Operations & Monetization in the Virtual Network

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- Learn what factors are truly driving change
- Comprehend how NFV and SDN fit together
- Understand why operations and business management are so important and intertwined
- Find out if this is finally the end of the legacy network

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Operations & Monetization in the Virtual Network

  1. 1. How Support Software Will Play a Lead Role in the Virtual Future Operations & Monetization in theOperations & Monetization in the Virtual NetworkVirtual Network Tim McElligott – Senior Consulting Analyst, Global OSS BSS Strategy Stratecast | Frost & Sullivan Analyst Briefing Presentation April 3, 2014
  2. 2. Today’s Presenter • Focus: Operations and Monetization (O&M) (also known as OSS/BSS) • McElligott has 25 years of telecom experience, including a decade with a major Tim McElligott, Senior Consulting Analyst Stratecast, a division of Frost & Sullivan Page 2 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. North American operator in technology and engineering roles for both wireline and wireless voice and data systems. His concentration for the last 15 years has been in telecom support software. As the industry migrates to 4G and beyond, operations support systems will play an increasingly important role in advancing software-defined networking, self-optimizing networks and various levels of virtualization. Follow me on:
  3. 3. Today’s Agenda: • Why is the communications industry in such a critical state of flux? • Three innovations leading the response: NFV, SDN, SON. Page 3 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. • The future Virtual Network and why O&M is so important to its success. • Status, expectations and challenges for the Virtual Network. • Conclusion: O&M’s Time to Shine
  4. 4. Why is the communications industry in such a critical state of flux? G R O W T H Page 4 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. state of flux - a state of uncertainty about what should be done (usually following some important event) preceding the establishment of a new direction of action. F L U X
  5. 5. The Flux Capacitor (1) • Network Technology Advances and User Device Evolution – Transitioning to 4G LTE, improved performance and new smartphone capabilities are improving the digital lifestyle consumer and business customers. • Cost Improvement Pressures – Financial pressure to be more cost effective is a growing concern CSP executives around the world in both Page 5 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. effective is a growing concern CSP executives around the world in both mature markets and in high growth areas. • Data Usage Volumes – exponential expansion continues, but competitive pressures mount for better mobile data pricing plans and service offers. • Advancing Enterprise Business Strategies – industry continues to incorporate mobile connectivity into goods and services. These drivers were identified in a recent Stratecast Report (OSSCS 15-01) called, “The Virtual Future and its Relationship with OSS and BSS”.
  6. 6. The Flux Capacitor (2) Competitive Forces – With more available options, enterprises demand negotiated pricing and strategies tying partner compensation with service consumption. Rating/charging and partner management systems are ill-equipped. Device and Data Security – Heightened focus on mobile security and increased sensitivity to the use of mobile devices for mCommerce. Page 6 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. Changing Business Models – M2M, B2B, and multi-partner value chains drive CSPs to seek new systems and new business processes to accommodate. Most deployed OSS/BSS are not equipped to address virtualized services, multi- tenancy relationships between suppliers, and white labeling requirements. Real-Time Data Analysis and Customer Awareness of Personal Data – Consumer awareness of personal data and its analysis will significantly gain attention by service providers and other key industries.
  7. 7. Figure 1 - Communications Industry: Business Model of Yesterday (and Today) Our Connected World Source: TAM, TMF GB929 Fulfillment Assurance Billing Customer Management Service Management Resource Management Supplier/Partner Management Enterprise Management Product Management Market/Sales Management OSS / BSS • Fixed-line Voice • Mobile • Broadband Data Focus on Technology Problem: the current business model and architecture can’t respond. Page 7 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. Fixed-Line MobileIP Voice MMS / SMS 2.5G Data (GPRS/EDGE) 3 G Data (UMTS) 3.5G Data (HSPA) 4G Data (LTE) MobileRouters Switches Databases IP Voice Broadband DSL Cable Fixed-Line Network Technology Source: TAM, TMF GB929 • Consumers • Small Medium Business • Enterprise Focus on Customers The current network environment, with its evolutionary waves of change, has served the global CSP community for well more than 100 years. It is now poised to undergo the most significant technology transformation to date, as network virtualization concepts push forward to address the capacity, flexibility and responsiveness needs demanded by today’s business environment.
  8. 8. So the industry responds with new models and new architectures Network Function Virtualization (NFV) Software-Defined Networking (SDN) Page 8 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. Self-Organizing Networks (SON) It is our opinion at Stratecast that these are not hyperbolic trends, but real initiatives with enthusiastic and committed weight behind them. Based on discussions with Service Providers, their public statements, and the development work already underway, NFV is the highest priority.
  9. 9. A word about virtualization: Who is to say what is real? Can “virtual” be just as good? This is American actor Joaquin Phoenix, apparently in love in the real world. This is Joaquin in love with a virtual entity (his mobile OS) in the movie “Her.” Page 9 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. There have been enough benchmarking tests and real-world examples within the data center to show that virtual machines, based on commodity hardware and components, can support the most demanding and mission-critical applications.
  10. 10. Network Function Virtualization (NFV) Page 10 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. Although control mechanisms for NFV and SDN differ in the processes they need to manage (i.e. operating systems in NFV; configurations in SDN) this could be a place where the technologies can begin to come together.
  11. 11. NFV Architecture -- ETSI Page 11 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. As if mediation and control was not complex enough, OSS & BSS, will have three routes rather than one to access and correlate data from Virtual Network Functions and Legacy Network Elements. It must also contend with messaging from a separate layer of NFV Management and Orchestration, which has three separate functions within it.
  12. 12. Where to Start? Page 12 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast.
