SDN and NFV – The Twin Disruptive Technologies Driving Innovation in Data Center Networks Market Insight by Frost & Sullivan in collaboration with Pacnet www.frost.com www.frost.com SDN and NFV IT as a Service The Next Dimension Frost & Sullivan research has identified four Mega Trends that are set to transform industry verticals – the rise of cloud and big data; ubiquitous wireless broadband; mobile apps; and the Internet of Things (IoT). Figure 1: Four ICT Mega Trends Ubiquitous Wireless BB WiFi, 3G, and LTE becoming standard connectivity modes. Industry Verticals Rise of Cloud and Rise of Apps Big Data Cloud and Cloud allows access mobility driving to content on the emergence any device in any of apps that can location. While Big be used on any Data enables value IP-enabled device. to be extracted out of the exponential increase in data. Internet of Things IPv6 driving proliferation of IT-enabled sensors/ devices across industryspecific activities Source: Frost & Sullivan 2 SDN and NFV www.frost.com While some initiatives are already underway, these new technologies are increasing the pace of innovation and expediting implementation. For instance, in the construction industry smart buildings can deploy information technology (IT) to control lighting and ventilation based on data received from environmental sensors placed throughout the building. The growth of online shopping, the roll-out of smart meters, and the introduction of connected cars are transforming the retail, energy, and automotive industries, either triggered or accelerated by these four ICT Mega Trends. These Mega Trends have deep-rooted implications on IT and the role of the CIO. Organizations today view the IT department as a key stakeholder in their business decisions going beyond its traditional role of distributing, delivering and optimizing IT resources usage. As a result, the IT infrastructure needs to be agile and flexible to cater to the changing demands of its internal customers. A scalable IT environment can support innovations and drive new revenue streams to enhance an organization’s risk appetite through limited upfront investments. As more businesses recognize the benefits of integrating developments into their overall IT strategy, IT is increasingly being embedded into business functions and tasked to drive innovation across organizations. As the focus of IT shifts to innovation and customer experience from service delivery and security, this drives the evolution of IT departments to become service integrators where they offer Information Technology as a Service or ITaaS to customers. Software-Defined Everything Accelerating IT Transformation Old modes of configuring and working in technology are no longer sustainable to meet current – and future –demands. The role of IT today is to drive innovation and efficiency with limited budgets. Frost & Sullivan has established a roadmap for IT transformation to navigate enterprises through this “journey of change” towards implementing an ITaaS environment at data centers. 3 www.frost.com SDN and NFV Figure 2: Frost & Sullivan’s IT Transformation Roadmap Consolidate Optimize Automate Manage Resource virtualization Shared resource pools Self service catalog Monitoring Efficiency improvement Resource orchestration Reporting Analytics Life cycle management Metering & billing Consolidate Virtualizing server, storage systems, applications, network infrastructure and end points to more efficiently utilize the current infrastructure. Optimize Aligning storage, network, and service management layers to support the needs of a virtual infrastructure (Protocol enhancement – STP and architecture redesign – moving from three-tier networking infrastructure to two-tier, and adoption of open frameworks such as OpenFlow for SDN) Automate Envisaging workflow automation for Cloud provisioning, orchestration, lifecycle management, and billing. Orchestration is important to reduce human effort. Manage Monitoring, reporting, and analytics are key requirements in the management phase. Visibility allows for continuous improvement of infrastructure and informed decision-making for future capacity planning or business models. Source: Frost & Sullivan The transformation is being accelerated by a new set of technologies which together are referred to as software-defined everything, or SDx, which follows virtualization and cloud computing in the IT evolution. The most compelling SDx value propositions are the orchestration and automation capabilities included in many offerings. In an SDx approach, the orchestration platform synchronizes all the components according to pre-set policies and best practice configurations. This allows the enterprise to add or grow applications or services, because every component – the servers, storage, network and services such as security – is available at a moment’s notice. The best practice policies enable quick deployment, minimal mistakes, and enhanced security, as well as compliance and resource optimization. Several providers have adopted this application-centric focus, which Frost & Sullivan believes will transform the next generation of IT in enterprises. 