mentions capex savings as a benefit, though I have never seen it mentioned prominently. Maybe some companies are hard-wired to list capex savings as a benefit of anything they do.
sam masud
50%
50%
sam masud,
User Rank: Light Sabre
10/30/2013 | 3:37:28 PM
Too early
With all due respect, I don't think we can predict whether SDN will produce major or moderate savings in capex (and/or in opex) for the simple reason that we're much too early in terms of adoption of SDN. There will be a shakeout/consolidation in this market and vendor pricing models will change as the market matures. Also, I would not be surprised if opex savings from SDN aren't as expected because a more dynamic network that supports an increasing number of apps and let's service providers tailor services on a per user basis could impact opex.
dwx
50%
50%
dwx,
User Rank: Light Sabre
10/30/2013 | 3:30:19 PM
Re: That's their story and they're sticking to it
But Google is not using or have any plans on using open flow on their much larger backbone network. They are looking at hybrid central/distributed control using a PCE. The reality though is carriers have been using things like RSVP-TE to run links at 80-90 percent for 10+ years now on high capacity backbone networks. Where SDN may help those networks is at the edge and finding ways to control the spigots in and out of the network traditionally hard to control. Or optical+IP integration to turn up circuits dynamically or collapse layers. But you still need all the infrastructure in place to do those things, so capex isn't lowered dramatically. SDN adds some tweaks to that but the overall network doesn't change and the economics of using cheaper hardware in core networks doesn't really pan out. Like was said you are better off issuing a RFP and beating vendors up for better pricing.
gleavieboy
100%
0%
gleavieboy,
User Rank: Moderator
10/30/2013 | 3:03:32 PM
Re: That's their story and they're sticking to it
Good post Carol and kudos to the panelists.  But this shouldn't be a shocker.  ONF's original whitepaper on "SDN: The new norm for networks" doesn't sell Cap-Ex as the driver.  It's all about centralizing management and control, improving automation, increasing programmability, speeding innovation and offering more granular network control -> needs driven by today's east-west traffic patterns, big data, access from any device anywere etc...

Savvy operators also understand that SDN creates the flexible network architectures to support NFV (which in turn brings its own series of benefits). CFOs should be looking at SDN/NFV as a way of designing their networks for more contemporary needs - and establishing the elastic, programmable, scalable tenets required for future prosperity and competitiveness.  For those a tad more blinkered, there are plenty of vendors out there that will help them wring a few extra dollars out of cap-ex when doing like for like box replacements or upgrades. But work those deals now -because the vendor landscape for the new global network is going to look very different.
Dredgie
100%
0%
Dredgie,
User Rank: Light Sabre
10/30/2013 | 2:59:47 PM
Re: And the operators say...
Re. your last point, Tom: Hence, I assume, the energy that is being put behind the Service Function Chaining (Network Service Chaining as was) initiative in the IETF. Momentum that surprised even the Area Chairs. 16 drafts in progress with only one BoF behind them. One more BoF at IETF88 (next week) before the charter is approved and working group status is achieved - but if the meeting was a few week later, even that might have been negated.
TomNolle
100%
0%
TomNolle,
User Rank: Light Sabre
10/30/2013 | 2:08:26 PM
And the operators say...
...at least at the meetings I've recently had, that capex reduction is not the compelling driver of either SDN or NFV.  They say operations savings and service velocity, which is what they said in the panel Carol is quoting.  The problem is that operators spend only about 17 cents of every revenue dollar on capex lf all kinds, and neither SDN nor NFV could hope to impact ALL of that.  As one operator said, they could bring about a 20% reduction in equipment spending by beating up Huawei.

