NFV Economics and Business Case Discussion at Software Telco Congress 2014
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Transcript of NFV Economics and Business Case Discussion at Software Telco Congress 2014
THE IMPACT OF NFV ON SERVICE PROVIDER ECONOMICS
Jose de Francisco
IT EXPO / SOFTWARE TELCO CONGRESS - LAS VEGAS, AUGUST 12 2014
CICCLOUDBAND® INNOVATION CENTER
Director, Cloud Solutions Marketing, IP Platforms DivisionMember of the Technology Leadership Council
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
CICALU COMMUNITY
CLOUD CLOUDBAND® INNOVATION CENTER NFV HUB
2 AUGUST 2014
leverage our company’s own cloud infrastructure and fly your own jets
let’s work together and move your apps and systems to innovate with a new breed of carrier cloud solutions
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
3 AUGUST 2014
industry events
NFV town hall meeting
CLOUDBAND® showcase
training
online community& collaboration tools
ecosystemconventions
customer workshops
know-how transfer
communityknowledge & exchange
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
3 AUGUST 2014 COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
“all things are numbers”Pythagoras
“there is no unique picture of reality” Stephen Hawking
2018 2020
$1B
$2B
$3B
$4B
$5B
1.3 NFVMind Commerce
$6B 5-6 Virtualized Telecom MarketABI Research
5 NFV & SDN for RANSNS Research
2.4 NFVAnalysis Mason
service provider investment “$B”sources: wp.me/p2EKuv-dK
4 AUGUST 2014
maturity levels the journey
valuation considerations business case sample
agenda
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NFV HUB
5 AUGUST 2014
knowledge transfer
early cloud technology adoption
pilot application prototypes
virtualizationmanually deployed
early automationdeploy, monitor, API
life cycle mgmtscaling, self-healingupgrades, patches
multi-tenancysoftware defined
environments
“plot your journey”
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
6 AUGUST 2014
virtualizationmanually deployed
early automationdeploy, monitor, API
life cycle mgmtscaling, self-healingupgrades, patches
multi-tenancysoftware defined
environments
accelerated Lead timeS
Unprecedented Capex reduction
COTS -Commercial off the shelf (hardware)
Flexible planning & ease of pivoting
FOSS -Free open source software
Distributed systems(Cloud x network loads x sla)
Lean operations
Agile project managementIterative development
Devops –development & operations
Economies of scale
Economies of scope
Network effects
“value whiteboarding”
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
7 AUGUST 2014
Hardware
End to End
ManagementAutomation
Applications
Dedicated
COTS
Multitenant
Environment
Networked
Clouds
EMS
EMF
Orchestration
Service
Chaining
OSS/BSS
For Cloud
Manual &
Application
Network
Measurements
& QoS
End to End
Analytics
Predictive
Analytics
Early
Virtualization
Native
Virtual Network
Functions
Lifecycle
Automation
vNF Mashup
Networking
“manage dependenciesand externalities”
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
“Toto, I have the feeling we’re not in Kansas anymore”
Dorothy - Wizard of Ozpicture source: wp.me/p2EKuv-dK
8 AUGUST 2014
behavioral economics
green field lite deployment lifecycle replacement regulatory considerations lean operations agile development cap and expand network as a service enterprise market enterprise verticals
legacy’s last power gasp culture and org shift conventional engineering budget and accountability workstyle (lean, agile, devops)
marketing myopia disruption unmet demand disintermediation value migration equity erosion
opportunity cost
strategy
technology maturity
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
9 AUGUST 2014
behavioral economics
green field lite deployment lifecycle replacement regulatory considerations lean operations agile development cap and expand network as a service enterprise market enterprise verticals
