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Analyzing Telco SDN/NFV Offers
Curtains up on new service platforms
Summary
In brief
Telcos are lining up their first SDN-based platform offers for commercial rollouts. Enterprises should
analyze them for differences in technical architecture, vendor partnering and customer services
support. This paper aims to help guide enterprises toward their choices.
Ovum view
Software-defined networks could be a watershed for enterprise services. SDN and network functions
virtualization (NFV) offer the possibility of a new generation of services and service delivery to
business users. Telcos will be well-placed to provide those new services, both as private networked
managed services and private-to-public cloud services, based on their investments in open platforms
and their partnerships with software and systems vendors.
Key messages
SDN-based platforms will dramatically accelerate provisioning of networked ICT
services, and give users control of that faster provisioning process.
New platforms will open networks to digital applications and software-based services
e.g. in social networks and media.
Enterprise network managers and business unit managers will get more efficient use
of network and ICT budgets, as well as more rapid deployment of resources into the
business.
Telstra’s open Dynamic Network, recently enabled for SDN/NFV via their joint
initiative ’Symphony’ with Cisco, is an early debutant and will link directly into
business operations and go-to-market requirements across a range of BU managers.
Open networks, open source, open thinking
Ovum research indicates that enterprise CIOs, telecoms and IT managers all see potential business
advantages from operating with software-defined networking. The chart below shows the expectations
of companies based in Asia-Pacific, which are among the highest for enterprises globally.
Figure 1: Enterprises expect major operational benefits from SDN
Source: Ovum
It is not surprising therefore that in regional-to-global managed services contracts that we have
tracked over the last two to three years, the services chosen have most commonly included a
combination of flexible and agile network features. In the technical solution, the features of services
that are most in demand/at the forefront of the RFP/contract requirement are:
1. Optimization - for example, of WAN performance or applications traffic management across
the network and in data center/cloud transport journeys;
2. Business continuity management (BCM) – typically appearing as managed security, business
continuity or disaster recovery;
3. Applications delivery and/or virtualization – especially to improve the business-connectedness
of end-user applications and to ensure workspace efficiencies and good governance around
core business applications.
Figure 2: Applications-centric networking: Key requirements in the RFP
Source: Ovum global services contracts analysis
All in all, there’s a strong correlation between network performance and business performance.
Fortunately, the next generation of software-defined dynamic networks makes it potentially much
easier to match these network and business requirements:
N=915 companies in Asia-Pac
Source: Enterprise Insights survey 2014
22%
25%
26%
30%
42%
43%
0% 10% 20% 30% 40% 50%
Provide new billing models e.g.usage based billing
Improved SLAs
Improved self-service provisioning
Reduced lead time for newservices and change requests
Provide more service flexibility(e.g. variable bandwidth)
Improved integration with cloudservices
What are the most important benefits that SDN (Software Defined Networking) could provide to your organization?
Secure our business
Optimize our networks
Virtualize our apps
Enterprises want security as a key feature in services, underpinning everything from transport
to applications and individual users:- with SDN and NFV technologies, telcos have the means
to build high-performance networks and services that provide flexibility and security of
enterprise managed services on demand.
Enterprises want bandwidth and connectivity to meet their galloping requirement for data
center-hosted services and cloud services interconnection:- telco SDN and NFV solutions are
dynamic and adaptable to bandwidth-hungry applications as well as large distributed
computing, big data and mobility requirements across the network.
Enterprises want new services out of the next-generation network, both their own and the
telcos:- the telco SDN platform is a foundational capability for provisioning existing services
faster, but also for faster development of new types of services, as well as adapting and
refining existing services to take account of the way they are consumed.
Open Telco
The technical solution
We see an emerging model for a dynamic, software-driven networking platform for enterprise
managed services that comprises:
End-to-end network system – with regional-to-global connectivity; a data center estate or
infrastructure for hosting and sharing private cloud resources and managing dedicated
business IT; cloud services interconnect for secure access to public cloud resources from
Amazon and Microsoft; multiservices access across fixed and wireless technologies including
fiber, xDSL, WiFi and 4G/LTE.
Software-based operations environment – for dynamic management of all the elements of the
E2E network described above. This framework provides all the tools and processes for
coordinating or orchestrating services, like security and billing and policy management, and
automates them as far as possible for speed of transaction, in a highly virtualized setup.
Experience of network management, IT process standards, and knowledge of vendor
technologies in existing and established networks and relationships are crucial factors for
ensuring reliability of service.
Applications-centric service development environment - this allows users to define their
requirements, allocate resources and connections, and monitor the deployment and usage of
those services. Key here is ensuring the user-administrator gets the most effective use of
applications for the business and that end-users make the most effective use of their time in
the network service environment.
