SDN Ushers a New Era in the Telecom Industry


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This briefing will discuss:

- SDN current state of the union
- Adoption curve (timing and inflection point in the uptake)
- Early adopter deployments
- Operator insight: AT&T supplier Domain 2.0
- Incumbent vendors that will need to deliver value

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SDN Ushers a New Era in the Telecom Industry

  1. 1. Software Defined Networking (SDN)Software Defined Networking (SDN) Ushers a New Era of the Telecom IndustryUshers a New Era of the Telecom Industry Ronald Gruia Director, Emerging Telecoms May 20th 2014May 20th 2014 © 2014 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  2. 2. Today’s Presenter Ronald Gruia, Director - Emerging Telecoms Frost & Sullivan Functional / Industry Expertise: •17 years of telecom industry expertise accumulated at Frost & Sullivan (13 years) and Nortel Networks (4 years). Particular expertise in: -NGN Transition: LTE (4G), IP Multimedia (IMS), Software Defined Networking (SDN), services and standards 2 services and standards -Telco 2.0: business models, next-gen VAS (Value Added Services), RCS, service brokering -The Enterprise of the Future: IP Telephony, WLANs, UC, Speech, FMC, and VoIP apps • Strong experience base covering telecom and power systems industry: • U.S. Patent holder: principal inventor of an algorithm optimizing a multimedia application • 100+ speaking engagements at telecom conferences and industry shows • Featured columnist at, IMS/NGN Magazine, Processor Magazine and • Quoted on Business Week, Financial Times, Forbes, Wired, API, Reuters, MarketWatch, etc. • Appearances on CNBC (US), Business News Network (BNN), RoB TV and TechTV (Canada), Decision TV (Brazil), TeleSemana (Latin America), and Telecom TV (UK, live from Spain)
  3. 3. SDN Disruption Agenda • SDN Defined / Architecture • Have We Seen This Before / What is Different This Time Around? • SDN Use Cases • Early Adopter Deployments 3 • AT&T Supplier Domain 2.0 Update • How SDN is Disrupting the Market • SDN Adoption Data Point • Incumbent Vendors Will Need to Deliver Value • Example: Cisco ACI Launch & Implications • Conclusions
  4. 4. A New Approach is Needed... Source: Deutsche Telekom AG From Network Mainframes to Open Systems 4 • Clearly, newer solutions need to be considered and replace the legacy implementations which are no longer sustainable over the long run. Two new technologies that have gained a lot of attention from the operators over the past couple of years are SDN (Software Defined Networking) and NFV (Network Function Virtualization).
  5. 5. SDN Defined • SDN (Software Defined Networking) is a novel approach to networking enabling carriers to achieve a more efficient control of their infrastructure, drawing upon customization and optimization to deliver innovative network services. SDN allows a controller to determine how packets are forwarded by networking elements, separating the control and data planes within switches/routers. There are 3 key distinctive features in an SDN architecture: • Separation of the control plane from 5 • Separation of the control plane from the data plane • A centralized controller and view of the network • Programmability of the network by external applications • This is yet another instance of the ongoing “ITfication” of the telecom Industry. Source: SDN Central
  6. 6. SDN Defined by Others… Peter Lothberg, IETF Executive Director and Swedish Internet guru “SDN provides the flexibility necessary to shorten time-to-market. Program services instead of re- architecting the network and the management system for every new service.” Martin Casado, Project Clean Slate; Founder & CTO - Nicira Networks; Chief Architect, Networking - VMware "I actually don't know what SDN means anymore, to be honest.“ "Now it is just being used as a general term for networking, like all networking is SDN." 6 "Now it is just being used as a general term for networking, like all networking is SDN." "SDN is now just an umbrella term for cool stuff in networking." ONF: “The concept of SDN separates forwarding and control from switches and routers into OpenFlow controller. The separated and programmable control plane enables dynamic allocation of network resources and integrated online management and monitoring.” Guru Parulkar, Executive Director at Open Networking Laboratory and Professor, Stanford University “SDN promises to change networking fundamentally for the better – lowering costs while expanding flexibility, programmability, and monetizability for service providers”
