& cplSiteName &

SDN Raises Business Challenges

Mitch Wagner
7/8/2014
50%
50%

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.

Pay-as-you-go
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.

Education
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
DHagar
50%
50%
DHagar,
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
50%
50%
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. 
@mbushong
50%
50%
@mbushong,
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)

Plexxi
From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
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
VeEX at ANGA COM

6|27|17   |     |   (0) comments


At ANGA COM 2017, Cyrille Morelle, president and CEO of VeEX, updates Alan Breznick with VeEX's new products and technology. This includes VeSion cloud-based platform for network monitoring, AT2500-3G advanced spectrum analyzer and MTTplus-900 WiFi Air Expert module. He also comments on DOCSIS 3.1 deployment and Remote PHY technology.
LRTV Custom TV
The Overall Objective Is to Win the Game

6|26|17   |     |   (0) comments


SCTE•ISBE's Chris Bastian discusses Energy 2020's success to date and the importance of a flexible approach that allows for changes in specific strategies in order to reach significant milestones.
LRTV Interviews
CenturyLink: Let's Get Past SD-WAN Hype

6|23|17   |   04:02   |   (0) comments


Technology becomes a "shiny object" unless it's properly focused on solving business needs for enterprise customers, says Bill Grubbs, network solutions architect for CenturyLink. He explains to Light Reading why SD-WAN deployments have to be tailored to specific needs – and more.
Women in Comms Introduction Videos
Infinera's Sales Director Paints Tech's Big Picture

6|21|17   |   4:14   |   (1) comment


Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
LRTV Custom TV
SD-WAN Innovation & Trends

6|20|17   |     |   (0) comments


Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
LRTV Interviews
Ovum's Dario Talmesio on 5G in Europe

6|20|17   |   02:16   |   (0) comments


At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
LRTV Custom TV
Putting Power on a Pedestal

6|19|17   |     |   (0) comments


ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
LRTV Custom TV
Gigabit Access: The Last-Mile Pipe for All Future Services

6|19|17   |     |   (0) comments


A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
LRTV Custom TV
Key Factors to Successfully Deploy an SD-WAN Service

6|19|17   |     |   (0) comments


As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
LRTV Custom TV
IoT Solutions: Rational Exuberance

6|19|17   |     |   (0) comments


IoT solutions are morphing from hype into viable business opportunities. Huawei has the platform and ecosystem support to help carriers successfully address new business opportunities in the IoT space.
LRTV Custom TV
Realizing ICN as a Network Slice for Mobile Data Distribution

6|19|17   |     |   (1) comment


Network slicing in 5G allows the potential introduction of new network architectures such as Information-centric Networks (ICN) as a slice, managed over a shared pool of compute, storage and bandwidth resource. Services over an ICN slice can benefit from many architectural features such as Name Based Networking, Security, Multicasting, Multi-homing, Mobility, ...
LRTV Interviews
Ovum's Mike Roberts on 5G Uptake

6|19|17   |   04:08   |   (0) comments


Mike Roberts, research director for Ovum's service provider markets group, explains why he has boosted his 5G subscriptions forecast.
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Montcalm Marble Arch
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
No Imagination: UK Chip Biz Goes Up for Sale
Iain Morris, News Editor, 6/22/2017
Does AT&T Deserve Time Warner?
Mari Silbey, Senior Editor, Cable/Video, 6/23/2017
Netflix's Lesson in Culture Expectation Settings
Sarah Thomas, Director, Women in Comms, 6/21/2017
Kalanick Steps Down as Uber CEO
Sarah Thomas, Director, Women in Comms, 6/21/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.