From the enterprise point of view, service providers should be able to demonstrate respectively: the
evolution and expansion of advanced networks; capability to develop or collaborate in software-based
programs; and to show they have built solutions for customer’s own applications, for example security
for a financial services provider with a proprietary trading application.
Much of the industry’s attention has been on the software environment in the past three years since
SDN and NFV technologies emerged and network equipment vendors and operators started
marshalling their own organizations and their partner relationships in support of a roadmap toward
SDN/NFV services. But the networks and applications environments around the new software-defined
engine room are just as important for the end-user outcome. Without them, users will miss the biggest
benefit of the dynamic, virtual network, which is to make it an extension of the business itself.
Making the solution stack-up
Not all telcos have gone so far as to build their own SD-based solutions architectures; a framework
they own and can develop, within which virtualized network functions can operate to produce new
services on demand. Some may have been in a hurry to launch SD-WAN or hybrid VPN services and
are either reselling a new technology provider’s solution, or incorporating that solution in the telco
network as an overlay service, or they have quickly assembled a portfolio of component technologies
from different vendors, in order to make their own ‘stack’, resembling an SDN.
The figure below is our impression of what a robust SDN architecture should be capable of in the new
configuration of a fully-integrated telco network. It represents a culmination of two strategic investment
efforts: 1. Operators pushing more software into their infrastructure, with the intention of adding
greater ‘intelligence’ to the network; and 2. Operators and their primary technology vendors together
bringing to market their new service delivery combination.
Figure 3: A user model for a telco SDN architecture
Source: Ovum
In this model, the former ‘workhorse’ that simply transported packets from A to B is now a dynamic
network that can interpret and handle data in a much more sensitive fashion. The network will offer
application-specific service guarantees and may also apply deep packet inspection (DPI), which helps
a network controller to route traffic by reading the content of message payloads. A service-orientated
approach is deployed throughout, tightening the relationship between the network and the application.
Fixed networks & the ‘Internet’
Mobile networks
Internetservices
Fixed networks & the ‘Internet’
Mobile networks
Internetservices
Software & content
Software & content
Portal and intermediary web services Portal and intermediary web services
Ind
ustr
ializ
ed s
erv
ices
Services
Authentication DRM Portal
Directory Presence Location
Call recording Storage Profile
Services
Authentication DRM Portal
Directory Presence Location
Call recording Storage Profile
Single IP network
Third party
applications
Telco
‘channel ’
applications
Telco ‘in
house ’
applications
Customer
applications
Third party
applications
Telco
‘channel ’
applications
Telco ‘in
house ’
applications
Customer
applications
Control elements
Billing QOS Control
Security mgt Network equip AddressID mgt
Customer ID Encryption Connectivity
Session control
Control elements
Billing QoS Control
Security mgt Network equip AddressID mgt
Customer ID Encryption Connectivity
Session control
Open A
PIs
and
telc
o o
wn S
DK
s
Typically, IMS (IP multimedia subsystem) allows the infrastructure and services to be combined –
enabling the simultaneous use of voice, data and content across multiple networks (fixed, internet and
mobile) and devices. At the center, the intelligent network orchestrates all user sessions – users can
hand over services from device to device (e.g. mobile handset to softphone), network to network
(fixed to mobile network) and service to service (instant messaging to video conferencing).
Increasingly, the end user controls their communication preferences via an online portal, choosing
how communications are terminated. For example, voicemail could be sent to a mobile device via
SMS, or a fixed call routed to a mobile and so on.
Underpinning these capabilities is a common set of ‘network-embedded’ applications and services.
Presence, location, user authentication and voicemail, serve multiple end points, giving a common
user experience and simplified management techniques for the enterprise.
For the user, a software-defined telco network will offer an integrated communications
experience with single sign-on and user/number recognition, combined with a common set of
applications –for example CRM, business process and employee tools- that support and are
integrated with any enterprise device, and provide secured access to a range of cloud and
private data center-based applications.
Other IT management services are also provided on a network-embedded basis - for
example, load balancing, call recording, storage, user directory and rights & authentication.
Many services will be available on-demand and can be dynamically provisioned.