  7. 7. SDN Architecture Northbound APIs (no fully open protocol yet being standardized on) Southbound API 7 • The control data plane interface (i.e. the “southbound API” provides the interworking between the controller and the physical or virtual network devices. The “northbound” set of APIs provide programming interfaces between application and controllers, w/ 2 flavors: one at the controller level (on top of which apps such as virtual load balancers or firewalls can be run), and one at the network virtualization level for applications like cloud orchestration. Source: ONF Southbound API (OpenFlow, CLI, NetConf/YANG, RESTful, XMPP, XML- RPC)
  8. 8. Have We Seen This Concept Before? TechnologyAdvances Distributed Control Plane w/in Switch All Data w/in Control Plane Early ‘00’s Separated Control & Data Planes Late ‘00’s History of SDN Before OpenFlow (BO) 8 Source: Frost & SullivanTime TechnologyAdvances Source: Frost & Sullivan, adapted from Wiretap Ventures/ SDN Central presentation Separated Control & Data Planes Early ‘90’s w/in Switch Mid- ‘90’s
  9. 9. What is Different This Time Around? OpenOpen InnovationInnovation OpenOpen InnovationInnovation SoftwareSoftware DefinedDefined NetworkingNetworking (SDN)(SDN) SoftwareSoftware DefinedDefined NetworkingNetworking (SDN)(SDN) 3rd party apps ecosystem creation Lower CAPEX, OPEX reduction Control plane separation fosters quicker innovation Source: Frost & Sullivan 9 Network FunctionNetwork Function Virtualization (NFV)Virtualization (NFV) Network FunctionNetwork Function Virtualization (NFV)Virtualization (NFV) SDN has two other pillars to stand on: openness and NFV OPEX reduction and enhanced agility • NFV and SDN: very complementary, mutually beneficial but not inter-dependent; SDN can improve NFV performance (simplify compatibility, ease operations), NFV enhances SDN via virtualization, IT orchestration and management techniques • ONF (Open Networking Foundation) handles OF/SDN, ETSI/NFV Forum manage NFV • IT value chain now has more experience under its belt with the “ITfication” of the telco industry and realizes that over-provisioned networks do not yield a winning model • OpenFlow spec openness; standards driven by operators and vendors
  10. 10. SDN Use Cases Enterprise Use Cases Domain Use Cases Network Slicing Ability to give different users their own “slice” of the network in multi- tenant environments SDN/NFV Use Cases for Enterprises SDN CTL 10 Network Stretching Across data centers and between data centers mainly focused in the use of overlay technologies that can overcome some of the Layer-2 limitations in today’s networks Data Center Coordination Across all data center resources, including networks, compute, storage; firewall, deployment of load balancer, IPS/IDS services can be procured and on-demand Other Dynamic WAN interconnect (exchanges between peering networks), Bandwidth-on-Demand, end-to-end service provisioning Source: Frost & Sullivan analysis.
  11. 11. SDN Use Cases (Cont’d) Service Provider Use Cases Domain Use Cases NGN Service chaining (dynamic configuration of Layer 4-7 services such as ADC, firewalls, etc.) SLA guarantees, service chaining (including security, QoS and parental control), adaptive capacity utilization, on-demand network services SDN/NFV Use Cases for Carriers SDN CTL 11 utilization, on-demand network services Cloud Virtualized business services, security as a service (via Radware), network unification/multi-tenant networks, virtualized WAN optimization Mobile Mobile core (EPC), network edge, mobile backhaul, traffic steering Video Premium video, virtualized video, content distribution Source: Frost & Sullivan analysis.
  12. 12. Early SDN Deployments • We will take an in-depth look at four early SDN deployments: 1. NTT Communications: • Deployed NEC infrastructure to deliver its Enterprise Cloud Service (as part of its virtualized data center infrastructure) • Optimized ICT costs while managing global corporate ICT ops. 2. Google implemented SDN for its WAN: • Announced at ONS 2012; built custom switches with OpenFlow agent 12 Announced at ONS 2012; built custom switches with OpenFlow agent • Filling up the G-scale backbone network pipes for efficiency 3. Deutsche Telekom TeraStream project: • IPv6 network in Croatia for broadband services • Tail-f NCS multi-vendor controller; Cisco network equipment 4. Colt Telecom Carrier Ethernet Service: Leveraging SDN to offer a multi-vendor carrier Ethernet service utilizing Cyan’s: • Blue Planet software to orchestrate, provision, and control Accedian EtherNIDs • Z-Series optical platforms to automate service provisioning
  13. 13. NTT Communications’ Enterprise Cloud Service Enterprise Cloud Utilizing SDN 13 Source: NTT Communications • NTT Communications’ Enterprise Cloud Service offers global cloud resources that enterprise customers can leverage through straightforward control and management. The enterprise customers can optimize their ICT costs while managing and expanding their global corporate footprint.
