SDN and NFV Developments within the Telecommunications ... · SDN and NFV Developments within the...

HUAWEI TECHNOLOGIES CO., LTD.

Date: November, 2015

SDN and NFV Developments within

the Telecommunications Industry

Content

1 Pressures on Telecommunications Operators

2 Examples

3 In Conclusion


The Telecommunications Industry is at a turning point

Commoditization of Traditional Services leading to Revenue Decline

Explosive Demand for Ubiquitous Connectivity

Smart Phones & Consumerization of IT

Increasing External Competition from OTT Players & IT Companies



New Players Undermining Old Business Models

Present

Op

era

tor

CP CP App App App

Consumer

(Smart Phone – VAS)

Enterprise

(Cloud)

New players & New business

models restructure value chain

Closed value chain dominated

by carrier operators

Operator

CP CP CP CP CP

Billing Pipeline MKT IDC

Consumer

(Feature Phone)

Enterprise

(IDC)

Past

OTT Applications

Will cause the

telecommunications

Industry to lose a

combined $386B

between 2012 and 2018 Source: OVUM

Who are the OTT Players?

VOIP & MESSAGING

PLAYERS

OTT Players

SOCIAL NETWORK

PLAYERS

CONTENT &

STREAMING

PLAYERS

APPS

ECOSYSTEM

PLAYERS

OTT

Segmentation


Where do SDN and NFV fit into this picture?

Revenue Generation

• Leaner operation • Fast GTM , from months to days,

even seconds • Open platform to build eco-

system and integrate internet players

• Drives innovative services

Cost Saving

• Prevent vendor lock-in • Prevent SI lock-in • From network function

dimension from HW/SW/Service dimension to build new vendor list

Operation Improvement

• Automation maintenance base on big data with soft probes

• One stop network configuration

• Central and flatting traffic management with virtualization and cloud computing


The benefits SDN/NFV brings to Telcos

NETWORK ARCHITECTURE REVENUE COST

68% ↓ lower cumulative CAPEX No over-investment in

capacity Scale dimensions

independently

67%↓ Lower cumulative OPEX Large environmental

savings Service contract savings

SERVICE

Bring new services

Easily launch innovative and differentiated services

Improve customer experience

Before

15 months Application based solution

After

6 months Advanced NFV solution

Before:

3 separate platforms to

manage

After: Only 1

platform


A Time line of Telco industry SDN/NFV development

2013 2014 2015 2016–2020

Operators, vendors learn

in the lab

Few field trials

Vendors productize

SDN and NFV software in

operator lab trials

A few more field trials

~10 commercial

~15–20 more commercial

deployments

Many operators deploy

1 or 2 use cases

(contained domains)

Operators deploy several

SDN and NFV use cases,

then more each year

PoCs Field trials Commercial deployments Wider-spread commercial

deployment


SDN/NFV Telco deployment plans - 2015-2017

The top 4 NFV use cases carriers plan to deploy in 2015-2016

vPE

Business vE-CPE Service chaining

vNPaaS

The top 4 SDN targeted network domains for deployment by 2015-2017

Cloud services offered to

customers

Within the data center

(DC)

Between DCs—data

center interconnect (DCI) Access for businesses

Operations and

management Metro aggregation

Mobile backhaul Fixed access, BNG/BRAS

Metro optical transport Core optical transport

MPLS backbone core Multi-layer transport

vCDNs

Mobile core, vEPC Consumer home

environment

vIMS core

vBNG

GiLAN vRAN

Consumer fixed access

① ②

③ ④

① ②

③ ④


SDN/NFV changes the entire value chain

Telco operators

Simple network

(3 to 1 platform)

Fast GTM

(15 to 6 months)

New revenue

60%+ cost saving

Multi-Vendor environment

• 86% of operators will buy SDN from telecom equipment vendors

• 75% of operators will buy NFV from telecom equipment manufacturers

• BUT 50+% operators would prefer more suppliers. It is time of Multi-

vendor

Reduced networking costs

Improved integration with cloud

services

Service/Bandwidth on demand

Enterprise customer expectation

Reduced lead time for new

services

Improved SLAs

Improved self-service provisioning

Providing new business models

Content


2 Examples

3 In Conclusion


Summarization of main SDN/NFV deployment strategies

Service-led strategy

• Investment for a new service

• Build in greenfield, isolated from exited network

80% 15%

Lifecycle-upgrade strategy

• Investing in upgrading infrastructure with VNFs to replace physical ones

VoLTE base on vIMS in 2014

5%

Platform-migration strategy

• Defines a scalable virtualization platform

• Migrates VNFs and services onto the platform over time

• Avoids the past practice of creating deployment silos.