  13. 13. Yes, but what about… Page 13 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. The top concern about moving to a virtual environment is basically an OSS issue. It represents the concern over real-world orchestration and control versus the ideal level of control defined in the specs.
  14. 14. Trends, Fads, Fades and Dead Ends VoIP, Cloud, IMS, Big Data, The Internet of Things, Ring Tones, SaaS, Unified Communications, NFV, SDN, Customer Experience, Machine Learning, AI, Tablets Why NFV is not a fad: The Rapid Pace of Progress • The first informal discussions on cooperation occurred in April 2012. • The first formal operator meeting in Paris quickly followed in June. • The ETSI NFV group was quickly formed in September that same year Page 14 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. • The ETSI NFV group was quickly formed in September that same year • Publication of the now famous “Call to Action” whitepaper came a month later. • Then the first NFV ISG plenary session was held in January 2013 • By October the group had four specification documents ratified and published along with a second whitepaper. • Two weeks ago, ETSI and the Open Networking Foundation announced a partnership to leverage SDN to accelerate NFV deployment (more on that later.) • Who said Service Providers couldn’t move fast?
  15. 15. A Word about Software-Driven Intelligent Networks Page 15 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. Deploying SDN is like the fighter pilot being asked to turn a high-tech, precision and dangerous piece of equipment over to a computer to be controlled remotely by software. But as the CIA has proved, and this simulator on the right shows, software- controlled drones can be managed from the safety of a control room far away from immediate danger. So if a drone can be controlled from half-way around the world, so can a network.
  16. 16. Challenges to implementing SDN Page 16 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. Because SDN is more of a vendor-led initiative, there are naturally more territorial battles being fought to advance competing agendas than is currently taking place in NFV.
  17. 17. SDN Architecture Page 17 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast.
  18. 18. Software-Defined Networking (SDN) *SDN is a Supplier Driven Initiative Goals and Benefits of SDN: • Decouple Control and Data Planes • Centralize Management and Control • Open Network to Third Parties Page 18 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. • Open Network to Third Parties • Create Equitable Relationships with OTT players • Standardize Configuration and Orchestration • Leverages Open Source in a Carrier Environment • Eliminate Proprietary Interfaces
  19. 19. Other Challenges to implementing SDN • The Big If • Questions about the longevity of the OpenFlow protocol The transition to SDN is more complex than NFV Page 19 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. • The transition to SDN is more complex than NFV • Core network, data center, network edge or everywhere? • The unnerving pace of change
  20. 20. This is our Future Canis Major – 114 million Light Years away Andromeda/Milky Way 4 billion years from now Page 20 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. (real) (virtual) As we look into the future for NFV and SDN, we don’t see them remaining separate entities for long. By collaborating, NFV and SDN can help Service Providers address the unique needs of national and global enterprise users
  21. 21. A Virtual Network is More than the Sum of its Parts Page 21 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast.
  22. 22. CSPs Rank the Drivers for SDN/NFV Page 22 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. Service providers have not realized savings from virtualization in the data center and don’t believe they will do so in the network until they can reduce the cost of managing the network and delivering services.
  23. 23. Other Challenges and Concerns regarding NFV & SDN Page 23 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast.
  24. 24. The Role of O&M Grows and Grows • The full benefits of a virtual network will not be realized without a tandem focus on OSS and BSS, which needs to create: Page 24 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. tandem focus on OSS and BSS, which needs to create: • More automated processes • Deeper levels of data analysis • An intense focus on customer centricity • Increased flexibility within the revenue and partner management functions • A keen adherence to open standards, which has been circumvented for far too long
  25. 25. Requirements for O&M will demand innovation • Next Gen O&M must address both B2C and B2B scenarios where the enterprise customers may also be a partner in jointly providing advanced virtual services to common customers. • With any such CSP and partner ecosystem, new services, including mashups, will be broader than traditional service Page 25 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. including mashups, will be broader than traditional service offerings. • Next Gen rating & charging systems could become more than support systems for CSPs; they could be services unto themselves. • Side-step the continuing cycle of silo creation
  26. 26. The New Flux Capacitor Page 26 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. O&M OSS BSS NFV SDN SON 2 to 5 years Required for Transformation
  27. 27. Next Steps Develop Your Visionary and Innovative Skills Growth Partnership Service Share your growth thought leadership and ideas or join our GIL Global Community Page 27 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. Join our GIL Community Newsletter Keep abreast of innovative growth opportunities Phone: 1-877-GOFROST (463-7678) Email: myfrost@frost.com
  28. 28. Your Feedback is Important to Us Growth Forecasts? Competitive Structure? What would you like to see from Frost & Sullivan? Page 28 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. Emerging Trends? Strategic Recommendations? Other? Please inform us by “Rating” this presentation.
  29. 29. Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, and Twitter http://www.facebook.com/FrostandSullivan https://www.linkedin.com/groups/Future-Growth-Opportunities-in-ICT-4876870 Page 29 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. https://twitter.com/FS_ITVision https://www.linkedin.com/groups/Future-Growth-Opportunities-in-ICT-4876870 http://www.slideshare.net/FrostandSullivan
  30. 30. For Additional Information Tim McElligott Senior Analyst, Global O&M Strategy (815) 464-3784 tmcelligott@stratecast.com Karl Whitelock Director Global O&M Strategy (801) 446-1934 kwhitelock@stratecast.com Page 30 © 2014 Stratecast | Frost & Sullivan, all rights reserved. Proprietary and Confidential to Stratecast. Troy Morley Analyst, Global O&M Strategy 720-248-7692 tmorley@stratecast.com Perry Somers Director of Business Development Information & Communications Tech (360) 416-4982 psomers@frost.com

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