Each architecture shift brings the opportunity for a new supplier to break into the service provider ecosystem, and even to dislodge an incumbent. The convergence of networks and IT, both in technical and organizational terms, has introduced IBM, Oracle and others to the heart of carrier activities. Small cell HetNets may increase the punching weight of currently minor RAN providers like Samsung and NEC (the European Commission clearly thinks so, based on its reasons for green-lighting the Nokia/Alcatel-Lucent merger). Cloud-RAN could push Intel-driven platforms into the access network. And increasingly, what will hold all these developments together will be software defined networking (SDN), which is seen by enterprise infrastructure heavyweights as a way to increase their carrier business, and perhaps disrupt Cisco and Ericsson along the way.
In the run-up to the summer lull, there were many indications of this during the quarterly earnings round. Many vendor hopes, in the short to medium term, revolve around NFV (Network Functions Virtualization), which may be only a stepping stone to the full SDN vision, but is a platform which has been embraced by carriers, and relatively harmonized, in record time. OpenDaylight recently highlighted NFV as a leading use case, as did several vendors during their results announcements.
For instance, enterprise virtualization giant VMware was clear that NFV was its route into the service provider space, since operators are now adopting technologies which are already prevalent in data centers – though often on a bigger and even more mission-critical basis. VMware CEO Pat Gelsinger – familiar with this journey from his period as Intel’s CTO, when he was pushing enterprise technologies towards the mobile world – said NFV would allow his firm to leverage its existing platforms in a sector “we’ve never participated in before”, and added that Vodafone, Ooredoo and IIJ Japan were all deploying NFV from VMware. Carriers “want to virtualize their infrastructure and get rid of silos of gear just like the data center has done over the last decade, so it’s very analogous. This is a large potential,” Gelsinger said.
The company introduced software in March to let carriers run OpenStack and the company’s own vCloud cloud manager side by side. VMware vCloud for NFV aims to give operators a migration route to OpenStack, which it thinks will be a de facto standard by 2017, while running vCloud for production cloud services until OpenStack is fully robust.
Meanwhile, Juniper is relying on NFV to give it a way to outwit Cisco. The latter has committed strongly to virtualization but, of course, has various conflicts of interest with its desire to maintain its traditional hardware base as long as possible. Juniper has some of the same dilemmas but a smaller base to defend, which may give it greater willingness to adopt an aggressive SDN strategy. CEO Rami Rahim said on the earnings call that Juniper was seeing strong demand for NFV, especially from service providers, and that the technology, along with broader SDN, were “part of pretty much every strategic discussion that we have, particularly with the service provider and sometimes in the enterprise”.
This quarter, the firm recognized its first revenue on its virtual MX edge router and it is also seeing interest in its virtual SRX firewall, Rahim said. Key to Juniper’s offering is its Contrail orchestration software, which is competing with VMware, Cisco and others to provide the dominant networking stack for OpenStack”.
These signs of lively interest from carriers will translate into a global market for NFV worth $11.6bn by 2019, up from $2.3bn this year, according to forecasts from IHS. “NFV represents operators’ shift from a hardware focus to software focus, and our forecasts show this,” said senior research director Michael Howard. “We believe NFV software will comprise over 80% of the $11.6bn total NFV revenue in 2019.” The rest will go on servers, storage and switches, but these bills will be far lower than those for software because of commoditization on the hardware side.
The analysts also sound a note of caution, warning that – as with so many technology shifts in the past – many operators are over-optimistic about the speed with which they can deploy and see tangible benefits. Only 8% of operators worldwide are running IMS in an NFV environment, the research firm gave as an example, and the analysts were sceptical of survey results in which 80% of carriers said they would have elements of their IMS virtualized by 2017. However, report co-author Diane Myers said: “One of the biggest drivers for NFV is the ability to scale services up and down quickly and introduce new network services more efficiently and in a timely manner, which makes IMS a good early fit for NFV.”
Also on the NFV front, China Mobile and Alcatel-Lucent have completed the first live field trial of a virtualized RAN based on the ETSI specifications. ALU’s vRAN technology was deployed throughout the 442 hectares of Beijing’s Tsinghua University campus. A key aspect of the trial is to demonstrate how a vRAN can dynamically scale network resources in response to varying traffic demands within an area, expected to be an important aspect of 5G.