Partners Ericsson and Cisco have given the Swedish firm's new CEO, Börje Ekholm, a "welcome aboard" present with a five-year telco cloud transformation deal at Vodafone Hutchison Australia (VHA).

The deal is noteworthy for a number of reasons: It's a reminder that "Ciscosson" is pressing ahead with customer engagements that can justify the collaboration, which caused unrest and upheaval within the partners but which to date has not borne much public success; it's a next-generation distributed telco cloud deployment that will be another commercial test case for SDN and NFV in a wide area network; and it will be a commercial test case for OpenStack, the cloud platform that is yet to convince many that it can deliver the goods in wide-area communications networking environments. (See NIA Tests Reveal OpenStack Version Challenges and Virtualization Confidence Takes Hit in Latest HR Survey.)

So what's going on "down under"? Ciscosson will provide virtualization technology and systems integration services that, the vendors say, comprise the biggest deal (in value) yet announced as part of the ongoing partnership, which was first announced in November 2015. (See Cisco & Ericsson Forge Killer Partnership and Cisco + Ericsson: From Soup to Nuts.)

The technology element includes: The HDS (Hyperscale Datacenter System), Cloud Execution Environment, Cloud Manager and Cloud SDN controller from Ericsson; and from Cisco, the WAN Automation Engine, Network Services Orchestrator (NSO), VNFs including IOS XR 9000v and Cloud Services Router 1000v and security technologies (virtualized and physical) such as the Adaptive Security Appliance and Cisco Firepower security gateway. Ericsson AB (Nasdaq: ERIC) will build the network for Vodafone Hutchison Australia . (See Vodafone Hutchison Australia to Transform Core, IP Networks With Ericsson & Cisco.)

The Australian operator's general manager of network engineering, planning and performance, Barry Kezik, tells Light Reading it needs this new architecture for a number of reasons.

He says the volume of data traffic on VHA's network is growing at breakneck speed (it doubled year-on-year in 2016) and that the pace of growth couldn't be efficiently managed with "the traditional way of building networks" with the introduction and addition of application-dedicated physical hardware.

Not only will the new distributed cloud infrastructure be able to better handle that general data traffic growth but it will also position VHA for the introduction of IoT traffic, capacity-hungry applications such as Ultra HD video and virtual reality and prepare the operator's IP network for the migration to 5G. Kezik believes the new cloud architecture, which has been in the planning process for about two years, will also enable the introduction of new applications and services (especially for the enterprise market) and reduce the time it takes to bring those services to market.

In addition, VHA, the number three mobile operator in Australia with about 5.4 million customers, believes it will be able to reduce its capital and operating costs (capex and opex) with the introduction of SDN and NFV capabilities and COTS-based (white box) hardware. "We're the first in the Vodafone group to migrate to an OpenStack environment," says Kezik.

All of which sounds very positive, so exactly what kind of efficiencies will VHA achieve? Kezik didn't want to talk about the financial details: The value of the deal is not being disclosed and, following a number of questions about how and when VHA would benefit from capital efficiencies, he declined to discuss the capex situation. Ericsson also declined to discuss any numbers.

Kezik did note, though, that despite Ericsson being the incumbent provider of VHA's core network and Cisco Systems Inc. (Nasdaq: CSCO) being a prominent supplier for its existing IP network, the Ciscosson partners still had to take part in a full RFI and RFP process before landing the deal. (See Vodafone Australia Taps Ericsson for IP Transition.)

The other companies in the bidding process were described by Kezik only as "the usual suspects" -- so that'll be Nokia and Huawei.

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Having won the deal, though, Ciscosson can get on with building VHA's new telco cloud and, in collaboration with VHA, migrate applications over to the new platform during the coming five years. The rollout will include the addition of new data center locations: VHA currently has six centralized data centers covering Australia but the new architecture will be far more distributed to "bring content closer to the customer and to reduce latency, which will improve the customer experience." Ultimately, VHA expects to have anything up to 100 data center locations housing mobile edge computing (MEC) and other local storage and compute capabilities. (See The Future Is Foggy – HR Report and Will the Fog Roll In During 2017?)

And Kezik is confident that OpenStack is up to the task of delivering carrier-class performance. The VHA executive says that the combined efforts of both Ericsson and Cisco will be able to deliver a reliable OpenStack environment, while Craig Kesby, director of the Vodafone account at Ericsson Australia & New Zealand says that, as the systems integrator, Ericsson will be taking on responsibility for ensuring the OpenStack-based cloud platform can meet the operator's needs.

As a result, the VHA deployment will likely come under scrutiny from a number of angles: Within Vodafone, other operating units will want to monitor the progress of the new architecture, to see if there's anything to learn for their own transformations that will come as part of the operator's global Ocean virtualization project; other operators and vendors will want to see how this deployment plays out, desperately seeking commercial proof points for carrier SDN and NFV; and the teams at Cisco and Ericsson, including Ekholm, will be hoping they have a joint hit on their hands to show to other prospective joint customers, their boards and investors. (See Vodafone: Desperately Seeking Cloud-Centric Tech and Börje Ekholm Becomes Ericsson CEO.)

— Ray Le Maistre, , Editor-in-Chief, Light Reading