Cloudifying the Telco Network
Over the past decade, born-on-the-Internet companies have created a remarkable operating model. This model enables them not only to run with impressive levels of quality and service at massive scale -- for example, serving nearly 2 billion global subscribers (for Facebook) or delivering 3-5 billion search results a day (for Google) -- but also to do so with ultra-low operating costs, by other industries' standards.
To achieve such a revolutionary change, Internet players pioneered the cloud concepts and technologies that the rest of the world is now trying to copy. It's worth remembering that Amazon originally developed AWS to drive down its own operating costs and accelerate time-to-market before recognizing the potential for a service (EC2) that the company could offer to a new set of customers.
Communications service provider (CSP) cloud has followed a different trajectory. In most cloud-owning CSPs, there is a large disconnect between the cloud infrastructure they have put in place in order to sell cloud services to enterprise customers and their traditional infrastructure and operating model, which supports the rest of their business. CSPs are only too aware that the latter are slowing them down and saddling them with margin-eroding expense, making them uncompetitive in an Internet-driven world.
So the race is on to extend cloud and its benefits to the rest of the telco -- and specifically to the network, a goal of the ETSI Network Functions Virtualization (NFV) initiative. Inevitably the industry is interpreting NFV in different ways, some of which don't involve the cloud and which may deliver incremental, but limited, efficiencies. The most advanced CSPs -- those that wish to radically transform their operating models and achieve a cost base that rivals those of Internet players -- are clear that cloud concepts such as commercial off-the-shelf hardware, autonomic automation, new application architectures and orchestration will play a major role in their networks.
Heavy Reading research shows that CSPs have a reasonably good grasp of virtualization as a first step toward NFV, but "cloudifying" the network -- which requires coming to grips with the elastic, dynamic and design-for-failure nature of the cloud -- is alien to many network organizations. Bringing the cloud into the network will require mindset, skillset and process change as well as the introduction of multiple new technologies. There are many unknowns involved in turning network functions into cloud workloads, and despite the huge strides cloud pioneers have made in the enterprise world, their approach may not be entirely applicable to the network.
The network industry faces a large learning curve where cloud adoption is concerned. And given the number of new technology components involved in enabling network functions to run in the cloud, this is not an area any single vendor or CSP can tackle on their own. The market urgently needs ecosystems -- communities of vendors and CSPs that will work together to specify and integrate all the piece parts needed for NFV. According to our research, CSPs want their major suppliers to provide ecosystem leadership. Large network equipment vendors such as Alcatel-Lucent -- themselves key sources of network functions – are well placed to lead ecosystems that have as their goal the "cloudifying" of the network, provided that such leaders are committed to a truly open collaboration with the market.
A robust ecosystem will bring together a substantial, if not full, set of vendors needed to make NFV in the cloud a reality. It will embrace competing vendors, providing service provider customers with choice and the ability to differentiate themselves in the market through the partners they decide to work with. The ecosystem should include both established players and startups, benefiting from the stability and long view of the market of the former and the innovation and agility of the latter. And it must forge meaningful relationships between members, giving CSPs confidence on issues such as functional interoperability and vendor roadmap alignment.
NFV may be in its infancy, but the speed at which CSPs say they want to adopt it is taking the market by surprise. While many CSPs are not yet thinking through the full implications of cloudifying their networks, cloud is the end infrastructure for NFV and the key means of transforming CSP competitiveness in the future. Ecosystems will be hugely important in creating the knowledge and innovation needed to apply cloud to the network domain -- a task that will require companies to work together, rather than in isolation, in the spirit of the Internet age.
— Caroline Chappell, Senior Analyst, Heavy Reading