4 www.frost.com SDN and NFV Virtualized Networks The Missing Link Virtualization rests at the core of SDx. However, it has been mainly limited to servers and extended to storage in the past decade. While server and storage virtualization have witnessed tremendous adoption from service providers, their networks remain “unvirtualized” which limits true optimization and the creation of shared resources. What’s more, the increasing number of bandwidth-heavy applications and delivery models such as cloud computing, corporate video, and mobility solutions is placing heavier pressure on network infrastructure, and creating new challenges for IT departments in the network space. Figure 3: Network Performance Challenges 1 Latency problems are not solved by bandwidth addition. 4 Data center consolidation and cloud computing creating distance between IT resources and users. 2 Network congestion owing to “Chatty” protocols. 5 Bandwidth addition limited by costs and availability 3 Applications getting increasingly pervasive and complex. Source: Frost & Sullivan Upgrading the network infrastructure is budget-intensive and can result in disruptions to the daily workflow. Hence, the need for alternative technology that provides users with greater flexibility and control over network resources. The Rise of Network Virtualization Completing the SDx Vision Recent innovations in network virtualization herald a new direction for service provider networks to overcome network performance challenges. The technological innovation of Software-Defined Networking (SDN) and Network Function Virtualization (NFV) are giving us new ways to achieve unprecedented, and increasingly necessary, level of automation and programmability. What is SDN? Software-Defined Networking is an emerging network architecture that seeks to decouple network control from the data planes of associated IP equipment such as routers and switches. It provides an abstraction layer between physical and virtual network elements (and devices) at the infrastructure level; and defines a new centralized intelligence and control layer. This centralized control layer manages network device configuration – in addition to network services now separate from those devices – by using an open, multivendor SDN Controller. The northbound side of the SDN architecture separates the application 5 www.frost.com SDN and NFV and infrastructure layers, allowing for new application programming interfaces (APIs) to network applications and orchestration, as well as operations and business support systems (OSS BSS). For now, communications and control between these layers are facilitated through the relatively new protocol, OpenFlow, which has become an industry standard. What is NFV? Network Function Virtualization began as a data center technology, where proximity and economies of scale made it an obvious technology choice. Virtualization accelerated as an enabling component of cloud computing. Applying it to disperse, diverse, and complex environments such as a telecom network takes more evaluation, planning, and fortitude. However, advances in commodity hardware platforms have made the effort worthwhile. At its most basic level, NFV is a way to leverage standard, low-cost yet high-performing servers as replacements for expensive, proprietary hardware currently in use, or planned for, in an operator network. Network Virtualization Benefits for Your Business The SDN and NFV technologies bring immense benefits to help enterprise IT evolve into a service integrator and implement the ITaaS vision: 6 Rapid provisioning of network resources Through self-service capabilities, users are able to choose the infrastructure when they want it and how they want it, from a pre-defined set of options. Provisioning templates allow for easy and efficient spin out of new network circuits. Such aspects also reduce human intervention and risk of error. End-to-end management Once transformed, the CIO can oversee the entire IT infrastructure on-site or off-site through a single pane of glass. This empowers the CIO for performance management and measurement of SLAs of third-party service providers as enterprise IT processes evolve towards becoming system integrators. Intelligence An important use of these technologies is the programmability that goes hand-in-hand with implementation. SDN and NFV bring programmability to the application layer where the application can define dynamic provision and orchestration of the network in response to its requirements. A factor that service providers are unable to achieve at this stage given the lack of visibility in the applications’ requirements. Alignment With the capability to meter consumption and charge back to the business, enterprise IT will have another tool to enable its transition into an internal service provider. It also makes for easier capacity planning. www.frost.com SDN and NFV Enhancement The transformed data center promises to offer greater business agility and lower IT response times, self-service capability to customers; and greater resource utilization and performance Lower costs Implementation of these technologies are purported to reduce equipment costs. Well-defined SDN and NFV strategies