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Carol Wilson
Carol Wilson
5/5/2014 | 9:55:37 AM
Re: Cloud will envelop the edge
"Google Fiber has already demonstrated it can profitably price at $0.00001 in the MAN" -- I'm curious what this figure is based on. Is this based on what Google is charging in KC or Utah? 

 
Infostack
Infostack
5/5/2014 | 9:43:07 AM
Cloud will envelop the edge
This is just the beginning of a fundamental restructuring of the telcos; all of whom are just balkanized islands at the edge of the core dominated by Google, FB, Amazon, et al... The restructuring will mirror what IBM underwent in the early 1990s as the Wintel model disrupted the centralized mainframe processing model held hostage by inefficient connectivity. Ironically a "reverse" situation than what we see at present where the core is significantly scaled and cheaper than the edge.

The edge providers are sitting on business models that still charge $0.001 to terminate the equivalent of a voice minute in the MAN (much, much more for wireless access), whereas the core WAN's economic rate is $0.0000004 and declining 20-40% annually. Bringing WAN-side scale to the edge and a focus on driving marginal cost down at every layer and boundary point (both capex and opex) Google Fiber has already demonstrated it can profitably price at $0.00001 in the MAN, and they have yet to scale the model to wireless offload and backhaul, SMB and the big kahuna, enterprise managed services.  (The latter will actually pay for a lot of edge investment.  A last mile 800 model.) So MAN costs can shift an additional 1-2 decimal places to the right as the scale economies of the cloud are driven to the edge.
Mitch Wagner
Mitch Wagner
4/23/2014 | 2:57:39 PM
The final bit
The final bit is the real benefit of SDN and NFV: Allowing carriers to create networks that are so flexible that customers can configure their own virtual networks on the fly, without human intervention. That will result in increased demand and revenue for carriers. Other benefits for SDN/NFV are cost savings, which are terrific, but do't grow the business. 
jabailo
jabailo
4/23/2014 | 1:29:19 PM
Re: Realistic and intriguing
Sure, I imagine the costs for SDN setup are a tiny fraction of buying and installing hardware.  It makes sense to do it even it fails entirely.

And if it does work, then think of all the instant optimizations you can experiment with which would otherwise require new purchases, equipment updates and so on.

It's hard to even imagine going back to hardware if it at all works.
Ray@LR
[email protected]
4/23/2014 | 8:24:37 AM
Realistic and intriguing
THis all makes a lot of sense and, I imagine, it's in line with what alot of operators are doing -- being cautious but explorative, figuring out what is going to work and having a rewind button/backup plan. 

Great feature.


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