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Leveraging NFV Infrastructure to Drive Revenue

Telcos today are looking for ways to increase revenue, reduce operation costs and manual effort, and to become more profitable. They want to be more agile, more innovative and they want to be in the driver’s seat when it comes to working with suppliers. Luckily, network functions virtualization (NFV) has the power to address each of these requests and more. As I put it, NFV brings the power of the cloud to the networking world.

But what about the specific question of increasing revenue? Consider the case of facilities-based operators who offer wholesale services to other service providers. One example of how NFV can be used to drive additional revenue is by enabling those facilities-based operators to augment connectivity services with micro-cloud deployments that can be used for NFV hosting services. Let’s take a look at why such hosting services are valuable to an out of region operator as well as how they can work.

NFV Deployed in the Access Network – An Opportunity for Micro Clouds

I’ve spoken frequently about how managed services provider Masergy has deployed NFV at its customer sites to enable innovative and dynamic services. Customers don’t care about NFV, but they do want on-demand services. Masergy has given its customers the ability to self-provision services at a portal that is connected to Masergy’s advanced web-services enabled control infrastructure. That infrastructure dynamically implements services by instantiating virtual network functions (VNFs) at the customer site. Masergy customers get the services they want when they want them.

Dynamic services are valuable to the customer, but NFV also provides value for Masergy. Oftentimes, Masergy’s customers are in remote locations and the use of NFV reduces the number of devices on-site down to one server, as shown in the following diagram:

With NFV, the previous stack of appliances (router, firewall and EAD) is replaced by a single server hosting VNFs. However, one server is still required. In addition, Masergy typically gains access to remote customers via a local facilities-based operator that also has an Ethernet access device (EAD) on site, as shown in the previous diagram. The facilities-based operator must install an EAD on-site as a delivery vehicle and demarcation point.

Masergy CTO, Tim Naramore talks about difficulties getting boxes across borders and through customs only to be installed and later unplugged when some other piece of office equipment needs a socket. The margin for error with multiple boxes, not to mention the expense, is high. That’s why Tim has said he really wants is to get his footprint down to no devices. It sounds like a pipedream but it is definitely possible! How? By having the local operator provide hosting.

Services With No Boxes

Instead of just providing connectivity, the local facilities-based operator can provide micro-cloud hosting. They would do so by installing a server or hybrid device and providing hosting for NFV-infrastructure-as-a-service (NFVIaaS), as shown in the following diagram:

By offering NFVIaaS, the local provider has the opportunity to provide a valuable wholesale service for out-of-region service providers like Masergy. Rather than ordering connectivity and then rolling a truck to install a server, the out-of-region service provider can order access coupled with NFVIaaS. Services can now be enabled with no equipment placed on site by the out-of-region service provider. The speed of installation is increased at the same time the cost is being reduced. Also, availability is increased by virtue of support provided by the local facilities-based operator.

Micro-Clouds: Managed Cloud Hosting On-Site

In addition to enabling wholesale services, the placement of compute nodes at the customer site can also be used to offer micro-cloud services to end users.

First, let’s look at a typical cloud service in conjunction with the service delivery discussed previously. A typical cloud access application is shown in the following diagram:

As shown, the customer deals with two entities: a service provider and a cloud provider. If there are issues with the application, the customer is not sure where the problem lies — with the service provider or with the cloud provider?

The complexities of this situation create an opportunity for the service provider. What if the service provider enabled a micro-cloud service located directly at the service edge? In the following example, a compute node is hosting both a virtual router as well as a micro-cloud.

As described previously, the facilities-based operator places the compute node on the end customer site as a part of a micro-cloud application on behalf of the service provider. The service provider can use that compute node for hosting VNFs and to resell a tiny data center for hosting applications for the direct benefit of end users.

There are limitations to the types of applications the end user can load. However, service chaining and distributed applications can help.

Service chaining ensures that only the necessary functions are hosted at the service edge. For example, security functions might be hosted at the service edge and chained to VPN functionality hosted in a metro data center. This allows customer requirements to be met while keeping resources minimized at the service edge.

Distributed applications perform a similar division of labor for the end user. Consider the case of network authentication for hotels. Today there are two parts to the implementation:

  • An application hosted in a central cloud that performs a lookup or billing function based on the credentials of the hotel guest.
  • An appliance that allows or blocks access based on input from the cloud application.

With the availability of a micro-cloud service at the customer site, the appliance could be replaced by a software application loaded by the hotel. The authentication application would remain in a centralized cloud, and the hotel corporation would have the benefit of not having to maintain an appliance at each hotel site.

How Does the Facilities-Based Operator Maintain Control?

I discussed how a facilities-based operator can drive additional revenue with a valuable NFVIaaS offering. However, there is a potential problem. How does this operator maintain control and ensure appropriate end user access to various resources when so much is virtualized in software or in the cloud?

Both the local facilities-based operator and the out-of-region service provider need to be able to access the server for their independent purposes. However, the local operator may be hosting more than one service provider on the same server. In addition, the out-of-region service provider may be offering a micro-cloud service. One operator refers to this situation as the “hydra problem” because one device would have multiple heads: local operator, multiple out-of-region service providers and multiple end users.

How does the facilities-based operator enable each of the service provider customers to access only their allotted resources? The answer is carrier-class management and orchestration, or MANO. By using a solution such as ADVA Optical Networking’s Ensemble Orchestrator, the local provider can provision, allocate and maintain the NFVI.

In addition, the operator can expose application program interfaces to each of the service providers, allowing them to view, control and maintain their VNFs, using only their allocated resources. Complete separation and multi-tenancy is enforced by the orchestrator, as shown in the following diagram:

A Win-Win Solution

All telco operators are looking for ways to be more agile and to drive more revenue. For facilities-based operators, deploying NFVIaaS is the single best bet for achieving these goals:

  • New revenue. NFVIaaS enables facilities-based operators to sell micro-cloud hosting in addition to pure connectivity services, providing a new revenue opportunity.
  • Competitive advantage. An NFVIaaS offering makes an operator’s connectivity services more valuable because their out-of-region customers can now turn up a customer without deploying staff or equipment.
  • Operationally sound. Multi-tenant orchestration ensures the smooth operation and customer isolation of the NFVIaaS solution.
  • Incremental solution. The NFVIaaS solution described here can be deployed as an augmentation of existing networks and management solutions. It gives facilities-based operators a way to start with NFV without making changes or adding new risk to their existing network backbone.

Getting started with NFVIaaS is a great way to explore NFV, get a team up to speed on the new technologies involved and drive new revenue.  What are you waiting for? New revenue opportunities are ready to be realized!

ADVA Optical Networking