  14. 14. Google B4 Software Defined WAN Google B4 Software-Defined WAN: Foundation for Transport SDN 14 • The B4 network met Google’s requirements and went into production in early 2011. The company is relying on multiple OpenFlow controllers and centralized traffic engineering. • The single SDN control plane spans: 6 datacenters in the U.S., 4 DCs in Europe and another 2 DCs in China. Source: Google
  15. 15. Deutsche Telekom TeraStream IPv6 Project (Croatia) Source: Deutsche Telekom 15 • The transition will span several years, with legacy OSSs supported via an OSS Gateway component that will act as a “translator” in order to interact with such legacy systems.
  16. 16. Colt Telecom Carrier Ethernet Multi-Service Platform (MSP) Source: Colt TelecomColt Telecom’s SDN Target Architecture 16 • A multi-vendor carrier Ethernet service utilizing Cyan offerings (Blue Planet software for control, orchestration and provisioning and Z-Series optical platforms for service provisioning).
  17. 17. CAPEX / OPEX Savings: Key Catalyst SDN Savings Metrics – Sample Data Point 17 • “Based on today’s deployment, we are seeing reduction in CAPEX, but more in OPEX. I believe that having a common SDN controller has tremendous benefits in OPEX… We are seeing CAPEX savings of around 20-30% today, and we estimate that will rise to 50% by 2015. On the OPEX side, we are hoping for over 50% by the end of 2015.” • Note: NTT Communications deployed NEC’s SDN solution as part of its Enterprise Cloud Service. Source: NEC SDN World 2013 Keynote
  18. 18. AT&T Supplier Domain 2.0 Update • AT&T launched on Sep.23, 2013 its plan to pre-approve vendors within the areas of SDN/NFV, in order to accelerate time to market. While 2014-15 CAPEX remains at $20B per year, the move reflects a downwards bias in total spend. • The AT&T Domain Program 2.0 goal is to advance all-IP broadband, all- wireless, and all-cloud infrastructure. At MWC, AT&T announced its “user-defined network cloud” vision under its Domain 2.0 program and 18 “user-defined network cloud” vision under its Domain 2.0 program and named its initial group of suppliers which included Ericsson, Tail-F Systems, Metaswitch Networks, and Affirmed Networks. These vendors will be working with AT&T on a virtualized EPC. • Although vendors such as ALU, Ciena, Cisco and Juniper were excluded from the initial list, the operator mentioned other selections will be taking place throughout 2014. We believe Ciena is almost certain to be announced in the future due to its “vendor of the year” status at AT&T and its recently announced channel partnership with Ericsson.
  19. 19. AT&T Supplier Domain 2.0 Update (Cont’D) • AT&T noted that it is expanding its traditional “vendor selection” net more widely, including “non-traditional” network players such as smaller companies, open-source alternatives as well as universities. • One interesting observation is that it seems likely that AT&T will not be using OpenFlow for their implementation of SDN. Its Domain 2.0 White Paper does not mention OpenFlow, and neither did John Donovan at his ONS keynote one week after MWC. 19 Donovan at his ONS keynote one week after MWC. • In addition, AT&T’s largest Supplier Domain 2.0 Program vendor announced thus far (Ericsson) has also chosen not to rely upon OpenFlow in their SDN trials in Australia (Telstra) and elsewhere. Moreover, Tail-F is being leveraged alongside NETCONF and Yang at the Deutsche Telekom TeraStream IPv6 project in Croatia. • Therefore it is not necessarily the case that the SDN southbound APIs will all necessarily standardize on OpenFlow. Hence, interoperability will be a key issue going forward.
