Ensuring Future Relevance and Revenue Transforming to NFV, why is it taking so long?
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1 Ensuring Future Relevance and Revenue Transforming to NFV, why is it taking so long? Craig Farrell CTO Telecom IBM TM Forum 1
2 NFV - Why is it taking so long? NFV will save up to 50% of our operating expenses! NFV will allow us to provision new services in hours not weeks! NFV will allow us to scale capacity instantly, on demand! If the value proposition for NFV is compelling and trials have been going on for years many reported as highly successful Why the delay in transforming to production NFV services? What can we do about it? Putting what was a device, onto a VM on a generic server, is not going to achieve the goals above. You don t need a weatherman to know which way the wind blows TM Forum 2
3 Factors that are causing the delay The services to be transformed are profitable and reliable. The lack of a clear trigger. The migration strategy. The culture of network staff. The widespread use of the fast follower business strategy. The maturity of vendor solutions. Swallow your pride, you will not die, it s not poison TM Forum 3
4 The Services are Profitable and Reliable Would you transform a profitable legacy service such as POTS to VoIP? For existing services, need a very compelling business case to over come: 1. Low risk, stable service, profitable (declining), why invest to change this? 2. Other projects are a higher priority and a bigger percentage of the network spend. For new services the business case only had to overcome the risk of new, immature technologies and solutions. The business cases often did not include the TCO of managing the legacy service (swivel chair) with multiple overlapping systems etc. I could stay with you forever, and never realize the time TM Forum 4
5 The lack of a clear trigger He who is not busy being born is busy dying. For IT, compute and storage was a large percentage of the spend so moving to Vmware/KVM had a financial trigger. For NOCs the spend is focused on optical and RAN build out meaning that NFV has much less of a financial trigger (Hardware a small percentage). No clear immediate business case for why NFV transformation had to be done right now? Failure to spot opportunities to transform. Consider EPC s 5 years ago 2017 TM Forum 5
6 The Migration Strategy Take care of all your memories, for you cannot relive them. A transformation strategy that minimizes both cost and the risk of churn during the move. Cap and Grow Build the new service in advance Cut over to new service Strategic redirection Move subscribers over as the ability to fulfill the incoming orders is built TM Forum 6
7 The culture of the NOC staff NOC Staff have less experience with virtualized environments When to use a public, private or hybrid cloud environments? Who buys and manages the hardware and software? Who does capacity planning? Does the NOC team have to give up control to another operations team? Who is liable if a service level agreement is violated? IT Data Center Staff are familiar since Vmware, but not Network guys. Putting IT Data Center Staff and Network staff in the same building under the same reporting structure does not solve this culture problem! Behind every beautiful thing, there s some kind of pain. EPCs for LTE networks, if we look at deployed LTE EPCs they look very similar to their predecessors. HSS and Packet Gateways all on their own machines being managed (capacity planning, upgrades, maintenance) same as before TM Forum 7
8 The fast follower business strategy We don t necessarily want to be the market leader but when a solution proves successful we want to be a fast follower We don t have a very good history of successfully innovating NEW solutions and ideas. We are far better at duplicating things that work in other places Waiting to use NFV for New Services that need to be able to rapidly provision bandwidth Telecom disruptor companies are very comfortable testing new ideas and moving them quickly into production. Different Culture! Everyone seems to be able to duplicate Zero rating. But remember duplicate app stores - even when ringtones were popular. How does it feel, To be on your own, No direction home, Like a complete unknown, Like a rolling stone? 2017 TM Forum 8
9 The maturity of vendor solutions I know you haven t made your mind up yet, but I would never do you wrong. Questions around manageability, scalability and reliability (fear of outages) Operators waiting for carrier grade solutions Operators waiting for 2 or 3 releases to allow for in the field bug fixing Incumbent vendors might not embrace the transition to NFV There was some initial thought that incumbent vendors would not fully embrace the transition to NFV because it would enable new competitors. EPCs for LTE networks, we demonstrated 5 years ago but operator fear around the maturity of vendor solutions raised questions such as manageability, scalability and reliability (particularly the fear of outages). Early miss-steps TM Forum 9
10 What can we do about it? What IS being done? Moving specific devices such as: Firewall, Routers, Software PBX, Network DVR. But this is business as usual because you would be refreshing this equipment anyway - We should all bet on the limit of this! The Profitability Add full TCO into the business case Do an analytics precursor project to provide actual ROI estimates Include complete legacy service TCO. The lack of a clear trigger Do an analytics precursor project to provide immediate ROI estimates based upon their own current orders orders. Future Triggers VoLTE, 5G An increase in legacy service outages, New Services Actually Appear (Video and content, IoT) How many times can a man turn his head, and pretend that he just doesn t see? 2017 TM Forum 10
11 What can we do about it? For the times they are a changin. The Migration Strategy Use Strategic Redirection The culture of the NOC staff Look for transformation opportunities The fast follower business strategy 1. Start with small projects such as move all load balancers, firewalls etc. 2. New projects service done as much as possible in on cloud NFV implementation 3. Start some Analytics projects to see if the business case of moving to NFV is viable. The maturity of vendor solutions Outcomes based and shared risk/reward business models 2017 TM Forum 11
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