Capturing the Promise of Virtualization

Network virtualization coupled with automated management is rapidly evolving into a game changer for next-generation communications service providers due to growing market demand for flexible, agile and cost-efficient multi-service support.

However, the possible gains are being eroded by existing management information silos, hampering flexibility and resulting in operational inefficiency. One estimate by Wipro and Orchestral Networks derived from telcos' annual reports, outsourcing contracts and a financial model developed with a telco, shows that even small telcos could be paying upwards of a $400 million operations and integration tax every year.

For larger telcos, such as one large US telco with over 200 different inventory management systems, the costs could be three times that. The risk is that, if the silo problem is not addressed first, network virtualization can add to the silo problem and make things worse rather than better.

Profusion confusion
Telcos, by their very nature, have long-life system elements spread over large geographies with fragmented management and information systems. At the user information level, data flows. But at the operational level, there are a profusion of non-compatible interfaces. This profusion of non-compatible interfaces is a result of organizational divisions, histories of mergers and product strategies of vendors.

Although telcos push for standards, vendors seek to have proprietary interfaces to let them differentiate their products and innovate. Unfortunately, this large number of non-compatible systems is not static. Vendors are doing software upgrades on installed system components and technology is evolving rapidly.

Today, this large number of incompatible interfaces is held together by large numbers of engineers and technicians doing highly manual operations tasks. Compared to automated operations, the highly manual systems generate an additional annual cost for a small telco in the range of $400 million per year (as per Wipro's and Orchestral Networks' estimate from the same sources noted above).

Even to support the highly manual mode of operations, significant systems integration work attempting to tie together these non-compatible systems is required. Because of the large number of management interfaces, the fact that they are changing, as is conventional systems integration technology, this systems integration work is ongoing and struggles to catch up.

The result is only partially integrated ops with a large and growing annual systems integration cost. Because of its ongoing nature, some have begun to characterize this cost as the "integration tax." As networks have grown in size, complexity, and volatility this integration tax has started to grow exponentially.

The resulting manual partially integrated network suffers problems in quality of service (QoS) that result in a degraded quality of experience (QoE) for the end customer. To attempt overcome these QoS/QoE challenges, more resources are thrown at the network than would otherwise be needed, thereby increasing capex.

Finally, these highly manual, partially integrated operations systems dramatically limit the speed of development and deployment of new services leading to diversion of revenue to OTT providers.

Managing the problem
A few decades ago, these problems were manageable. The dramatic growth of wireless, Internet and optical networks with their concomitant increases in complexity and volatility has grossly exacerbated the problem. Combined with subscriber saturation it has created a serious financial problem. The financial problem can be seen documented in telcos' financial reports going so far in some cases as 25% to 50% reductions in dividends.

Network function virtualization (NFV) focuses on the "cloudification" of telco data centers. Software-defined networking (SDN) focuses on moving network control plane functionality from special purpose hardware to software running on general purpose computers and the ability to program the network through service chaining. These transitions promise cost savings and increased flexibility and agility.

However, given the long useful life of installed legacy systems, the transition to NFV and SDN will take decades. The danger is that in this transition period, NFV and SDN will produce more incompatible operations data silos, increasing the integration tax. This increase in the integration tax has the potential to more than offset the savings from NFV/SDN.

If, on the other hand, a product solution to the operations data silos problem can be deployed in such a way as to reduce manual operations and the integration tax while providing a graceful on-ramp to NFV/SDN, then the full benefits they promise can be realized.

In follow-on articles, we'll discuss the key issues surrounding a practical solution of the operations data silos problem.

— Mark Cummings, CTO, Orchestral Networks, and Jayanta Dey, CTO, Media and Telecom Business Unit, Wipro, special to The New IP