SDN/NFV are still maturing

1. Simplification and automation of service provisioning

2. Simplification and automation of network

provisioning

3. Service automation

4. E2E service management/control

5. E2E network management/control

1. Service and revenue agility—new revenue

2. Operational efficiencies—OPEX reduction

3. Using commercial servers rather than special purpose

network equipment—CAPEX reduction

4. New service/efficiencies not possible with current technologies

5. Use Commercial servers, not network equipment

SDN NFV

1. Immature technology

2. Existing networks/processes

3. Lack of knowledge/training

4. Cost

5. Immature standards

1. Products not being carrier grade

2. Finding and training staff

3. OSS/BSS for NFV

4. Unknown TCO

5. Integrating NFV into existing networks

Top5 drivers

Top5 barriers


SDN/NFV business development examples

KDDI Wi2

E2E SDN/NFV case shows service migration and innovation

AT&T Domain 2.0

Super carrier

Operation transformation.

Telefoncia UNICA

DCaaS

vDC migration plan

SDN/NFV lab

DT Pan EU

Pan EU base on SDN/NFV

Centralized management and flexible service configuration

Vodafone

Consumer Focused service

Improve efficiency and TTM

1 2

3 4

5


Drivers: Increasing Traffic, Market Competition and Customer

Demands

1

4

2

3

Prevent suppliers lock in

New market opportunities after acquire

DirectTV and Mexico operators

Intense Competition from Verizon,

challengers , and OTT players, especially

Google Fiber

Data traffic on AT&T wireless network has

increased dramatically, (1000 times from 2004,

2X video in 2014)

Driving

Forces

Key Objectives

By 2020, AT&T plan to virtualize and control

over 75% of network using SDN

Cost reduction and flexible operation to better compete the peers and OTT players

Generate new revenue from innovation by emerging technology

Simply suppliers management


Domain 2.0 – AT&T’s Transformation Initiative

Domain 2.0

❶ Future Network ❷ Operation methods ❸ Sourcing Approaches

Internal technology groups

have been combined to

eliminate the prior distinction

of IT and network functions

More of a “dev ops,” agile

development culture

User-defined Network Cloud

Strategy

Network on Demand capability

supported by SDN/NFV is

available in Ethernet at first,

then Internet VPN and VoIP

Move all services to IP by 2020

Select core vendors in 10

domains

Target Simplify network

operations

Reduce CAPEX and

OPEX Develop own software

create new innovation

centers

Target


Domain 2.0 to redefine AT&T

1. From physical to virtual

• Static, silo resources to Elastic, agile & real-time instantiated and released

• Network to user experience focus • Long cycle upgrade to continuing improvement

2. Redefined vendors into 5 categories

• Redefined vendors into 5 cats.

• Commodity HW • Software vendor • System Integrator • Partner Vendor • Startups (Small)

3. Own API development model

• From system standard to component standard • From waterfall to agile development • From vendor limited to more developer involved

4. Internal organization change

• CT and IT group combined

• Add 100 ~ 150 more

people to support • High priority • About 2,000 people now


Example: Network On Demand

First software defined network service of its kind in the US

Customers can easily add and change services in near real time

Becomes the foundation of AT&T for business customers

Scenario 1

Contracting and ordering of network services

Scenario 2

Dialing up or down broadband speeds

Scenario 3

Provisioning new communications ports

Action 1

Intuitive and

immediate click

Result 2

In near real time instead of hours or days

Result 3

In days compared

to weeks

Network On Demand - launched in Sep. 2014, and available in 100+


AT&T’s SDN/NFV is not limited to the DC domain

Nov.2013

Sep. 2015

June 2015

Data Center

Optical Network

Wireline broadband access

Domain 2.0

“User-defined network cloud” strategy

“Network On Demand” product

Announced adopt of vOLT

First steps in SDN/NFV. Selected several vendors to develop SDN/NFV features and functions for AT&T network

Using a self-service online portal, business customers can manage their network service in near real time

