Delivering on SD-WAN: How to choose the right partners

SD-WAN has been made in North America…

65% of the North American operators featured in our Telco Cloud Tracker had deployed SD-WAN by the end of 2020

By contrast, 49% Asia-Pacific-based telcos had launched SD-WAN in their region by the same time and 44% European telcos were offering SD-WAN within Europe

As this market matures operators that are new to the market, or seeking to expand their services internationally, should choose an SD-WAN platform that will enable them to differentiate in their local markets or play to the telcos strengths.

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Challenges for telcos considering introducing SD-WAN

  1. Lack of relevant skills or experience: telcos worry about risks of ‘outsourcing’ a significant part of their WAN services, operations and infrastructure to SD-WAN vendor; and about integration with BSS / OSS etc.
    • Leading SD-WAN vendors collaborate closely with telcos to facilitate integration of their platforms with telcos’ networks and services
    • SD-WAN platforms provide management interfaces that are easy for non-technical staff to operate, and offer visibility into application workflows and network KPIs
  2. How to differentiate SD-WAN service: how to offer USPs for the local market and differentiate from competitors
    • Ensure you choose an SD-WAN platform that suits the key needs of your customer base (see competitive analysis in next section)
    • Differentiation can also be achieved through the services telcos and vendors offer around SD-WAN products, e.g. good local market and language support
  3. Absence of appropriate infrastructure, facilities and networks: e.g. lack of fixed broadband networks; insufficient SD-WAN platform support for LTE / 5G
    • Many SD-WAN platforms offer LTE and 5G connectivity mainly as a back-up to IP-MPLS and fixed broadband. But many telcos, especially in emerging markets, serve enterprise sites through FWA. How well do platforms support this?
    • Many SD-WAN platforms rely on redundant connectivity to cloud-based hubs: are these always available for telcos serving remote areas?
  4. Risk of cannibalising enterprise revenues and compromising ROI from existing products and assets: e.g. IP-MPLS; IP-VPN; dedicated Internet; etc.
    • Telcos can offer different classes of SD-WAN at different price points, inc. overlay-only services to clients that want them
    • SD-WAN now seen as a value-add to IP-MPLS, for which a premium can be charged: can be integrated with telcos’ managed services offerings

How to assess the different SD-WAN platforms?

How to assess SD-WAN paltforms

Source: STL Partners

The rest of this report includes a competitive analysis of key SD-WAN platform players and how they can enable telcos’ to meet enterprise customer needs and future proof their SD-WAN investments.

Table of Contents

  • Executive Summary
  • What are the challenges to introducing SD-WAN
  • Assessing different SD-WAN platforms
    • Cisco
    • VMWare
    • Fortinet
    • Versa Networks
    • Palo Alto
    • Silver Peak
    • Juniper
    • Aryaka
  • A framework for selecting and implementing SD-WAN platforms

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NFV: Great Promises, but How to Deliver?

Introduction

What’s the fuss about NFV?

Today, it seems that suddenly everything has become virtual: there are virtual machines, virtual LANs, virtual networks, virtual network interfaces, virtual switches, virtual routers and virtual functions. The two most recent and highly visible developments in Network Virtualisation are Software Defined Networking (SDN) and Network Functions Virtualisation (NFV). They are often used in the same breath, and are related but different.

Software Defined Networking has been around as a concept since 2008, has seen initial deployments in Data Centres as a Local Area Networking technology and according to early adopters such as Google, SDNs have helped to achieve better utilisation of data centre operations and of Data Centre Wide Area Networks. Urs Hoelzle of Google can be seen discussing Google’s deployment and findings here at the OpenNet summit in early 2012 and Google claim to be able to get 60% to 70% better utilisation out of their Data Centre WAN. Given the cost of deploying and maintaining service provider networks this could represent significant cost savings if service providers can replicate these results.

NFV – Network Functions Virtualisation – is just over two years old and yet it is already being deployed in service provider networks and has had a major impact on the networking vendor landscape. Globally the telecoms and datacomms equipment market is worth over $180bn and has been dominated by 5 vendors with around 50% of the market split between them.

Innovation and competition in the networking market has been lacking with very few major innovations in the last 12 years, the industry has focussed on capacity and speed rather than anything radically new, and start-ups that do come up with something interesting get quickly swallowed up by the established vendors. NFV has started to rock the steady ship by bringing the same technologies that revolutionised the IT computing markets, namely cloud computing, low cost off the shelf hardware, open source and virtualisation to the networking market.