are expected to lower capital expense by running networks off virtualized commodity servers and reducing the dependence on proprietary hardware. Furthermore, by shifting to a utilitybased model, enterprises can further decrease bandwidth costs. Initial estimates put the cost savings at around 40% to 60% in bandwidth costs by moving from a monthly commitment to a payas-you-go model for bandwidth.1 Furthermore, SDN is widely considered as an enabler of Infrastructure as a Service (IaaS). The convergence of SDN and cloud computing is expected to present more options for optimized and cost-effective service models. More importantly, SDN is a software-based component which can be leveraged through cloud data centers further lowering the cost of networking. Service providers will be able to offer SDN provisioning, management, optimization, and support through the cloud resulting in extremely low-cost network and cloud models. Software Defined and Virtual Networks Future Roadmap Research by Frost & Sullivan on leading global service providers in 20132 has revealed that network function virtualization is expected to start with policy servers and switches/routers, with load balancing and firewalls to be virtualized at a later stage. Figure 4: Preference for Virtualizing Network Elements Policy servers Switches / routers Application servers Full nodes (IMS,EPC) Load balancing OSS Customer management BSS Firewalls Likely More likely Most likely Source: Frost & Sullivan 1 Cost savings compare the cost of subscribing to 100Mb of bandwidth on a 12-month contract to costs for the organization’s actual usage on a utility-based pricing model. This assumes that the long-term contract pricing reduces to meet average daily requirements and the utility model supports additional bandwidth requirements when needed. Frost & Sullivan interviews with 10 global service providers that have, or are in the process of, SDN and NFV implementation. 2 7 SDN and NFV www.frost.com However, as is often the case, the reality lies somewhere in the middle. We are already witnessing the early suppositions challenged with initial use cases involving access networks and data centers. These are being realized with the convergence of IT and IP. Bandwidth on Demand or BoD – By implementing SDN in their core network, service providers can offer a utility-like model for the network enabling them to offer all three resources – compute, storage, and connectivity – as a service. BoD allows enterprise customers to tap into an agile and flexible service provider network as it allows users to self-provision bandwidth, manage, and monitor network usage and account information in real-time. Furthermore, the in-depth capabilities of management and visibility achieved through SDN allow service providers to charge customers for the amount, quality, and duration of network usage. Load balancing, flexibility, and security – Load balancing and flexibility capabilities are considered key benefits of SDN and NFV. Programmable and active networking capabilities to facilitate the flexibility of the network are expected to develop, addressing the vulnerabilities arising from software usage in networking, implemented through SDN’s software-defined edge, and OpenFlow. In the short-term, high-level security protocols will be integrated into the solutions. The advent of virtual networks, such as those offered by Brocade, Fortinet, and Juniper, will also see rapid progress in this domain. Cloud bursting – With a fully-integrated network across hybrid environments, true cloud bursting or a hybrid cloud is expected to become a reality with enterprises having the ability to burst workloads into public clouds at will. With programmability extended to the application layer, applications will be empowered to burst onto a public cloud environment based on certain pre-defined triggers. This also enhances the ability to tap into scalable bandwidth or BoD to expedite migration of workloads between IT environments and/or locations. SDN for complex cloud orchestrations and complex business applications – Developments in SDN for complex data orchestrations are expected to take center-stage in the long-term, but key technology developments such as languages specific to SDN components and software-defined network monitoring are likely to impact these fields in two to four years and improve the scalability of data centers. Complex business applications will be developed with the evolution of business specific networking solutions. End-to-end virtualized enterprise networks – Enterprise networks built on SDN platforms are expected to reach maturity within the next five years. SDN solutions are currently being implemented as modules across most enterprises. Complete end-to–end SDN solutions are being explored by MNCs such as Facebook and Amazon. These solutions are expected to have full-fledged adoption in the long-term through key developments in SDN-based network optimization tools and agnostic plane consoles. SDN and NFV based business applications with advanced security features are expected to form the core of such enterprise networks. Virtual points of presence – Service providers will have the flexibility to test new markets by implementing virtual points of presence (PoP) instead of having to physically set up a local PoP. In such scenarios, they can ramp up capacity by taking bandwidth on demand from service providers such as Pacnet that offers Network as a Service, as opposed to the traditional method of renting cable systems. This creates new business models for wholesale bandwidth sales by introducing utility-based pricing models. 