Finally, the separation of transport from service creation and control planes allows the telco and its
vendor partners to link services and communities together. This federated telco network draws upon
resources outside of its immediate domain and orchestrates the service across the supplier
ecosystem. The SDN unites services, whether they are off-net or on-net. Cloud-based services such
as mash-ups can be presented through an internally managed enterprise application. Or Internet-
based Skype for Business could be delivered on top of an internal CRM application to offer click-to-
call features to contacts. This functionality addresses some of the key issues for enterprises in
deploying Internet-based services, in that they often cannot be managed centrally, are insecure, and
have limited resource and systems for user support. Federation of Internet-based services in this
fashion by the telco will offer improved management features, support services and security
robustness by exploiting SDN and NFV service functionality.
Telco case study
Spotlight on Telstra
Telstra is one of the first top tier telcos to point the way in SDN/NFV services. The Symphony
Initiative, based on its collaboration with Cisco, not only showcases the Australian telco’s emerging
network portfolio; it has produced the first major service on its global platform, boosted by its
investment in PEN, an SDN-based fiber network and data center operation in Asia-Pacific which is
being extended across major hubs in the United States and Europe. PEN’s open network, cloud-
network integration approach means it can offer network services between data centers, other
networks, and cloud resources. Its self-service managed services approach means it can offer
enterprise users the ability to provision services, get immediate pricing, control bandwidth, and select
different levels of services.
Open standards
Telstra is working with the Open Networking Foundation’s Open Standard Architecture. OpenStack
and OpenAPI seem to be two of the main developer technology components in this stack, but just as
important is to have a coherent combination or configuration for these technologies to do their job.
The OSA looks like the benchmark for a working model of a service provider platform for SDN/NFV
based services. Openstack is an open source set of tools for managing and building cloud computing
platforms and is a good way of creating an ecosystem for integrating multiple vendors together, as
well as sharing costs across the industry. The scale of adoption and sheer number of developers – an
estimated 4,000 developers and 400 companies contributing – has attracted influential technology
vendors like Cisco, Dell, Intel, Rackspace and Red Hat. For telco, Openstack is an important tool for
virtualization of routers, firewall and other formerly-hardware based services.
Open network
Telstra’s open network platform is built on a unified services fabric (USF), employing the services
orchestrator we described above. This uses APIs to connect networks and cloud services for
example, and provide the dynamics across the telco services infrastructure. Telstra’s USF will provide
a global controller platform to call up and combine services from component network platforms: those
of Telstra’s global carrier services, its recently acquired regional SDN-based operator Pacnet, and its
domestic Australian fixed and wireless broadband networks as well as international operating
networks in Hong Kong for example. This will in particular allow faster provisioning of services from
compute (IT infrastructure as a service), together with applications or ERP, and communications, in a
Network as a Service (NaaS) combination.
Open thinking
Telstra’s SDN platform is a programmable network in which new services can continuously be
developed, and not an overlay network that uses some package of proprietary technologies to support
a defined set of additional services, for example hybrid or Internet WAN. Telstra is working with Cisco
technologies in its builders’ yard, in particular Cisco’s Virtual Managed Service (vMS) hosted platform
that includes compute rack servers, Nexus-series data center switches, and ASR 9000-based WAN
routers. Across these, Cisco’s Evolved Services Platform provides tools for service automation,
network service on-boarding and virtual network function packages including lifecycle and resource
management, and NFV infrastructure authorization and validation processing. Cisco is also providing
its Tail-F technology for configuring and orchestrating network services, a technology it acquired but is
maintaining as an open source for multivendor applications, so it can continue to adapt Telstra’s and
Telstra customer requirements.
The First Products
The first product to be developed out of the Telstra/Cisco VMS environment is Internet VPN, a purely
public network service that uses multipoint tunneling for secure and fast data transmission. Just as
important, Internet VPN offers a dedicated user portal developed jointly by Telstra and Cisco, to raise
the level of customer experience in the service. Internet VPN features a dynamic combination of Cisco
ASR series routers, Cisco Adaptive Security Appliance (ASA) firewall technology and Cisco Web
Security Appliance (WSA) secure web gateways, all presented and manageable in software form i.e.
virtualized so they can be managed directly from a customer private network environment.
The second product, Cloud Gateway Protection, uses cloud-enabled next generation security
appliances that can be deployed and configured in minutes to secure multi-cloud, internet and Next IP
against malicious attacks, inappropriate usage, and unauthorized access.
Telstra has also announced a layer-2 Ethernet based point to point connectivity between domestic
and global data centres, called Data Centre Interconnect. This will work across the existing global
footprint of PEN and extends the domestic footprint to 10 data centers. The solution will enable
businesses to instantly set up point-to-point links between domestic and global data centers, configure
them on-the-fly and choose from a variety of pay-as-you-go, flexible contract terms, all from the same
portal.
Symphony and the end user
Telstra’s SDN/NFV services will likely interest its Australian business customers first. An Ovum survey
of Australian companies in 2015 found they had high expectations of business benefits from SDN and
NFV technologies.