Software Defined Networking (SDN)

Conventionally, networks have been built using devices that make autonomous decisions about how the network operates and how traffic flows. SDN offers new, more flexible and efficient ways to design, test, build and operate IP networks by separating the intelligence from the networking device and placing it in a single controller with a perspective of the entire network. Taking the ‘intelligence’ out of many individual components also means that it is possible to build and buy those components for less, thus reducing some costs in the network. Building on ‘Open’ standards should make it possible to select best in class vendors for different components in the network introducing innovation and competiveness.

SDN started out as a data centre technology aimed at making life easier for operators and designers to build and operate large scale data centre operations. However, it has moved into the Wide Area Network and as we shall see, it is already being deployed by telcos and service providers.

Network Functions Virtualisation (NFV)

Like SDN, NFV splits the control functions from the data forwarding functions, however while SDN does this for an entire network of things, NFV focusses specifically on network functions like routing, firewalls, load balancing, CPE etc. and looks to leverage developments in Common Off The Shelf (COTS) hardware such as generic server platforms utilising multi core CPUs.

The performance of a device like a router is critical to the overall performance of a network. Historically the only way to get this performance was to develop custom Integrated Circuits (ICs) such as Application Specific Integrated Circuits (ASICs) and build these into a device along with some intelligence to handle things like route acquisition, human interfaces and management. While off the shelf processors were good enough to handle the control plane of a device (route acquisition, human interface etc.), they typically did not have the ability to process data packets fast enough to build a viable device.

But things have moved on rapidly. Vendors like Intel have put specific focus on improving the data plane performance of COTS based devices and the performance of the devices has risen exponentially. Figure 1 clearly demonstrates that in just 3 years (2010 – 2013) a tenfold increase in packet processing or data plane performance has been achieved. Generally, CPU performance has been tracking Moore’s law which originally stated that the number of components in an integrated circuit would double very two years. If the number of components are related to performance, the same can be said about CPU performance. For example Intel will ship its latest processor family in the second half of 2015 which could have up to 72 individual CPU cores compared to the four or 6 used in 2010/2013.

Figure 1 – Intel Hardware performance

Source: ETSI & Telefonica

NFV was started by the telco industry to leverage the capability of COTS based devices to reduce the cost or networking equipment and more importantly to introduce innovation and more competition to the networking market.

Since its inception in 2012 and running as a special interest group within ETSI (European Telecommunications Standards Institute), NFV has proven to be a valuable initiative, not just from a cost perspective, but more importantly with what it means to telcos and service providers in being able to develop, test and launch new services quickly and efficiently.

ETSI set up a number of work streams to tackle the issues of performance, management & orchestration, proof of concept, reference architecture etc. and externally organisations like OPNFV (Open Platform for NFV) have brought together a number of vendors and interested parties.

Why do we need NFV? What we already have works!

NFV came into being to solve a number of problems. Dedicated appliances from the big networking vendors typically do one thing and do that thing very well, switching or routing packets, acting as a network firewall etc. But as each is dedicated to a particular task and has its own user interface, things can get a little complicated when there are hundreds of different devices to manage and staff to keep trained and updated. Devices also tend to be used for one specific application and reuse is sometimes difficult resulting in expensive obsolescence. By running network functions on a COTS based platform most of these issues go away resulting in:

  • Lower operating costs (some claim up to 80% less)
  • Faster time to market
  • Better integration between network functions
  • The ability to rapidly develop, test, deploy and iterate a new product
  • Lower risk associated with new product development
  • The ability to rapidly respond to market changes leading to greater agility
  • Less complex operations and better customer relations

And the real benefits are not just in the area of cost savings, they are all about time to market, being able to respond quickly to market demands and in essence becoming more agile.

The real benefits

If the real benefits of NFV are not just about cost savings and are about agility, how is this delivered? Agility comes from a number of different aspects, for example the ability to orchestrate a number of VNFs and the network to deliver a suite or chain of network functions for an individual user or application. This has been the focus of the ETSI Management and Orchestration (MANO) workstream.

MANO will be crucial to the long term success of NFV. MANO provides automation and provisioning and will interface with existing provisioning and billing platforms such as existing OSS/BSS. MANO will allow the use and reuse of VNFs, networking objects, chains of services and via external APIs allow applications to request and control the creation of specific services.

