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May/June 2014 Number 134 A Euromoney Institutional Investor Publication global telecoms BUSINESS www.globaltelecomsbusiness.com :C ide Ins Plus Aga Khan-backed Afghanistan operator launches triple-play mobile network in east African countries EU takes first steps to a connected continent, but it’s not there yet GTB CFO summit: full report E Big O an OS da d CF LTE S/B ta p O G ba an SS p 41 uide ckh d m 49 s aul ob p6 ile 7 Telecom Egypt CEO Mohammed Elnawawy: New unified licence means we will break relationship with Vodafone Open Networking Foundation Operators know that continuing business as usual is not sustainable, writes Dan Pitt. But the combination of NFV and SDN can help operators compete Combining NFV and SDN will open door to new revenue and help operators compete NFV and SDN are complementary technologies that offer significant benefits by allowing operators to use off-the-shelf servers, operating-system software — often open-source — and virtualisation to cut network capital and operating expenses. Combining NFV and SDN also opens the door for new revenue by enabling operators to introduce new services quickly and to capitalise on excess network capacity — even for a short time — to offer ad-hoc, on-demand services. Carriers know that continuing business as usual is not sustainable. Here’s how the combination of NFV and SDN can help you compete. Dan Pitt: NFV and SDN are complementary technologies that offer significant benefits by allowing operators to use off-the-shelf servers and operating-system software to cut capital and operating expenses The role of NFV Virtualisation technology can bring the same efficiencies and cost advantages to networking as it has to computing and storage — which is crucial for operators in today’s fiercely competitive telecoms market. Thanks to a recent agreement between the Open Networking Foundation and the European Telecommunications Standards Institute, the effort to develop virtualisation solutions aimed squarely at operators has taken a major step forward. ETSI is working to accelerate network functions virtualisation, which enables functions such as load balancing and firewalling to run as software processes on commodity servers and switches. NFV reduces the need for expensive, single-purpose appliances that today cost the global telecoms industry billions in equipment and maintenance expenses. Software defined networking provides the programmable network connectivity that’s crucial to NFV’s success. By decoupling the data and control planes, SDN abstracts the underlying network hardware from both the control plane and upper-layer services. NFV takes direct aim at appliance sprawl. In too many networks the number of appliances rivals the number of switches and routers. Appliance capex is therefore large, but not even as large as the opex of the separate administrative staff each appliance family often requires. By allowing operators to run network services on off-the-shelf hardware, NFV reduces the need for expensive, single-purpose devices, cutting capex significantly — especially if multiple network services are consolidated onto one piece of hardware. NFV also lets operators locate functions wherever they’re needed, be that in the data centre, in network nodes or on the end-user premises. And NFV simplifies management. Rather than managing individual appliances, network operators — via NFV — can consolidate and automate the management of network functions using orchestration or policy software. This cuts management overhead and ensures consistent service operation across the network. Many network functions can potentially be virtualised — including firewalls; load balancing; network address translation; IP multimedia services or IMS; SSL offload; authentication/authorisation/accounting services; policy and charging rules functions; WAN optimisation; various aspects of content delivery networks; virtual evolved packet core services for wireless and mobile networks; and broadband remote access server functionality. Software processes These network functions can now be implemented in software processes that operators can control centrally and provision automatically with orchestration tools such as NFV’s management and orchestration, or MANO, as well as OpenStack and CloudStack. In effect, these SDN-based processes constitute the network’s brains, which can communicate to the body — switches, routers, gateways and so on — in an automatic, open and programmable way. 64 Global Telecoms Business CEO and CFO Guide to OSS/BSS: May/June 2014 What SDN brings to bear NFV does not eliminate the need to control the network from inside — many network services need the cooperation of the data plane, including firewalls and other security functions that require deep packet inspection at wire speed. Even if service chaining is done among virtual machines running in the same server with switching done in the hypervisor, the various network elements www.globaltelecomsbusiness.com Open Networking Foundation packets on their way. Consequently, servers can be placed anywhere and load balancing applied throughout the network as part of automatic traffic engineering, eliminating the bottlenecks of appliance-based load balancers. Other network functions could be implemented in a similar way. Gaining service agility The combination of NFV and SDN can help operators use every bit of spare network capacity to generate new revenue. Having a separate control plane makes end-to-end visibility and management of the network possible Dan Pitt is executive director of the Open Networking Foundation www.opennetworking.org/ must still move packets from the first entry point into the network to the first series of services that are chained together. With a combined NFV-SDN architecture, there’s no need for a network service to have a single ingress or egress point to the network, as, for example, load balancing has required to date. Rather, the first packet goes to the controller, which can apply a variety of traffic engineering and other processes before sending the packet — and its successors in the same flow — towards its destination. Once load balancing is virtualised, SDN can make it part of the path selection algorithm. That is, load balancing can be an augmentation to route computation, which itself is a control-plane software process, which could be running on a controller or elsewhere. Since the control plane monitors the network links and knows which paths are least congested, it uses this information to direct a query or data to the least congested server. OpenFlow or other SDN-supported mechanisms populate the forwarding tables of the switches en route. With load balancing a part of the path selection algorithm, the routing engine alone — which may or may not be coupled with the controller — can send www.globaltelecomsbusiness.com From the example above it’s easy to see how NFV and SDN can simplify service chaining — the SDN controller steers flows to their designated service functions on demand. Operators can simply use orchestration or policy tools to instantiate services across the network, which greatly simplifies new service creation; in many cases, services can be provisioned automatically by the orchestration tool. Likewise, the combination of NFV and SDN can help operators use every bit of spare network capacity to generate new revenue. For example, having a separate control plane makes end-to-end visibility and management of the network possible. An orchestration system can use this insight and control to identify excess capacity and dynamically spin-up billable services. For example, a customer can be given the opportunity to stream a video to a home device for later viewing. With multi-tenant services, operators can pass cost savings on to customers or entice them to take advantage of time-of-day specials even for routine services. Alternatively, operators can reduce energy costs by constructing active paths that exploit excess capacity and by turning off network elements in standby paths. By enabling operators to reuse and monetise network capacity during non-peak times, the combination of NFV and SDN helps offset investments in bandwidth and energy. For NFV and SDN to become reality, industrywide standards and protocols need to be agreed and the appropriate software need to be developed. ONF is committed to developing the SDN-based mechanisms and protocols to support NFV requirements and use cases. How operators can help NFV and SDN have tremendous potential to reduce operator capex and opex and to boost agility so that service providers can better compete. ETSI and ONF are committed to delivering the combined benefits of these technologies. Operators can help accelerate this process by making their requirements clear and working with organisations including ETSI and ONF to drive the virtualisation of network functions based on the most pressing use cases. Carriers also need to begin thinking like programmers. Rather than looking at the network as a collection of boxes that must be micro-managed, it’s crucial for operators to start thinking of it as a collection of software-controlled functions characterised by interfaces, modules, and abstractions that dynamically bend to the will of the operator and its customers. To transition successfully to a virtualised environment, operators must also embrace new business processes. The good news is that these processes will increasingly be customer-focused and more directly related to an operator’s bottom line. Q Global Telecoms Business CEO and CFO Guide to OSS/BSS: May/June 2014 65