Figure 4: Australian business expectations from SDN/NFV
Source: Ovum
It is clear that software-defined networking and the service performance advantages that can be
derived from it are top priorities for enterprise users in Telstra’s home market. Capital and operating
cost reduction are still important, but they will not matter if they do not deliver operational
improvements and business efficiencies.
Conclusions
Among the messages we take about telco service differentiation from the Telstra example are:
Telstra is using Cisco VMS as the construction yard for its SDN/NFV portfolio development.
From our experience with other telcos/network service providers, most are enlisting
intermediary service providers to overlay their proprietary software-defined VPN services.
Telstra is using the Cisco tools but not the Cisco network, or intermediate versions of Cisco
Which of these are significant drivers of your network evolution or investments?
1. Improve application performance
2. Improve security response
3. Big data projects
4. Virtualize network functions and SDN
5. Business continuity and back up initiatives
…………………..
9. Reduction of Capex and Opex
No of respondents 328
network, to create and deliver the SD version of services. This is significant because it means
Telstra stays independent in the service and applications developer roadmap, leaving room
for further integration of network services and even automatic allocation of bandwidth and
class of service appropriate to the cloud application or end user.
Telstra’s use of industry-wide standards Openstack, and in particular the USF framework, are
designed to provide a common platform across Telstra Global, PEN and local Opco networks
e.g. in Hong Kong, so that any users under contract will be able to access the range of SD-
type services as if these were the same network.
The Symphony Initiative roadmap will provide ongoing integration or coordination of existing
BSS/OSS e.g. applications assured network, across the Telstra software-defined network.
Symphony will have its own BSS and portal, which will interface PEN, and its own BSS and
portal; Telstra’s users will get single-pane service across both. A recent announcement on
collaboration between Ericsson and Cisco shows how the dynamic management approach
can be extended to encompass BSS/OSS.
Internet VPN is first in what will be a series of SD-based network services. Other telcos have
launched SD-WAN and hybrid WAN services that mix private and public Internet for optimum
traffic/cost efficiency, but Telstra’s offer uses only Internet yet maintains business-grade
SLAsbetween the operator and customer..
User checklist Enterprise network managers, CIOs and business unit directors with an interest in equipping their
local end-users with superior ICT, and a competitive advantage, should consider what SDN-based
platform technology their primary services supplier is using, and what features it supports. As we have
outlined, it is reasonable to expect a range of new services, delivered in a new framework that makes
business operations easier and more efficient. However, the user organization (from telecoms and/or
IT unit to procurement and/or finance departments) should also consider what their supplier is doing
around the technical solution, as there are also important requirements in the end-to-end (E2E)
services wrap:
1. Your SDN service provider’s platform should be built on an Open Strategy for E2E operations
and service delivery – Open Network, Open Source, Open Thinking.
2. The operator of your SDN platform should have an E2E operation of their own; they should
own all the pieces of the network ICT puzzle, not just some of them, and have agility and
flexibility at the core of the network management.
3. You should be offered an E2E customer experience, with provisioning and usage made
simple, from a single supplier.
4. Your supplier should be a reliable and secure operating partner, able to demonstrate reliability
and reputation.
5. Your operator should have operations experience in the portfolio of services that are offered
out of the SDN-based platform or as NFV-type services, from WAN optimization, applications
acceleration and assured networking, firewall and other security services like DDoS, as well
as monitoring and performance analytics, user portal and business analytics.
6. Your operator should have E2E billing and operations support systems (BSS/OSS), and to
show an order-to-bill (OTB) measurement process, with metrics and roadmap for improved
performance in your service management.
7. Your service provider should also have an E2E customer support, from sales to continuous
improvement program (CIP) in the service level agreement. This is especially important for
helping enterprises with mixed estates of legacy network technologies and/or data centers
that will need to be catered for by the SDN platform, until they can be upgraded to the same
state as more advanced technologies in the network.
8. Finally, your operator should have an E2E vendor partner program. Partner relationship
management will be key for stable operation of the SDN platform, and your operator should
be able to show a good track record in partnering and project management.
Appendix
Further reading
Title of report or forecast in italics, Product code (Month YYYY)
“Title of opinion or research note in quotation marks,” Product code (Month YYYY)
Author
David Molony, Principal Analyst, Enterprise Services
Ovum Consulting
We hope that this analysis will help you make informed and imaginative business decisions. If you
have further requirements, Ovum’s consulting team may be able to help you. For more information
about Ovum’s consulting capabilities, please contact us directly at [email protected].
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