Enable cost-effective optimization of FTTP-

related equipment

Notes: vOLT is virtual GPON optical line terminal for AT&T GigaPower initiative, and OLT would become open hardware

Domain Activity Result

Feb.2014


By 2020, AT&T will become a software company as well

Becoming a Software Company

Phase 1

Virtualization

Phase 2

Disaggregation

3 Steps to successful virtualization

Separating hardware and software functionality

Separating network control plane and forwarding planes

Improving management of functionality in the software layer 2 3

SDN

Co

ntro

ller

vPE

vIMS

vLoad

Balan

cer

vEPC

vAP

P

Disaggregation and reconstruction of IP, access network， RAN and

others

Telefonica


Drivers: Huge traffic growth

25%-30% Annual Network Traffic growth

94

6

94% Traffic carried by fixed network

80

20

>80% WiFi connection

Traffic carried by cellular or fixed NW

WIFI connection or

nor?

The business mix is transforming

Growing Average Revenue / Access

From selling minutes to selling Gigabytes

The portfolio is transforming

Improving position in Key Markets: Spain, Brazil

and Germany

Maintaining Global Scale & Increasing

Focus in Key Markets

10%

10%

52%

43%

28%

33%

10%

14%

2014

2016

Services over connections Access&Voice

Broadband Equipment&Others


Telefonica’s Transformation Initiative - UNICA

UNICA takes the advantages of • cloud computing(IaaS, PaaS…) and • adds” NaaS”(capabilities VxLAN, vFirewall, vLB

(balancers), vRoutes, virtual management of bandwidth and QoS) that leverages the power of virtualized network resources.

UNICA infrastructure To be able to implement any service at any site easily, quickly and simple through DCaaS (Data Center as a Service)

Vision

Make progress through TCO-driven use cases (no need to wait for a “Big Bang” of virtual networks)

Strategy

By virtualize 30 percent of its new infrastructure by 2016

Target

Digital Service takes up 5% of Telefonica’ total service revenue ,with a growth rate about 33%


Telefonica UNICA infrastructure overview

Unified standard for infrastructure

Unified service management

Multi tenants management

Offers self-service and an isolate and

secure environment

Specific NaaS capabilities Provides VxLAN, subnet, VPN, Elastic IP, vFW (firewall) service for new VDC and new service platform deployment. Supports multivendor in the network equipment

Template based service

deployment

Source: Telefonica Quarterly release


UNICA’s Main Focus - Network Operations and Services

Improving services like hybrid cloud, dynamic policy and pricing, elastic service chaining, etc., which should produce new revenues

Reduce the Product/Service Time To Market

Profiles of employees will have to

converge CT+IT

The current operations mindset has to

be evolved towards Dev-ops

Network Operation

Responsible for the development of services, technology, deployment, and operations Unifies cloud B2B services, horizontal infrastructure management and Data Centers Organized as two Centers: IaaS and B2B cloud business services Coordinated by a governance model to ensure convergence in global solutions and economies of scale and

knowledge

Service

Service cloud delivery center is being implemented


Example: vIMS- Reducing Product Time to Market from 4

months to 4 days

Source: Telefonica Quarterly release


UNICA evolution map: 2014- 2017

2014 Announced Unica project in MWC Launched trials of vRouter reflectors, Radius servers

and DNS Started POC of vCPEs and vPE firewalls Working on virtualize other segments, including radio

access network, through virtual RAN

.

2015 Deploying Certification Environments

Deploying UNICA Domains

Deploying feasible systems over UNICA

Named HP as the technology provider and systems integrator for Unica

2016-2017 Transformation to NFV core networks like vEPC for LTE

Virtualization of critical control systems like Home Subscriber Server (HSS) and Home Location Register (HLR)

Starting the deployment of traffic nodes with NFVs

3 pilots with several partners installed in Madrid(Huawei ), Mexico(ALU) and Miami(NEC)

Source: Telefonica annual Quarterly release

We’re here now!


Telefonica’s SDN/NFV migration plan

The network not only has to adapt quickly to customer needs, but also has to be an enabler of innovative new services. Our goal is to introduce virtualization in a gradual and smooth way.