ecosystem dependencies open source community vertical vs. horizontal architecture control and data planes optimization reliability, availability, serviceability performance security
legacy’s last power gasp culture and org shift conventional engineering budget and accountability workstyle (lean, agile, devops)
feature parity modular configuration standardization, plug & play programmable dynamic and elastic behavior open, extensible automated, zero touch manual override multi-vendor, commodity transparent full visibility, analytics, one glass coexist with legacy and conventional future proof
marketing myopia disruption unmet demand disintermediation value migration equity erosion
opportunity cost
strategy
technology maturity
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
OPTION A (PMO): New COTS X.86 servers
OPTION B (FMO): 11 CloudBand Nodes3 and CBMS
(orchestration) licenses
Alternatives
analyzed
SCOPETCO analysis of replacing current DNS servers with new infrastructure for a Service Provider
OUTPUTS
OPEX
Capacity Growth Process
Software Upgrading Process
Healing Process
DC: Floor Space, Power & Cooling
SW Licenses & Maintenance
Service Provider DNS operations
Servers type A1
44 old COTS servers
(Cache Resolvers)
Servers type B2
60 old COTS servers
(ANS & Cache Resolver)
DNS Operations Overview
CAPEX
HW Infrastructure
(1) Servers type A are all the same(2) Servers type B are all different, some are old legacy infrastructure coming from company
acquisitions(3) 11 CB nodes is the minimum CB node infrastructure due to requirement of presence in 11 sites
10 AUGUST 2014 COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
- 86%
PMO
1.79 $M
FMO
0.25 $M
- 58%
PMO
1.50 $M
FMO
0.63 $M
NO MULTI TENANCY. TOTAL 5-YEAR COSTS: 14.03 $M 7.19 $M [-49%]
FLOOR SPACE,
POWER & COOLING
HEALING
PROCESS
SOFTWARE UPGRADING
PROCESS
CAPACITY GROWTH
PROCESS
- 83%
PMO
0.69 $M
FMO
0.12 $M
- 48 %
PMO
0.66 $M
FMO
0.34 $M
HARDWARE
INFRASTRUCTURE
- 56%
PMO
4.12 $M
FMO
1.81 $M
SOFTWARE LICENSES &
MAINTENANCE (HW & SW)
- 23%
PMO
5.27 $M
FMO
4.04 $M
11 27 JULY 2014
(1) Only includes operational costs attached to the process of replacing and growing new capacity. Hardware, licenses & maintenance costs are accounted for separately
OPEX CAPEX
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
- 86%
PMO
1.79 $M
FMO
0.25 $M
- 58%
PMO
1.50 $M
FMO
0.63 $M
NO MULTI TENANCY. TOTAL 5-YEAR COSTS: 14.03 $M 7.19 $M [-49%]
FLOOR SPACE,
POWER & COOLING
HEALING
PROCESS
SOFTWARE UPGRADING
PROCESS
CAPACITY GROWTH
PROCESS1
MULTI TENANCY. DNS CONSUMPTION: 4.17 $M [-70%]
FLOOR SPACE,
POWER & COOLING
- 83%
PMO
0.69 $M
FMO
0.12 $M
- 48 %
PMO
0.66 $M
FMO
0.34 $M - 89%
FMO
0.17 $M
HARDWARE
INFRASTRUCTURE
- 56%
PMO
4.12 $M
FMO
1.81 $M
HARDWARE
INFRASTRUCTURE
- 88%
FMO
0.49 $M
SOFTWARE LICENSES &
MAINTENANCE (HW & SW)
- 47%
FMO
2.80 $M
SOFTWARE LICENSES &
MAINTENANCE (HW & SW)
- 23%
PMO
5.27 $M
FMO
4.04 $M
12 AUGUST 2014 COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
Value created by CloudBand to a Service Provider DNS operations
CLOUDBAND
0 $M
6.8 $M
9.8 $M
Service Provider
Additional value captured
through Multi tenancy
MULTI TENANCY
Initial value captured by
Cloud-based DNS
CLOUD DNS
13 AUGUST 2014 COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
14 AUGUST 2014
maturity levels the journey
valuation considerations business case sample
recap
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED
innovarista.org
alcatel-lucent.com/cloud
@innovarista
@ALU_Cloud
more information:
follow up discussion:
wp.me/p2EKuv-ee
wp.me/p2EKuv-dK
flic.kr/s/aHsk26xXom
softwaretelco.com
Jose de Francisco Director, Cloud Solutions Marketing, IP Platforms DivisionMember of the Technology Leadership Council
thanks!
COPYRIGHT © 2014 ALCATEL-LUCENTALL RIGHTS RESERVED