Contributed article by Mitch Auster, senior director of product marketing at Ciena

2014 – The year the 'Telco Cloud' starts to take shape

Over the past several years, "The Cloud" has become so mainstream that even my parents have heard the term and can appreciate the essence of its value. To date, the predominant cloud services have been SaaS, PaaS and IaaS - Software-, Platform- and Infrastructure-as-a-Service - that enable enterprise IT and consumer applications and content to be virtualized and delivered from cloud provider data centers. In 2014, we predict that the Telco Cloud will emerge. This will enable the telecom services delivery and processing functions of network service providers to be virtualized and delivered from cloud data centers, alongside existing XaaS.

This will be a natural evolution driven by the Network Functions Virtualization (NFV) movement being catalyzed by the ETSI NFV Industry Specifications Group¹. Currently, network operators deploy many different purpose-built appliances such as load balancers, deep packet inspection devices, broadband access gateways and the like, many throughout the metro network, to instantiate and manage the delivery of wireless, broadband Internet, enterprise VPN and other network services.

Some of these appliances are business-oriented while others are consumer-oriented. As a result, some are heavily utilized during the day and lightly utilized at night, while others have the opposite activity cycle. Regardless of the situation, network service providers must deploy sufficient capacity for each appliance type, for each service silo and in each metro area to handle the local peak demand. Let's not forget that truck rolls are also required throughout the device's lifecycle to provide the necessary installation, maintenance and upgrades. The net-net is inflexibility, high operational expense and extremely inefficient use of capital assets.

NFV allows the service control logic and data plane processing functions to be virtualized and performed on common off-the-shelf (COTS) hardware servers, with each function elastically grown and shrunk as necessary. Sound familiar? Network operators expect the same agility, efficiency, and operational gains that cloud computing brought to enterprise IT to be realized when delivering telecom services - in fact, early CIMI Corp. survey results show that buyers expect SDN and NFV both will likely generate a 20 percent reduction in capital costs. There is no reason that a network service provider offering cloud services couldn't leverage a common cloud data center to support a whole range of virtualized workloads. Since they all require physical compute, network and/or storage resources, delivering them all from a shared pool can provide additional economies of scale.

That will lead, perhaps toward the end of the year, to the advent of NFV-Infrastructure-as-a-Service (NFVIaaS) whereby those resources are not only used to deliver their own services, but offered to third-party network service providers as well to create a new cloud revenue stream. Why? Most service providers have enterprise customers with some locations outside of their footprint. Purchasing NFVIaaS from the local carrier cloud provider will allow them to address those locations without having to maintain physical infrastructure around the globe.

The cloud has allowed enterprises to meet ever-increasing and continually evolving application demands without purpose-built, dedicated IT hardware. Now, the cloud, leveraging the concepts of NFV, is poised to bring similar flexibility and expense containment benefits, as well as new revenue opportunities, to telecom service delivery.   

¹ Network Functions Virtualisation (NFV); Use Cases - ETSI GS NFV 001 V1.1.1 (2013-10)

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