Last week, the service provider organization MEF hosted its annual gathering of technologists and network groupies, GEN15. More than 1,000 people gathered in the plush Omni hotel in downtown Dallas to talk about pulling cable while eating pulled brisket.
Not only were we force-fed unhealthy amounts of barbequed meats, but we were served up a large helping of SDN and NFV technology for service provider networks, as they step up their investments in software-defined infrastructure (SDx) so they can reinvent themselves as virtual service providers.
Looking back at the numerous panels, keynotes, awards presentations, hallway discussions, and (most importantly) chats at the bar, it’s clear to me that the telecommunications industry is committed to moving to a new architecture based on open and software-defined technology.
“This may be our biggest shift ever… but there’s still lots to do,” said Axel Clauberg, vice president of IP and Optical at Deutsche Telekom, as he accepted his award for Industry Person of the Year at the awards banquet last Tuesday night.
Carrier Ethernet interconnections can seem mundane next to Teslas, Tinder, and iPhones. But fundamental changes will need to happen in the core of the network to make SDN and NFV work. Service-provider networks are famously filled with gobs of proprietary legacy technology, and everybody needs the core bandwidth to be responsive to feed our endless appetite for data delivery.
A big theme this year was the need for responsive, dynamic applications and services — which can be provisioned by customers. I’ve referred to this as the “Burger King Meets Telecom” phenomenon, whereby users can dictate the terms of their services and get them in minutes, not months.
Software is going to drive the move. Several of the panels I participated in focused on a new layer of open software that can provision, orchestrate, manage, fulfill, and monitor virtual services in carrier networks — replacing or integrating with the legacy operation support system (OSS). This is the growing multibillion-dollar market we call Lifecycle Service Orchestration (LSO). There’s evidence that LSO has taken the first steps from buzzword to real-world technology, as service providers are beginning to implement LSO software to provision SDN and NFV services.
There were many other awards (32, actually), but I’m pulling up the AT&T award as an example because it’s emblematic of the big moves being undertaken across the industry. Network on Demand takes a legacy service — Carrier Ethernet — and uses software provisioning and NFV to make it interesting again. Customers can use a Web portal to self-provision Ethernet bandwidth and adjust it in real time — a revolutionary concept in an industry that used to take months to provision a high-bandwidth circuit.
Josh Goodell, AT&T’s vice president in charge of Network On Demand, said in his keynote presentation that it’s about “taking SDN and NFV and applying it to our own network to help with the cost provisioning.” This was a trend echoed by many service providers: They want tools that enable them to move faster and allow the customer to control the network.
AT&T plans to take this further with its Universal Customer Premises Equipment (uCPE), which will use NFV platforms to deploy a wide variety of virtualized network services.
This is the type of technology highlighted in our recently released 2015 Virtual Edge Report. Service providers told us through surveys and interviews that the primary drivers of virtual customer premises equipment (vCPE) are to be able to turn up new services more quickly and to generate revenue.
The technology is coming together, but this trend is also going to cause much pain for communications service providers (CSPs), which are used to decades of “one service at a time” business plans. In order to compete with cloud services and over-the-top providers, traditional telecom players will have to move out of their comfort zone into a wide range of virtualized services.
This organizational challenge was another common theme at the show. MEF GEN15 attendees pointed out that one of the largest challenges in the SDN/NFV revolution is not the technical means of getting stuff to work, but how the front office figures out how to use the technology to launch new services and business models profitably.
“What’s going on in the server/provider community is organizational transformation,” said Scott Cassell, senior director of product management and strategy with Comcast Business, which won an award for Best Application of the Year – Education.
Wall Street is waiting for answers, too. In a research note Monday, analyst Michael Genovese of MKM Partners wrote that he still doesn’t know what software and hardware aggregation means in terms of picking winners and losers in the technology industry. Genovese thinks it may primarily benefit software and security startups such as Cylance and CENX. He believes the smaller software and security companies “stole the show” at GEN15.
“The disaggregation [of software from hardware and of specific functions from hardware] is creating the opportunity for a large number of new software companies to pursue potentially significant service provider sales,” Genovese wrote.
Indeed, a few niche players have found demand from the service providers, as a new arms race has begun. The SDN/NFV movement has taken hold as carriers look to turn next-generation technology into fresh revenue streams.