Director of Engineering, Service Provider, Asia Pacific Japan

29 January 2016

Changing the Economics of Data Center

Virtualization Strategy

Chia Tan; chiatan@cisco.com

A. Overview

B. What are the Drivers?

C. What are the Considerations?

D. What are the Strategies for deployment?

E. SDN-NFV deployment Examples

F. Cisco’s solution offering

Virtualization Strategy Topics

(A) Overview

NFV-SDN Timeline

2014 2020 2013 2014 ～ 2016

POCs • Operators, vendors learn in lab • Few field trials

Field Trials • Vendors productize NFV/SDN software in operator lab trials • A few more field trials • ～ 10 Commercial deployments

Early Commercial Deployments • Many operators deploy 1 or 2 use cases • ～ 40 more commercial deployments

Wider-spread Commercial Deployments • Mainstream Adoption • Operators deploy several NFV/SDN use

cases, then more each year

Source: SDN and NFV Vendor Leadership/Global Service Provider Survey, Infonetics, Aug. 2015

NFV/SDN Telecom Market Landscape, Technical Business Research, Oct. 2015 Cisco Service Providers Survey, Nov 2015

2022

Late Majority

Total SDN-NFV Spend by Region

Sept 15

Telco NFV Adoption of Applications & Spend

Sp

en

d

Spend

Evolving Network Function Trend

3

1 2

Source Dell Oro April 2015

(B) What are the Drivers for SDN-NFV Adoption?

Key SDN-NFV Benefits

Features Benefits

Automation OpEx Reduction, Network

Simplicity and Service Velocity

Hardware & Support Reduced HW CapEx and OpEx

Web Portal & Self Serve Customer Friendly

Real Time & Elastic Services Optimize Resources

VMS Cash Flow and ROI

Cloud VPN Services Cloud Security Services

NPV: $286M

IRR: 214%

NPV: $534M

IRR: 220%

Source: ACG Research

TCO Comparison for Cloud VPN Services

Source: ACG Research

76% Reduction in TCO Delivering Cloud VPN

Business Customers Want the Benefits NFV-SDN Can Deliver Nearly 9 out of 10 Found at Least One Desirable

32%

28%

40%

18%

33%

35%

25%

38%

42%

40%

29%

26%

40%

33%

48%

24%

26%

17%

21%

21%

39%

41%

48%

34%

36%

28%

20%

22%

22%

31%

52%

48%

36%

34%

45%

34%

31%

47%

50%

40%

28%

28%

40%

30%

43%

32%

25%

20%

28%

22%

27%

20%

29%

33%

31%

27%

18%

24%

10%

27%

Simple and easy service

ordering and self-provisioning

Automated service and network

provisioning, account

management and configuration

Ongoing service capacity scale

up or down as needed

Consumption/usage based

billing (flexibility to be billed for

what you use)

Turn service on/off

on demand

Highly Desirable Somewhat Desirable

NA LATAM MEA APJ WE CEE

Source: AMI-Partners

Service Providers Preferences to Get Access to NFV-SDN Benefits

47% 47%

34%

68%

31%

44%

NA LATAM MEA APJ WE CEE

Switch from current

providers to specific

service providers that

offer such benefits

Source: AMI-Partners

Infrastructure & Support Benefits

Traditional Network Physical and Virtual Network

Complex and expensive: Each device is unique

Simple: Common equipment, software and processes

Hardware

Maintenance

Hardware Test

and Certification

Rack Space and

Power Management

Upgrade Line Cards

for New Features

New Software =

New Appliance

Standard

Servers

Standard

Switches

Modern Data Center

Standard Data

Center Software

Standard Data

Center Processes

NFV Use Case Results

YEAR 1YEAR 2YEAR 3YEAR 4YEAR 5

PMO CAPEX PER SESSION

FMO CAPEX PER SESSION

YEAR 1YEAR 2YEAR 3YEAR 4YEAR 5

PMO TCO PER SESSION

FMO TCO PER SESSION

CAPEX Savings: 49% TCO Savings: 52% IRR: 136%

CAGR

PMO 14%

FMO 8%

CAGR

PMO 13%

FMO -5%

Savings (CAPEX)

Innovation and Agility – DevOps, Open Source

(C) What are the SDN-NFV Considerations

Carrier Class Performance, High Availability, Secure, Scalable

Multi Hypervisor, Open, ETSI Compliant, Modular, Elastic and future ready

Management & Work Flow Automation on Single Pane of Glass

Integration between multiple NFV domains: Single Point of Ownership

Operational Skillsets: Software skillsets, Programmability, Interop

1

3

4

5

6

Optimize Cost Operational Simplicity Open Architecture

Host Multiple VNF Physical and Virtual from Multiple vendors 2

SDN-NFV Considerations and Requirements

1: Automation and Orchestration Accelerates Service Velocity

Traditional Physical Network

Help Desk

Physical and Virtual Network

Labor intensive: Low service velocity

Automated: High service velocity

Hardware

Maintenance Provisioning Web Portal

Modern

Data Center

Automated

Orchestration

2: Workload Distribution Deployment Options for NFV

Infonetics Service Provider NFV Survey, 2015

Macrocell Radio

Business CPE

Appliances, GiLAN

(L4-L7)

Backbone, Metro and DC

switching

Wire-line GWs

Smallcell Radio Home CPE

Mobility

GWs

CPU

Reqs

0 10Mbps 100Mbps 1Gbps 10Gbps 100Gbps 1Tbps 10Tbps 100Tbps 1Pbps

High

Low

Distributed: CPUs + Lots of NPUs

Distributed: Lots CPUs + NPUs

Centralized:

CPU + NPU

CPU

Distributed: SoC

Variable CPU / FPGA / NPU

OSS/BSS, IMS

& Policy control

Mobility

Management (MME)

Small Cell

GWs vEPC

vFW vNAT

vLB

Hybrid Cloud

vCDN

vIMS

vVO*

vDPI

ePDG.

vVAS

MME/SG

SN

*vVO: Video Optimization

3: VNF Considerations (ETSI)

4: Security

5: Organizational Considerations

5: Organization Considerations

(D) What are the Strategies for SDN-NFV Deployment?