Figure 2 – Orchestration of Virtual Network Functions

Source: STL Partners

Figure 2 shows a hypothetical service chain created for a residential user accessing a network server. The service chain is made up of a number of VNFs that are used as required and then discarded when not needed as part of the service. For example the Broadband Remote Access Server becomes a VNF running on a common platform rather than a dedicated hardware appliance. As the users STB connects to the network, the authentication component checks that the user is valid and has a current account, but drops out of the chain once this function has been performed. The firewall is used for the duration of the connection and other components are used as required for example Deep Packet Inspection and load balancing. Equally as the user accesses other services such as media, Internet and voice services different VNFs can be brought into play such as SBC and Network Storage.

Sounds great, but is it real, is anyone doing anything useful?

The short answer is yes, there are live deployments of NFV in many service provider networks and NFV is having a real impact on costs and time to market detailed in this report. For example:

  • Vodafone Spain’s Lowi MVNO
  • Telefonica’s vCPE trial
  • AT&T Domain 2.0 (see pages 22 – 23 for more on these examples)

 

  • Executive Summary
  • Introduction
  • WTF – what’s the fuss about NFV?
  • Software Defined Networking (SDN)
  • Network Functions Virtualisation (NFV)
  • Why do we need NFV? What we already have works!
  • The real benefits
  • Sounds great, but is it real, is anyone doing anything useful?
  • The Industry Landscape of NFV
  • Where did NFV come from?
  • Any drawbacks?
  • Open Platform for NFV – OPNFV
  • Proprietary NFV platforms
  • NFV market size
  • SDN and NFV – what’s the difference?
  • Management and Orchestration (MANO)
  • What are the leading players doing?
  • NFV – Telco examples
  • NFV Vendors Overview
  • Analysis: the key challenges
  • Does it really work well enough?
  • Open Platforms vs. Walled Gardens
  • How to transition?
  • It’s not if, but when
  • Conclusions and recommendations
  • Appendices – NFV Reference architecture

 

  • Figure 1 – Intel Hardware performance
  • Figure 2 – Orchestration of Virtual Network Functions
  • Figure 3 – ETSI’s vision for Network Functions Virtualisation
  • Figure 4 – Typical Network device showing control and data planes
  • Figure 5 – Metaswitch SBC performance running on 8 x CPU Cores
  • Figure 6 – OPNFV Membership
  • Figure 7 – Intel OPNFV reference stack and platform
  • Figure 8 – Telecom equipment vendor market shares
  • Figure 9 – Autonomy Routing
  • Figure 10 – SDN Control of network topology
  • Figure 11 – ETSI reference architecture shown overlaid with functional layers
  • Figure 12 – Virtual switch conceptualised

 

Cloud 2.0: Telstra, Singtel, China Mobile Strategies

Summary: In this extract from our forthcoming report ‘Cloud 2.0: Telco Strategies in the Cloud’ we outline the key components of Telstra, Singtel and China Mobile’s cloud strategies, and how they compare to the major ‘Big Technology’ players (such as Microsoft, VMWare, IBM, HP, etc.) and ‘Web Giants’ such as Google and Amazon. (November 2012, Executive Briefing Service, Cloud & Enterprise ICT Stream.) Vodafone results Nov 2012
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Below is an extract from this 14 page Telco 2.0 Report that can be downloaded in full in PDF format by members of the Telco 2.0 Executive Briefing service and the Cloud and Enterprise ICT Stream here. Non-members can subscribe here or other enquiries, please email contact@telco2.net / call +44 (0) 207 247 5003.

We’ll also be discussing our findings at the New Digital Economics Brainstorms in Singapore (3-5 December, 2012).

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Introduction

This is an edited extract of Cloud 2.0: Telco Strategies in the Cloud, a new Telco 2.0 Strategy Report to be published next week. The report examines the evolution of cloud services; the current opportunities for vendors and Telcos in the Cloud market, plus a penetrating analysis on the positioning Telcos need to adopt in order to take advantage of the global $200Bn Cloud services market opportunity.

The report shows how CSP’s can create sustainable differentiated positions in Enterprise Cloud. It contains a concise and comprehensive analysis of key vendor and telco strategies, market forecasts (including our own for both the market and telcos), and key technologies.

Led by Robert Brace (formerly Global Head of Cloud Services for Vodafone), it leverages the knowledge and experience of Telco 2.0 analyst team, senior global brainstorm participants, and targeted industry research and interviews. Robert will also be presenting at Digital Asia, 4-5 Dec, Singapore 2012.

Methodology

In the full report, we reviewed both telcos and technology companies using a list of 30 criteria organised in six groups (Market, Vision, Finance, Proposition, Value Network, and Technology). We aimed to cover their objectives, strategy, market areas addressed, target customers, proposition strategy, routes to market, operational approach, buy / build partner approach, and technology choices.

