Telecom hardware and software vendors are well aware of what their network operator customers want as virtualization takes hold. But many of them are telling me the industry in general needs to sort out some critical issues around core business processes before everyone can move forward.
Issues around how open source software is consumed, the need for better software licensing processes and balancing the resistance to vendor lock-in with the need for vendor support are all common knowledge at this point. Many of the vendors with whom I speak point to a broad uncertainty as to the best way to address these challenges and concern that it can't be on a one-off basis.
For example, as Kevin Woods, director of product management at Brocade, told me way back in September, the industry needs to be looking at new business processes around open source distribution and issues such as intellectual property rights.
"There's the simple notion that the vendor will stand behind the distribution and be open source, but there is a whole second tier around business models and where the value is, and what role the intellectual property plays and who owns derivative works," Woods said. "I think the industry has to sort that out yet. We are making progress as individuals but I would like to see the industry talk about this more."
An adjacent issue is keeping both vendors and operators disciplined around how open source is used. "There is a great temptation to corrupt the code," Woods commented. "You just tweak something because your customer is asking for it, and customer satisfaction is important."
The problem comes when that "tweaking" isn't fed upstream into the open source group to become part of the ongoing effort. As Santiago Rodriguez, vice president of engineering and head of the Product Development Unit SDN & Policy Control at Ericsson explained, also last September, the resulting "forking" of the open source causes great pain when it comes time for the next open source version to be released because compatibility is lost. It's why Ericsson moved from having its own version of OpenDaylight to an "upstream first" mentality fairly quickly, he said.
But having discipline around those kinds of "tweaks" is a responsibility vendors and operators share, Woods notes. If operators shop around for the vendor willing to tweak the open source code to their advantage or even just buy one vendor's version of open source, they undermine the process entirely.
Another major issue for operators was the notion of software licensing and how to control what is becoming an unwieldy process of managing licenses, particularly as applications scale. Operators are looking for a more efficient and yes, likely cheaper, way to handle this. At minimum, they want to insure they aren't just swapping out hardware costs for software costs.
The problem, according to three industry veterans, is that it's not clear what will substitute for today's processes.
Gabriele Di Piazza, vice president of solutions of the Telco NFV Group at VMware Inc., has heard from his network operator customers on this issue, and says his company is trying to respond to customer demand for relief from licensing each instance of software as it is spun up.
"We have seen requests for alternative software licensing processes, but in many cases, the operators are not ready to purchase software licenses in other ways -- based on capacity or a subscription model," he says. "We are very open to other procurement models."
ADVA Optical Networking's Ensemble unit has run into the same challenge, says its CTO, Prayson Pate, and Michael Heffner, its vice president of product line management.
"Suppliers are going to have to change based on what operators are looking for and the thing we see them looking for is flexibility," Pate says. That includes flexibility in the way the software is delivered and how it is priced.
"We were at a meeting with a current customer and they didn't know how they wanted to take delivery of our hardware and software," he says. The variables included how to handle integration of that ADVA's software with white box servers and other third-party virtual network functions, Pate notes, and how VNFs would be delivered. "The final piece is that they wanted to eliminate some of the complexity in licensing, and create a licensing process based on when VNFs are populated."
Sorting out how to do that is also challenging, says Heffner, as there are multiple options, including perpetual licenses, which can be treated as capex, and usage-based variable licensing that can be treated as opex. There are different subscription models, depending on the software involved, and there is also the price of ongoing support and maintenance, which comes on top of even a perpetual model, but can be billed separately or bundled into a monthly price.
Vendors want to meet customer needs in the simplest way possible, say both Pate and Heffner, because it makes no sense to create barriers to buying their products. At this stage of the game, however, it isn't always clear to the operator which approach is going to be better in the long run.
Heffner says uncertainty around the best approach to licensing, pricing and other business process issues is slowing down virtualization deployments.
"Most of our conversations with customers are not around how does our stuff work, it's around how to operationalize this at scale across 100,000 nodes," he says. "Licensing falls into that same domain – it's the next bit of muck everybody is stuck in."
Ciena's Kevin Sheehan, vice president of global solutions for its Blue Planet platform, thinks most of the confusion around software pricing and licensing can be solved with a menu of options from vendors, including both perpetual and subscription choices, but admits there is still some uncertainty on the operator side as to which is better.
"They have a bias as to what they think is best," he tells Light Reading in an interview. Most often that bias is against subscription models, since they impact opex. "I have seen a number of service providers change their minds once they fully understood the model and they got closer to their actual business case and to what they were turning up. They start out steadfast in the perpetual approach, then switch 180% into a usage-based model."
So one of the issues for 2017 for operators may well be conquering these business case questions to speed up their virtualization transformations.
— Carol Wilson, Editor-at-Large, Light Reading
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