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Telco Data Centers: Crisis Control

Roz Roseboro
Heavy Lifting Analyst Notes
Roz Roseboro
3/7/2014
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There's no shortage of crises facing network operators, and many of them are starting to converge in a key inflection point in carrier networks: the telco data center.

Some challenges stem from the need to adopt new transformative technologies (SDN and NFV chief among them) to improve operating efficiencies, and others are driven by external threats -- the web giants and upstarts that are now picking off telco customers. (See Defining SDN & NFV.)

Operators are fully aware that they need to move at Internet speed, but are stuck with infrastructure built for a different age. Having already helped push disruption in the compute environment, The OpenCompute Project -- with noted agile data center operator Facebook leading the charge -- is now focusing on networking. Pica8 Inc. , Cumulus Networks, and Big Switch Networks all offer pieces of the puzzle that promise to leverage high-volume (read: cheap) generic x86 boxes to support data center switching requirements.

Telco data center operators will no doubt be seduced by the possibility of dramatically lowering capex by deploying generic bare-metal switches, but will be rightly concerned about ensuring that nothing gets lost in translation. You can be sure Cisco Systems Inc. (Nasdaq: CSCO), Juniper Networks Inc. (NYSE: JNPR), Brocade Communications Systems Inc. (Nasdaq: BRCD), and Arista Networks Inc. will not go down without a fight. They, better than anyone else, understand that telcos tend to be a conservative lot, and while not resorting to outright scare tactics, will stress that both their products and their companies will be around for the long haul -- a claim that won't have nearly as much resonance coming from the upstarts.

While we shouldn't expect a telco to transform into Google overnight, we should expect to see them taking steps toward creating data center environments that are as scalable and agile as their nimble Web-based competitors. New architectural approaches to data center switching are just emerging now, which could radically disrupt the status quo. The question is whether the telcos are able to follow in the footsteps of the Facebooks and Googles of the world -- and do it soon enough -- to ensure they enjoy the same cost and capability benefits of a transformed switching environment.

In my new role as Senior Analyst at Heavy Reading , I will focus my research on telco data center transformation. There's a lot of ground to cover, and lots of crises to identify and help to resolve. Feel free to get in touch with me if you have any questions or need any assistance in sorting through this critical area that will help define network operator success or failure in the coming decade.

— Roz Roseboro, Senior Analyst, Heavy Reading

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Liz Greenberg
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Liz Greenberg,
User Rank: Light Sabre
3/7/2014 | 6:49:29 PM
Re: Opex vs. capex
You nailed it Mitch!  Too often companies focus on reducing Capex without enough regard for Opex, which can be a very costly mistake in the long run.  This does not just affect IT but all networks no matter what they transport or what they manage.
FakeMitchWagner
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FakeMitchWagner,
User Rank: Lightning
3/7/2014 | 5:23:05 PM
Opex vs. capex
Everybody loves capex, but the real value for virtual networking is in opex. That makes sense -- in IT, operating expenditures are a bigger deal for IT than capital spending. 
mendyk
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mendyk,
User Rank: Light Sabre
3/7/2014 | 3:06:01 PM
The elephant in the room
Cisco is intent on doing NFV on its own terms. There's probably a good case for doing that. Do you think standardization is the key to all this, or are standards again going to be a vague rallying point for new technologies that will turn out to be different proprietary variations on a theme?
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