winning the battle for service provider it: a business case for network function virtualization
DESCRIPTION
While production deployment of network function virtualization (NFV) elements is still a year or more away, service providers are working closely with suppliers to define their requirements. This momentum requires suppliers adjust their product mix and margin expectations and cooperate in open-systems environments. This webinar will highlight the critical success factors that will enable suppliers to gain an edge in the early days of NFV. On Tuesday, May 20, 2014, Executive Analyst Michael Sullivan-Trainor shared his perspective on the latest trends and provide webinar attendees with additional insight into vendor performance and the future of the NFV market. He then fielded questions from the audience. Questions for discussion will included: 1. What are the latest concrete results of the business case for NFV? 2. What are the opportunities and challenges for suppliers? 3.Which suppliers are best positioned to win share, and why? 4.How can we segment the customer opportunity?TRANSCRIPT
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TECHNOLOGY BUSINESS RESEARCH, INC.
Network Functions Virtualization:Critical Success Factors
Technology Business Research (TBR) Quarterly Webinar Series
May 20, 2014
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Webinar Presenter
Michael Sullivan-TrainorExecutive Analyst, Networking and Mobility Practice
Email: [email protected]
Twitter: @mikest
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• The NFV chasm
• Reviewing the pressure points
• Current public map of NFV Proofs of Concept (POC)
• What do service providers expect?
• What are the critical success factors?
• What are the primary suppliers’ strategies?
• What does NFV partnering mean?
• Who is in the lead?
• What’s next?
AgendaNetwork Functions Virtualization: Critical Success Factors
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What will it take to cross the chasm?
Network Functions Virtualization: Critical Success Factors
2014 to Early 2015More than 20 Tier 1public POCs; twice as many private trials
2015 to 2020 and BeyondProduction platformsscaling with new servicesand “cap and grow” strategy
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Reviewing the pressure points
Network Functions Virtualization: Critical Success Factors
Out-of-control spending
• Opex has grown from 77% of total service provider spend to 82% since 2002.
• Data traffic will grow tenfold by 2019, requiring capacity builds and spectrum purchases.
Punishing business model
Competitive pressure
• Saturated markets causing price wars, dropping ARPU
• Content and OTT players reaping value from data services, while service provider voice becomes commodity add-on
Lower costs while accelerating time to new revenue required
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More than 20 proof-of-concept projects worldwideNetwork Functions Virtualization: Critical Success Factors
Service ProvidersAT&T (3)British Telecom (4)CenturyLink (1)China Mobile (1)ChinaTelecom (1)DeutscheTelekom (2)KPN (1)KT (1)NTT (1)Optus (1)Orange (2)Sprint (2)Telecom Italia (2)Telefonica (9)Telenor (1)Telstra (1)Verizon (2)Vodafone (2)
SuppliersAlcatel-Lucent (3)Brocade (2)Cisco (2)ConteXtream (1)Cyan (2)Dell (2)Ericsson (1)Fujitsu (1)Guavus (1)HP (2)Huawei (6)IBM (1)Intel (6)Juniper (1)Metaswitch (1)Overture (1)PLUMgrid (1)Radware (1)Red Hat (1)Spirent (2)Wind River (1)
vIMS vEPCvCDNSDNvDC
QoSBSSGiLANvHome GWvDPIvBRAS
ManagementAutomationOrchestration
POC Projects
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What do service providers expect?
Network Functions Virtualization: Critical Success Factors
Perform
Scale Integra
te
New E2E ICT
Process/ Platfor
ms
Managed, Orchestrated, Automated
Open, Shared, Efficient
Increase utilization
Reduce man hours
Decrease energy
Consolidate hardware
Onboard faster
Reduce support cost
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What are the critical success factors?
Network Functions Virtualization: Critical Success Factors
The successful supplier will be able to deliver value as an end-to-end (E2E) service owner, as well as at each level of the network architecture, including:
• Developer ecosystem to quickly onboard new applications and services
• Virtual functions to enable the services
• Virtual resources to enable distribution and execution of the functions
• Physical resource consolidation
• E2E management, orchestration and automation
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What are the primary supplier strategies?
