& cplSiteName &

SDN Raises Business Challenges

Mitch Wagner

SDN demands carriers change their business models, creating challenges that go beyond the technical, says Jeff Smith, strategy and marketing director for the connectivity segment at Interxion.

Challenges include adapting to customers on a pay-as-you-go plan, educating customers about changing networking model, and loss of control of the network, Smith says.

Interxion is a carrier-neutral datacenter operator with €307 million revenue last year, operating 37 data centers in 11 countries across Europe. Smith's connectivity business unit connects 500 carriers, 20 peering points across Europe, as well as CDN operators and mobile backbones. The connectivity segment is one of five main business units for Interxion; the other four are finance; digital media, which includes gaming and advertising; systems integrators and enterprise; and cloud providers.

Interxion doesn't provide SDN services and operations itself -- its business ends at the rack. But Interxion's role as an infrastructure provider allows it to see how SDN plays out in each of those segments, including the carriers who serve all the segments, Smith says. Interxion sees the challenges in multiple market segments.

The pay-as-you go model is a chief challenge. Cloud providers have introduced enterprises to a new payment model for services and enterprises now demand that kind of payment model from carriers, Smith says. Instead of enterprises making a large, upfront payment to carriers for fixed services, enterprises now want to subscribe to services only when they need them. Carriers saw a similar transition with unified communications, and cloud is accelerating that trend.

That kind of change to the revenue stream presents steep challenges to carriers' existing business model, Smith says. Some carriers are succeeding with the transition by offering service bundles.

Lost control
In the pre-SDN networking model, carriers controlled the end-to-end experience for the customer. Customers and carriers agreed in advance on how the network would be used, bandwidth requirements, SLAs, and other parameters. "You'd know what the network looks like now, and you know what it will look like in six months, based on demand," Smith says.

"As soon as you turn that on its head and give the customer control -- which is what SDN promises because of APIs and portals -- it throws a big curve ball into capacity management," Smith says. SDN allows customers to configure their own virtual networks using self-service portals. "Infrastructure teams have to be sure that capacity is in place," Smith says.

Connecting to other companies' networks is another avenue to lost control. SDN is relatively straightforward to implement inside a single company's data center, more difficult on a metro and regional level, and more difficult still on a national and international level. "The bigger you get, the less control you have over what partners and their equipment are doing," Smith says. SDN and NFV offer centralized control as a benefit. "That's great when you control the environment," but problematic when you don't.

Carriers need to educate enterprise customers on the new world of virtualized networks. Change often worries businesses, who are used to the current way of doing things. "Not all customers have the scale and tech-savvy departments that know how to use this to their advantage," Smith says. "There's education to be done, and that's where telcos can gain an advantage." Carriers can gain particular advantage in the small and medium enterprise market through education.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Light Sabre
7/8/2014 | 8:03:44 PM
SDN Raises Business Challenges
@mbushong, I like your point about the moving up the supply chain with the next wave being analytics.  The changing models drive the focus to where you can add the most value (new controls).

It also seems that the ecosystem you refer to will be the result of what you need to survive these challenges, size and unique adaptability.
Mitch Wagner
Mitch Wagner,
User Rank: Lightning
7/8/2014 | 7:46:55 PM
Re: Control is interesting
@mbushong - Indeed, as we've seen on Wall Street, when you control networks programmatically the results can be unfortunate. 
User Rank: Moderator
7/8/2014 | 10:04:34 AM
Control is interesting
The point on control is an interesting one. It is likely made worse because not only are we sharing control, but we are moving from a model where control is complete and absolute. When you rely on explicit configuration to make things work, it is a big leap to move to anything that is state driven, using APIs as the intermediary. It changes the entire provisioning model in profound ways, and it will absolutely disrupt troubleshooting processes in a lot of cases. 

You would think that this will open the door to broader integration. Analytics should be the next wave of things we talk about. And integration with things like capacity planning systems will be critical. The ecosystem of infrastructure starts to mean more, which should make the competitive landscape a whole lot more exciting in years to come.