Enrique Blanco Global CTO Telefonica

vCPE vSTB

vEPC vCG-NAT

vPE

vGGSN

vBRAS Unifed IP Edge

vDPI

vDHCP vPCRF

Real Time Network Analytics

vIMS vCNS vSCP

PCE

Available 1:2015 Available 2:2016 Available 3:2017-

vUCB

SDN Orchestrator

Net OS: Joint orchestrator of

network resources

Dependent on the needs of each of Telefonica op-telcos

Dependent on the availability of carrier grade solutions in the market


Conclusion: different strategy brings different developing plan

and business case

Leading

Technology

Revolution

• Big ambution, want dominate in regain

• Overall high level design

• Aggressive on SDN & NFV operation transformation

Different strategies and timelines lead to different production roadmaps

and vendor selection

Consolidation

step by step

• Start from vDCaas

• Take longer period to accomplish transformation

Low Hanging

Fruit First

• vCPE as the first target • Aim at recognizing proven

benefits from SDN/NFV • Lack of system revolution

Content


2 Examples

3 In Conclusion


SDN/NFV delivers 4 key capabilities

SDN/NFV Development Strategy

Revenue Generation

Cost Savings Organization Opitimization

Eco-system cooperation


Revenue Generation 1: Improved efficiencies - shortened TTM

TTM reduce 64% from 3months to 1.5 month

Reduce 55% go-to market time

Service launch from 4 months to 4 days


Revenue Generation 2: Innovative Services

Wi2 Cloud Integration Model

SOHO, SME Bundle offer with NW

connection, automatic cloud

backup and software

development toolset

Middle Enterprise Manufacturing

Bundle offer with NW connection, advanced security and Sales Force Automation for sales people with mobile device

i-2

i-3

i-1

i-2

e-1 Network Storage Compute

NFV&SDN

• Public Safety

• Maritime

• Oil and gas

• Mining

• Transportation

vEPC

vANDSF

vSON

vPolicy

• IoT MBB for industry players • SDN/NFV can provide seamless independent of

MBB network for IoT services instead of high cost private network


Cost Savings: Vendor/SI unlock brings cost savings

AT&T case: Redefine the vendors into 5 categories: Commodity Hardware Vendor, Software Vendor, System Integrator, Partner Vendors and Startups to reduce cost

OPEX issue

• In SDN/NFV network architecture, CT and IT combined knowledge are needed

• New lab resource may need for develop new business while current resource maintain existed platform

• In ATT case, 100-150 more people need, 10% of whole Dept.


Organization Optimization: CTIO combination trend

Organization optimization

after NFV & SDN deployment

• CIO-CTO share responsibility

• Mainly working for SLA basis

• New “orchestration” function acts as control tower between NOC and DC

• New “orchestration” function also takes key role to combine KPIs

• ICT Training menu to be ready for NFV & SDN staffs ( for traditional network staff ) - IT infrastructure: Server, Storage, OS, Middleware - Cloud Computing: Hypervisor, Orchestrator - Open Source: Open Stack, Open Flow etc - O&M full Lifecycle Management

• Leaner operation, internet-

enabled business • User experience focus • Fast GTM

• Open platform • Evolve to Dev-Ops

environment

• More developer involved base on suitable SLAs


Eco-system Cooperation

Smartphone, PC, wearable, STB, Tablet M2M, Smart home

2G/3G/4G, WiFi,, Small Cell, Femto Cell, FBB(DSL/Fiber/..)

Backhaul & Core transport (Fiber, VPN)

Smart Core

Cloud

Backhaul NaaS

Transport NaaS

Compute IaaS

Cloud IaaS

Mo

bile

/Fix

ed

NaaS

Big

Data

Serv

ices

Service Innovation (Video, FM Content, M2M, …)

Operation

transformation（MVNO,B2B,FMC) Service broker:

XaaS

SDN/NFV innovation lab helps operator and vendor transformation together

Open API and Dep-Ops for more devloper


A Telco Deployment Roadmap for the future

SDN/NFV is standard aspect of procurement

Most systems obtainable in virtualized form

NFV&SDN becomes new network architectures

Virtualised test environments

Exploit SDN/NFV for small cell(e.g., small cell)

CTIO operation structure

FY1 FY2 FY3 FY4 FY5 FY6

Exploratory phase Evolutionary phase Revolutionary phase

Intensify use of existing initiatives (cloudbursting, use of COTs, virtualisation)

Parallel/segregated core networks for special or critical services

Primary core migration to NFV&SDN

New vendors and value chain

New purchse models

Emergent network capabilities

We are here

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