Network Functions Virtualization: Critical Success Factors
Embedded Partner
Differentiate through certification, PMO, partner and legacy integration (Ericsson)
Differentiate through MANO, function(s), SDN or transport (Alcatel-Lucent)
Provide critical platform in IT partners’ solutions (Nokia Networks)
Critical Platform
E2E Owner
Differentiate through hyper-visor, converged infrastructure, etc. (EMC)
Network IT
ICT (Huawei, Cisco)
Differentiate through certification, PMO, partner and legacy integration (IBM)
Provide critical platform in network partners’ solutions (VMware)
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What does NFV partnering mean?
Network Functions Virtualization: Critical Success Factors
Bundled offer
Mutual integration
Co-development
Examples: • ALU-Intel for performance improvement• ALU-Red Hat for Open Stack extensions• Dell-Red Hat for OpenStack collaboration• Ericsson-Ciena for Optical Transport Control
• IBM-Connectem for vEPC • IBM-Juniper for SDN• Cyan-Kenton for orchestration and transport
• New ecosytem:oOpenstack, DMTF, Open Daylight, ONFoVendor ecosystem (ALU CloudBand)
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Who is in the lead?
Network Functions Virtualization: Critical Success Factors
Alcatel-Lucent
Huawei
Ericsson
Cisco
Gaining traction (at least in POCs) with Softcom, an ICT solution two years in the making. Leading in breadth of platforms, but lacking services strength to be an E2E Owner outside installed base.
Head start in trials with Tier 1 service providers with Critical Platform for networks play encompassing SDN, NFV and MANO. Most likely to see new revenue through production deployments first.In for the long haul, Ericsson already placed its focus on E2E Owner strategy — its AT&T Domain 2.0 win was a proof point. Network portfolio and capabilities combination relies on IT and transport partnerships. New IP Cloud BU is further evidence of strategic focus on NFV/SDN.Broadest SDN/NFV-ready platform, combining network and servers, but lacking functions and storage. Will gain share through legacy integration.
HPRe-energized CMS team through virtual NFV organization, but servers and storage legacy vulnerable to migration to commoditization. Opportunity to be embedded partner through ALU, Ericsson, Nokia.
IBM Partner-focused strategy will lead to some embedding and some E2E Owner opportunities. Needs greater focus on NFV — own architecture, stronger marketing focus.
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What’s next?
Network Functions Virtualization: Critical Success Factors
SP NFV SP
NFV
SP NFV
SP NFV
SP NFV
SP NFV
SP NFV
SP NFV
SP NFV
SP NFV
SP NFV
SP NFV
SP NFV
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Questions?Q&A
Michael Sullivan-TrainorExecutive Analyst, Networking and Mobility Practice
Email: [email protected]: @mikest
James McIlroy Vice President of SalesEmail: [email protected]: 603.929.1166
Twitter: @TBRincSlideShare: www.slideshare.net/TBR_Market_InsightYouTube: www.youtube.com/user/TBRIChannelLinkedIn: www.linkedin.com/company/technology-business-research
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NMP Syndicated Research CoverageTelecom Vendors Operators Benchmarks
• Accenture Telecom and Mobility*
• Alcatel-Lucent• Cisco Systems• Ericsson• HP Telecom and Mobility*• Huawei*• IBM Telecom and Mobility*• Juniper Networks• Nokia Networks• Samsung Networks*• ZTE*
• AT&T• Sprint• T-Mobile USA• Verizon
Enterprise Coverage:• AT&T Business Solutions*• BT Global Services*• Orange Business Services*• Verizon Enterprise Solutions*• Vodafone Enterprise Services*
• Telecom Vendor Benchmarko Telecom Infrastructure Services
(TIS) TIS Benchmark TIS Margin Benchmark TIS Addressable Market Forecast TIS North America Addressable
Market Forecast• Enterprise Network Vendor Benchmark
o Enterprise Networking Addressable Market Forecast
o Network Infrastructure Services (NIS) Benchmark
• U.S. and Canada Mobile Operator Benchmark
Enterprise Networking Cable Providers(Reports include content on Ent. Networking)• Accenture Telecom and
Mobility*• Cisco Systems• HP Telecom and Mobility*• Huawei*• IBM Telecom and Mobility*• Juniper Networks
• Comcast*• Time Warner Cable*
Internet Companies
• Google• Microsoft Telecom and Internet*
TBR Networking and Mobility Practice Syndicated Coverage
*Semiannual publication
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TECHNOLOGY BUSINESS RESEARCH, INC.
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