The thing is, service velocity is as facile an answer as capex.  Velocity without direction isn't progress it's just movement.  Nothing is going to make bits profitable no matter how fast you can shuffle them or arrange them to support new stuff.  The "new stuff" has to be created above the network of today.  That means that a big part of "service velocity" has to come from assembling features into new services faster and more effectively.  That's not an SDN story, and it may not even be an NFV story.  If NFV is just about virtualizing existing network functions then it's not about creating truly new services.
Page 1 / 2   >   >>
Light Readingís Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
LIVE NOW!
Friday, December 2, 1:00PM EST
The SDN Approach to IP & Optical Integration
Sterling Perrin, Senior Analyst, Heavy Reading
UPCOMING COURSE SCHEDULE
Friday, December 2, 1:00PM EST
The SDN Approach to IP & Optical Integration
Sterling Perrin, Senior Analyst, Heavy Reading
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Women in Comms Introduction Videos
Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

11|30|16   |   4:10   |   (1) comment


Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
LRTV Custom TV
We Can Make the World More Sustainable

11|29|16   |     |   (0) comments


GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
Finding a New Way to Engage Customers & Drive Revenue

11|29|16   |     |   (0) comments


Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
LRTV Custom TV
Do You Really Need Gigabit Infrastructure?

11|29|16   |     |   (0) comments


Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
BTís Openreach Strategy & Its Updates in 2016

11|29|16   |     |   (0) comments


A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
ITU: The Broadband Is Our Future

11|29|16   |     |   (0) comments


At Ultra-broadband Forum, Houlin Zhao, Secretary General of ITU, discussed how important it is for countries, companies and everybody to be working together to help to build the broadband and digital economies (UBBF2016).
LRTV Custom TV
Tackling 5G in Dallas

11|28|16   |     |   (0) comments


Here are our highlights of the 5G North America show in Dallas, Texas with Light Reading's Dan Jones.
LRTV Interviews
Cox Prepping for Virtualization Trials

11|14|16   |     |   (0) comments


In this video interview, Cox's Jeff Finkelstein discusses MSO's plans to test managed business services in early 2017 and tackle Distributed Access Architectures.
LRTV Custom TV
Drivers & Potential of NGP

11|11|16   |     |   (0) comments


ETSI has created an Industry Specification Group to work on Next Generation Protocols (NGP ISG), looking at evolving communications and networking protocols to provide the scale, security, mobility and ease of deployment required for the connected society of the 21st century. The NGP ISG will identify the requirements for next generation protocols and network ...
LRTV Custom TV
Huawei IP 2020 for Future Networks

11|11|16   |     |   (0) comments


Future Networks should satisfy many requirements such as high throughput, extremely low latency, flexible mobility, intrinsic security, networking automation, and so forth. The Chief Architect of Huawei Future Networks addresses a holistic solution, i.e., IP 2020, to achieve these requirements for various future life scenarios (e.g., autonomous driving, tactile ...
LRTV Custom TV
Digital Object Architecture

11|11|16   |     |   (0) comments


Digital Object Architecture provides a basic information infrastructure that can facilitate interoperability between or among different systems, processes, and other information resources, including different identity management systems. Digital objects are networked objects that are named by digital object identifiers and instantiated by an infrastructure service ...
LRTV Custom TV
BT's Openreach Has High Hopes for Long-Reach VDSL

11|11|16   |   06:04   |   (0) comments


Peter Bell, Network Portfolio CIO at BT's access business Openreach, talks about the operator's trial of a new broadband access technology called Long Reach VDSL.
Upcoming Live Events
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
AT&T Debuts DirecTV Now on New Video Platform
Mari Silbey, Senior Editor, Cable/Video, 11/28/2016
Apple Seeds 5G? Seeks 'Multi-Gigabit' Chip Designer
Dan Jones, Mobile Editor, 11/30/2016
Altice Plans FTTH for Entire US Footprint
Iain Morris, News Editor, 11/30/2016
Altice FTTH Bill Could Hit Almost $9.6B in US
Iain Morris, News Editor, 12/1/2016
Samsung Bows to Investors, Considers Revamp
Iain Morris, News Editor, 11/29/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Live Digital Audio

Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.