SDN and NFV – The Twin Disruptive
Technologies Driving Innovation
in Data Center Networks
Market Insight by Frost & Sullivan in
collaboration with Pacnet
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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
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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.
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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.
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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.
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Data center consolidation and
cloud computing creating distance
between IT resources and users.
2
Network congestion owing to
“Chatty” protocols.
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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
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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:
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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.
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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
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SDN and NFV
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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.
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SDN and NFV
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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.
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SDN and NFV
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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.
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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.
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