We based our analysis on a combination of desk research, expert interviews, and output from our Executive Brainstorms.

Among the leading cloud technology companies we identify two groups, which we characterise as “Big Tech” and the “Web Giants”. The first of these are the traditional enterprise IT vendors, while the second are the players originating in the consumer web 2.0 space (hence the name).

  • Big Tech: Microsoft (Azure), Google (Dev & Enterprise), VMWare, Parallels, Rackspace, HP, IBM.
  • Web Giants: Microsoft (Office 365), Amazon, Google (Apps & Consumer), Salesforce, Akamai.

In the report and our analyses below, we use averages for each of these groups to give a key comparator for telco strategies. The full strategy report contains individual analyses for each of these companies and the following telcos: AT&T, Orange, Telefonica, Deutsche Telekom, Vodafone, Verizon, China Telecom, SFR, Belgacom, Elisa, Telenor, Telstra, BT, Cable and Wireless.

Summary

The ‘heatmap’ table below shows the summary results of a 4-box scoring against our key criteria for the four APAC telcos enterprise cloud product intentions (i.e. what they intend to do in the market), where 1 (light blue) is weakest, 4 (bright red) stronger.

Figure 1: Cloud ‘heatmap’ for selected APAC telcos
Cloud APAC Heatmap
Source: STL Partners / Telco 2.0

In the full report are similar tables and comparisons for capabilities and used these results to compare telco to vendor strategies and telco to telco strategies where they compete in the same markets.

In this briefing we summarise results for Telstra, Singtel, China Mobile, and China Telecom.

Telstra – building regional leadership

 

Operating in the somewhat special circumstances of Australia, Telstra is pursuing both an SMB SaaS strategy (typical of mobile operators) and an enterprise IaaS strategy (see Figure 2). Under the first, it resells a suite of business applications centred on Microsoft Office 365, for which it has exclusivity in Australia.

Under the second, it is trying to develop a cloud computing business out of its managed hosting business. VMWare is the main technology provider, with some Microsoft Hyper-V. Unlike many telcos, Telstra benefits from the fact that the major IaaS players are only just beginning to develop data centres in Australia, and therefore cloud applications hosted with Amazon etc. are subject to a considerable latency penalty.

 

Figure 2: Telstra: A local leader

Cloud Telstra Radar Map

Source: STL Partners / Telco 2.0

However, data sovereignty concerns in Australia will force other cloud providers to develop at least some presence if they wish to address a variety of important markets (finance, government, and perhaps even mining), and this will eventually bring greater competition.

So far, Telstra has a web portal for the reseller SaaS products, and relies on a mixture of its direct sales force and a partnership with Accenture as a channel for IaaS.

Figure 3: Telstra benefits from geography

Telstra Cloud Radar Map 2

Source: STL Partners / Telco 2.0

To read the note in full, including the following analysis…

  • Introduction
  • Methodology
  • Summary
  • Telstra – building regional leadership
  • SingTel – aiming to be a regional hub
  • China Mobile – the Great Cloud?
  • China Telecom – making a start
  • Conclusions
  • Next steps

…and the following figures…

  • Figure 1: Cloud ‘heatmap’ for selected APAC telcos
  • Figure 2: Telstra: A local leader
  • Figure 3: Telstra benefits from geography
  • Figure 4: SingTel’s strategy is typical, but well executed
  • Figure 5: China Mobile: A less average telco
  • Figure 6: China Mobile has a distinctly different technology strategy
  • Figure 7: China Mobile has some key differentiators (“spikes”) versus its rivals
  • Figure 8: Comparing the APAC Giants
  • Figure 9: Cluster analysis: Telco operators

 

Members of the Telco 2.0 Executive Briefing Subscription Service and the Cloud and Enterprise ICT Stream can download the full 14 page report in PDF format hereNon-Members, please subscribe here or email contact@telco2.net / call +44 (0) 207 247 5003.

 

Technologies and industry terms referenced: strategy, cloud, business model, APAC, Singtel, Telstra, China Mobile, China Telecom, VMWare, Amazon, Google, IBM, HP.

The Cloud 2.0 Programme

This research report is a part of the ‘Cloud 2.0’ programme. The report was independently commissioned, written, edited and produced by STL Partners.

The Cloud 2.0 programme is a new initiative that brings together STL Partners’ research and senior thought-leaders and decision makers in the fast evolving Cloud ecosystem to develop new propositions and new partnerships. We’d like to thank the sponsors of the programme listed below for their support. To find out more or to join the Cloud 2.0 programme, please email contact@telco2.net or call +44 (0) 207 247 5003.

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