  20. 20. How SDN is Disrupting the Market Services Services Apps Apps Hardware Hardware 20 • SDN will bring a shift away from hardware towards software and services • The “ITfication” of the Telecom industry: SDN is just another instance of that phenomenon • Vendors will have to focus on their core competencies and know who to partner with • Services can be a backdoor to winning future business 2013 2017 Note: Pie charts are only for illustrative purposes
  21. 21. SDN Disruption: Layer Disaggregation of Traditional Networks APIs / Apps Orchestration Big Tap (Big Switch), Embrane, Gigamon, Infoblox, Amdocs, Cyan, Embrane, Ericsson, NEC, Oracle, Plexxi, Pertino, Anuta Networks “Classic” Network SDN Network Function The orchestration layer automates a sys admin day-to- day tasks, such as change management and provisioning, which reduces OPEX. Applications reside on the app layer on top of the controller, which is accessed via APIs. 21 Cisco or Juniper customer HW IOS / JUNOS Hardware Controller Broadcom Switch x86 server Cumulus Linux Floodlight (Big Switch), Open Daylight (Cisco, Juniper, HP), NSX/Nicira (VMware), PLUMgrid APIs / Apps Embrane, Gigamon, Infoblox, Radware which is accessed via APIs. These APIs allow applications to tap network functionality. The controller abstracts routing information away from hardware to a centralized point, containing routing and configuration data. Packet forwarding function or what sends packets on their way is in the hardware
  22. 22. 21.1% 15.8% 26.3% 15.8% 1 to 2 years 2+ years Still evaluating No current plans Carrier View SDN Adoption Data Point: SDN Investment Time Frames 18.8% 12.5% 25.0% 12.5% 1 to 2 years 2+ years Still evaluating No current plans Enterprise View Source: Frost & Sullivan analysis.n=16 n=19 22 10.5% 10.5% Already committed 6 months to 1 year 0% 10% 20% 30% • Enterprises typically further along the SDN adoption curve compared to carriers, which are predominantly evaluating and pondering future plans • 50% of enterprise CIOs will make SDN commitments within the next 2 years • Carriers who are committed to SDN have projects mostly scheduled over the next 12 to 24 months 18.8% 12.5% Already committed 6 months to 1 year 0% 10% 20% 30%
  23. 23. Incumbent Vendors Will Need to Deliver Value “Democratizing Capacity” Source: Cumulus Networks • Simplistic analysis (not apples-to-apples, does not take into account features, overall platform / portfolio, support, and factors such as power, cooling, labor, etc. – but can be used to illustrate the SDN disruption. 23 the SDN disruption.
  24. 24. Example: Cisco ACI Launch and Its Implications • Cisco launched in Nov. 2013 its Application Centric Infrastructure (ACI) products and strategy, based on technology from its "spin-in" venture, Insieme. The ACI architecture consists of 3 layers: • Hardware: Nexus 9000 series switches leverage both merchant silicon and custom ASICs designed by Insieme, taking Cisco’s Nexus into 40 GbE and a newer optimized version of the NX-OS. The 9000 will be upgradable via software whenever the ACI controller software is ready to 24 upgradable via software whenever the ACI controller software is ready to ship. The 7000 series can also be upgraded to NX-OS and is compatible with the APIC. • Software layer: Application Policy Infrastructure Controller (APIC): the centralized software management solution and brains of the ACI architecture will be available in CQ2 of 2014. • Broad partner ecosystem: in L4-7 applications (F5, Embrane, Symantec and Citrix), hypervisors (Microsoft, Citrix, and VMware) and orchestration (RedHat). VMware was less visible at the event.
  25. 25. Example: Cisco ACI Launch and Its Implications (Cont’d) • Switching price compression due to SDN/commoditized silicon: Cisco used a 288 port deployment example of the Insieme solution for $75k, which translates to $260/port. We believe this is a fully loaded price, including all switching as well as the APIC controller. • Bigger competitive pressure as the lower Cisco pricing puts heat on vendors such as Arista, which had quoted $500/10G port for its 25 vendors such as Arista, which had quoted $500/10G port for its 7000 X solution last year, and also positions Cisco within striking distance of white-box offerings that are being priced at ~$80/port (not including the SDN controller). • More openness, since Cisco is adopting a more open architecture, open sourcing some ACI code and offering OpenStack and OpenDaylight compatibility. The “fully open” system is still elusive, but future looks promising with more openness.
  26. 26. Conclusions • SDN will usher a greater shift in value from hardware to software. • Key differentiators will be: ability to monetize software/APIs, networking applications, orchestration/management, ecosystem creation, and system integration services. • Hardware commoditization not likely to happen in the short run, however some elements (e.g. lower-end switches/routers) could see some pressure. Vendors will try to overcome that with higher revenues in software and 26 services. • While some control plane functions in existing switches will move to the controller, the switch will still remain an important component in terms of empowering SDN scalability and enabling programmability. • The SDN market is in its infancy, with a more widespread adoption still remaining 1-2.5 years away. There have been already some early deployments, (NTT Communications, Google, Deutsche Telekom, Colt Telecom, etc.) but a more accelerated uptake will take time as standards mature. In the interim, we anticipate hybrid SDN implementations
  27. 27. Q & A Session Frost & Sullivan recently issued a global multi- client SDN study packed with forecasts, and enterprise CIO/carrier CTO opinions based on global interviews conducted with 35 execs from 4 regions. For more info, please contact me. 27 Ronald F. Gruia Director, Emerging Telecoms +1-416-490-0493 About me: Thank You
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  31. 31. For Additional Information Ronald Gruia Director Emerging Telecoms (416) 490-0493 Brian Cotton, PhD Vice President Information & Communication Technologies (416) 490-0983 31 Mireya Espinoza Global Director Corporate Communications (210) 247-3870 Angie Montoya Global Analyst Briefing Coordinator Marketing (210) 247-2435