Mike Bushong (@mbushong)

Light Reading’s 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.
Wednesday, October 26, 1:00PM EDT
Security: Tackling DDoS
Gary Sockrider, Principal Security Technologist, Arbor Networks
Friday, October 28, 1:00PM EDT
Security: The Plusses and Minuses of Open Source Software
Nick Feamster, Acting Director, Center for Information Technology Policy, Princeton University
Wednesday, November 16, 1:00PM EST
SDN 101
John Isch, Practice Director, Network & Voice, Orange Business Services
Friday, November 18, 1:00PM EST
SDN & Open Source
Christopher W. Rice, Senior Vice President of AT&T Labs, Domain 2.0 Architecture and Design
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.
LRTV Custom TV
Next-Generation Technology Beyond DOCSIS 3.1

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Liu Jianhua speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Hybrid Video Solutions to Change TV, Change Future

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Ian Locke speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Huawei Future-Oriented Giga Coax Network

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Allen Wang speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Huawei at SCTE 2016

10|20|16   |     |   (0) comments

Join Alan Breznick of Light Reading and take a sneak peek at the Huawei booth at SCTE 2016.
LRTV Custom TV
Assuring Network Quality in a Rapidly Changing Environment

10|20|16   |     |   (0) comments

As the rate of change and complexity increases in agile networks, the importance of introducing DevOps methodologies for integrating active test and assurance solutions throughout the full service lifecycle becomes critical to ensure that customers are experiencing the service quality they demand. The industry landscape is changing, and software-based test and ...
Telecom Innovators Video Showcase
A10 Networks on Service Providers' Industry Needs

10|20|16   |     |   (0) comments

Light Reading's Steve Saunders hears how A10 enables service providers to accelerate, secure and optimize their application delivery to drive down costs, enhance service availability, and better respond to customer requirements, so they can improve customer satisfaction, monetize their network, and grow revenues.
LRTV Custom TV
New NFV Use Cases for Cable TV

10|19|16   |     |   (0) comments

A large number of NFV use cases are focused on the enterprise domain, looking at virtualization of customer-premises equipment (CPE). To date, there has been little focus on the use cases and business case for virtualization of the video content delivery networks required to deliver unicast and streaming video to consumers. Amdocs commissioned Analysys Mason to ...
Women in Comms Introduction Videos
Meet the Future Workforce: New Faces, Expectations & Motivations

10|19|16   |   5:33   |   (1) comment

Millennials and their younger peers, Gen Z, expect more out of their network and more out of their work. Intel's Lynn Comp shares how the industry can prepare for this new generation of workers.
LRTV Custom TV
ZTE Global Services User Congress 2016 Highlights

10|19|16   |     |   (0) comments

ZTE held its 2nd Global Service User Conference in Dusseldorf on October 13-14. Representatives from network operators, leading industry analysts and ZTE senior expertsattended the event, exploring the best practice in managed services and the vision to transform network operations into the operations center of the future (OpCF) in the software-defined networking ...
LRTV Custom TV
Cliff Grossner on Cloud & Network Synergy From Carrier Service

10|18|16   |     |   (0) comments

Local carriers offer the collaborated cloud and network service that benefits from their understanding of the regulations operating in different vertical markets.
In this interview, Cliff Grossner from IHS Technology talks about how this advanced service can support business agility and flexibility.
LRTV Custom TV
VeEX: Live from SCTE Cable-Tec Expo 2016

10|17|16   |     |   (0) comments

Cyrille Morelle, VeEX's President and CEO, talks with Light Reading's Alan Breznick live from the SCTE Cable-Tec Expo 2016. They discuss DOCSIS 3.1 technology, deployments and early lessons learned. New products on display include the CX350s-D3.1, CX380s-D3.1, CX310, AT2500-3G, FX150 OTDR and MTT WiFI Air Expert.
LRTV Custom TV
Smith Micro's Carrier-Grade WiFi Component

10|17|16   |     |   (0) comments

Join Carol Wilson of Light Reading as she interviews the CTO of Smith Micro, Dave Sperling.
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Attacks Have Major Internet Sites on the Ropes
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 10/21/2016
Trump: Dump AT&T/TW & Comcast/NBC
Alan Breznick, Cable/Video Practice Leader, Light Reading, 10/24/2016
Layer3 TV Comes to Town, Hints at Future
Mari Silbey, Senior Editor, Cable/Video, 10/21/2016
Verizon Wants More Data on Yahoo Breach
Alan Breznick, Cable/Video Practice Leader, Light Reading, 10/20/2016
WiCipedia: Grace Hopper Promotes Diversity, Girl Scouts Code & How to Thrive
Eryn Leavens, Special Features & Copy Editor, 10/21/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
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.
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
Animals with Phones
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.