Vodafone looks to set new SDN procurement norms for the whole industry

Transforming an operator’s network is not just about rethinking architectures – new pricing, skills and business processes may be just as difficult to implement. This has been the task of David Amzallag, group head of SDN and NFV at Vodafone, who is leaving the role in June.

One of his legacies will be a new set of vendor agreements and pricing models to support Project Ocean, Vodafone’s huge, global network transformation initiative. This is a successor to Project Spring, which focused on physical network upgrades in wireless and wireline. Comparable to AT&T’s Domain 2.0 program, it is driving Vodafone towards software-defined, virtualized and cloud-oriented architectures.

But like AT&T, Vodafone needs to rewrite the rules of how it deals with its suppliers, and in some cases introduce new ones. It will announce major new supplier agreements for OpenStack and virtualized CPE in the coming weeks, Amzallag said in an interview with LightReading last week, as the operator prepares to go live with some elements of Ocean.

One aspect will be a simpler pricing model, which will be less centered on volume and will be cloud-based. In a Rethink survey of over 70 operators, conducted in the last quarter of 2016, one of  the top five barriers to deploying virtualized networks was uncertainty over pricing models, especially as the spending shifts from hardware and capex, to virtual network functions which will often be purchased as opex, on a pay-as-you-go basis.

Amzallag said Vodafone polled eight vendors about potential new pricing models, but they all came up with different approaches. “The pricing model needs to support the cloud and not remain on bare metal and on boxes,” he said in the interview, complaining that current models do not take account of one of the key benefits of SDN/NFV – the flexibility to turn capabilities up and down as required, and pay accordingly.

The executive believes the telecom industry must get into the mindset of a cloud provider like Amazon and come up with a generally accepted model that is based on cloud services norms, not volume or other traditional measures. Vodafone is developing its own pricing model, but this is very much a ‘straw man’ for others to refine, and will require broad industry support. If each operator and vendor has its own model, it will be chaotic to administer procurement and maintenance of the new networks, and there will be limited economies of scale.

However, it already has agreement from its two SDN controller suppliers – Nokia Nuage and Juniper Contrail – to its new pricing structure.  There will clearly be significant pressure on others to do the same if they want a place in one of the world’s most advanced carrier SDN programs. Vodafone will announce its OpenStack, CPE SDN controller and CPE suppliers in the next couple of months, followed by services orchestration partners within six months. There will be at least two vendors in each category and local operating companies can choose which ones to use.

On the technology side, Project Ocean has now produced an end-to-end architecture geared to two sets of use cases – enterprise services, and centralized management of core services across a region. The architecture supports orchestration both at the domain layer and services layer to enable flexibility for different operating companies in the group to pursue their own business strategies.

“Domain is a logical term – so every country, every operator is flexible to define its own concept of a domain,” Amzallag told LightReading. “It can be a geographical region – so for Vodafone Germany, it could be just the network in Munich or the entire network of Germany – or just the slice of IoT in Spain in the sense of network slicing.” Each domain is associated with its own domain orchestrator and the overall architecture defines how domains interact with each other and with the services orchestrator.

In both the architecture and the pricing/procurement model, Vodafone, like AT&T, will hope to drive norms for the whole industry, to improve its own business case and economies, and to enhance its influence. It already has four non-Vodafone operators which have joined Project Ocean, though their names have not yet been divulged.