8 SDN and NFV www.frost.com Implementation: Centralized or Distributed? Another important aspect is whether NFV should be implemented in a centralized or distributed architecture. The current architecture allows network functions to be virtualized anywhere in the network, including at the customer’s premises or the network edge. These functions include firewalls, diagnostic tools, IP-PBXs, traffic accelerators, network address translation (NAT), and rate-limiters. However, according to popular opinion most virtual network functions will be centralized. Frost & Sullivan believes there is a real need for distributed network function virtualization and factors mandating the distribution of some functions closer to the customer. The challenge is, however, to centrally manage both distributed and centrally-located virtual networks, as well as virtual machines and traditional servers. 9 SDN and NFV www.frost.com The Last Word Current macroeconomic, social, and technological trends are creating new challenges on service provider solutions and enterprise IT. However, they also offer opportunities to advance the Software-Defined Everything approach to the third pillar: the network. The twin technologies of SDN and NFV extend the cost and productivity efficiencies of virtualization and programmability to the network; and enable the evolution of IT from an enabler to an innovator. Furthermore, they eliminate the silos in IT departments across compute, storage, and network teams, and encourage collaboration and better allocation of resources. Most compelling in the SDN and NFV value propositions are their orchestration, automation, and programming capabilities. In an SDN, the orchestration platform synchronizes all the components according to pre-set policies and best practice configurations. This allows the enterprise to easily add or grow applications or services. The best practice policies enable quick deployment, minimal mistakes, and high security, as well as compliance and resource optimization. The key benefits of a robust NFV deployment include agility, end-to-end management, intelligence, business alignment, lower costs, with enhanced utilization and performance. This allows enterprises to further their ITaaS vision by: • • Easing the management of multiple clouds: private or hybrid, regardless of provider. Optimizing application delivery. Frost & Sullivan anticipates the continued evolution of these use cases and the establishment of new ones as the SDN and NFV technologies mature and carve out their niche. Several providers have adopted this application-centric focus, which Frost & Sullivan believes will drive the next generation of IT in the enterprise. The SDx approach offers enterprise IT a cost-effective way to optimize application provisioning and delivery, while enabling it to meet business goals. 10 About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants. For more than 50 years, we have been developing growth strategies for the Global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies? Contact us: Start the discussion About Pacnet Pacnet is a leading provider of integrated network services and data center platforms for enterprise and carrier customers in Asia Pacific, delivering high-performance technology solutions over the region’s most extensive high-capacity submarine cable systems. Our ownership of over 46,000 km of fiber connected to our regional data centers gives Pacnet unparalleled connectivity to major business centers throughout the Asia Pacific region. Our complete set of solutions for managed data, private line, data center services, and content delivery, combined with our expertise in serving Asia Pacific, have made us a trusted services provider for large businesses worldwide, including many of the Fortune 1000. Headquartered in the heart of Asia in both Hong Kong and Singapore, we operate across 24 offices located in 13 countries, including Australia, China, India, Indonesia, Japan, Korea, Malaysia, the Netherlands, the Philippines, Taiwan, Thailand, and the United States. For more information, please see http://www.pacnet.com. Disclaimer These pages contain general information only and do not address any particular circumstances or requirements. Frost & Sullivan does not give any warranties, representations or undertakings (expressed or implied) about the content of this document; including, without limitation any as to quality or fitness for a particular purpose or any that the information provided is accurate, complete or correct. In these respects, you must not place any reliance on any information provided by this document for research, analysis, marketing or any other purposes. 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