1: Deployment Strategy Options

2: NFV Deployment Approach

Service & Infrastructure Policies

Ma n a g e me n t and

O rch e st ra t i o n (MAN O )

VN F VN F VN F VN F

EMS EMS EMS EMS

VNF

Use Case Led

• Service driven

• Service Agility • Business outcome

NFVO

Orchestration

Led

• Service Elasticity

• Ease of Provisioning • Time to Market

NFVI Infrastructure Led • Virtualize, Programmable

• Cloudify & Automate Infra • Leverage Opensource

Infrastructure led approach

aka NFVI is gaining prominence!

SP’s OSS/BSS

Virtualized Infrastructure

Physical Infrastructure (Compute + Storage + Network)

Use Case

Specific, e.g.

vMS, VPC

Includes

VNF-M and

NFV

Orchestrator

Hardware, VIM (OpenStack)

and SDN Controller

3: IT and NFV

Virtualize, Consolidte Network Infra

SDN Policy Model

Self-Service

Automated Provisioning

Service Elasticity

(Capacity on Demand)

vFirew all

Web/Email

Security

CCaaS

DRaaS

HCS

HadoopaaS

OSS/BSS/Billing/CRM/

Customer Care

Dev Ops

DaaS

Public/Hybrid Cloud Services IT & Network DC

Big Data

IoE/IoT

Bare Metal

Services IaaS

IT Clouds

Mobile/Social Apps

IT Business Apps Workload

Mobility

Broadband

Vbranch/vMS

Virtual PE

Router

Virtual BNG

Virtual EPC

Virtual GiLAN

Mobile Media/Video

Cloud

DVR

vCDN

Virtual

Security

Virtual DPI

Appliances

Policy Control,

AAA, DHCP,

DNS

Telco DC: NFV Workloads

Telco Cloud

vRoute Reflector

Virtual WLC

Virtual

IMS/VoLTE vTrancod

er

1 2

4: Agile Development MVP (Minimal Viable Product*)

*Eric Ries, Steve Blank

(E) SDN-NFV Deployment Examples

SDN-NFV Adoption Update

Inf onetics Sept 2015

Current Operator Adoption

Considering or Early Stage

Market Deployment Leaders

• Telco Cloud Transformation

• Introduce cloud technologies in VF networks to deliver more efficient, reliable and differentiated networks for the future combining Telco strengths and Cloud benefits

• First Telco Cloud applications virtualized and introduced in live network in 2013 with strong further expansion during 2014

• Vodafone and Cisco are worldwide pioneers in the field of life Telco Cloud deployments learning together and developing our virtualized network

• Cisco is prime contractor and e2e-integration partner for several virtualization projects (e.g. vNGN, VoLTE, vEPC)

• Driving design, testing and network implementation steering further partners

Case Study Cost Reduction: VF Germany

NFV Organization Model

Operation Team

Physical/Current

NFV-I Operation

VNF/Tenants Operation

Corporate Team

Finance

Biz Unit

Legal

Planning/Design Team

NFV/NFV-I Planning/Design

Current/Physical Design

Delivery Team

VNF Tenant

NFV-I

Current/Physical

OSS Team

Physical/Current OSS

NGOSS

Service Assurance

Physical/Current

NFV Solutions

Service Provider

Organization

Devops

NFV DevOps

Team

Organization Readiness

• Skillsets • Process

• Tools

(G) Cisco’s Solution

Cisco Confidential

Cisco Solution Offering

Compute Storage Network

Virtualized Compute Virtualized Storage Virtualized Network

Unified, Flexible and Agile Platform driving SP Infrastructure Transformation

Sin

gle

Pane

of G

lass

Manag

em

ent

Virtual CPE, Security

Mobile, VAS Media Cloud XaaS

Virtual Infrastructure Manager

SDN Controller

Serv

ice A

ssura

nce

Orchestrator

EMS

VF

EMS

VF

EMS

VF

EMS

VF

Summary

People Process Tools

SDN/NFV is a strategic technology transformation

• Its not about virtualizing a VNF on a bunch of servers • Its about hosting VNFs on a Open, Programmable, Intelligent

Network Infrastructure with flexibility to Manage and Automate

Services

Leading to high Operational disruption …

a) Cost Savings

b) Revenue Impact – Reduce Churn, Differentiated Offering, TTM…

c) Investment Protection

d) Not currently planning

Question 1 What will be the Primary Driver for SDN-NFV

a) Driven by Virtual Network Function e.g. Mobile Core, IMS, vCPE…

b) Bottom up – Define a NFV Infrastructure (NFVi) Systems Approach

c) End to End – Define Orchestration, to VNF Management to NFVi

d) Not started SDN-NFV

Question 2 What if your organization’s Approach to SDN-NFV

a) Best of Breed for each component in the SDN-NFV Architectyre

b) In House Development & Engineering

c) Partnership with Vendors/Providers to implement Tested Systems offering

d) Not started SDN-NFV

Question 3 What is the Primary Adoption Plan for SDN-NFV?