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SP360: Service Provider

By Uwe Lambrette, Director, Cisco Internet Business Solutions Group

Amsterdam may be the one place on earth where it rains more than it does in London. So, it was no surprise that I encountered stormy weather on my flight to Broadband World Forum (BBWF) 2012. As things turned out, the conference theme and the weather were clearly aligned, since the BBWF is fiercely embracing evolution to cloud. Here are some core themes that emerged as I shared some of Cisco IBSG’s findings at the conference:

Cloud 2.0: Most service providers (SPs) have already launched an initial cloud offering and are now beginning to measure scaling and growth. The initial offering is often a stand-alone cloud solution, typically focused on infrastructure as a service (IaaS). Once their original implementation goes live, SPs often need to focus on the following improvements:

Cloud Service Brokers (CSBs): Service brokers were another core theme, as they are a critical control point for SPs. A CSB platform enables the SP to retain customer ownership even when individual offers come from various providers, whether hosted in the SP data center or elsewhere. (For our purposes, the CSBs being discussed are those bundling diverse offers for a single customer target segment. Other CSBs focus on bundling single offers for a diverse set of customers. Enomaly, with its IaaS offer, is an example.) All SPs have launched CSBs. But is the model sustainable? In the long run, newer technologies like HTML5 could enable customers to pick SaaS vendors easily and directly without paying an intermediary’s distribution margin. The CSB must truly add value; having probed one CSB, my sense is that sustainable value is not easily defined. Here are four observations on the potential success of CSBs:

Network and Cloud Integration: This is a key theme for SPs, and high hopes are placed on this vision: Higher agility, custom service offerings for enterprises, integrated SLAs, lower costs and lower complexity.

Deutsche Telekom, for example, will launch Terastream, where some of the higher layer network functionality such as CDN and IMS will be integrated in a cloud service center. It’s not a proper SDN yet, while trials to use it in the RAN context are about to begin. In IBSG (my team) we think any SDN agility benefits rely heavily on the business architecture, and how this is matched with OSS. OSS is the Achilles heel.

Nonetheless, SDN will find its application in focus areas such as machine-to machine (M2M). In a broader context, SDN complements virtual data centers and the integration of a complex set of resources in a virtual container as part of a multi-tenant cloud. In this case, the resources themselves are entirely virtual, and they are not shared among multiple users even though they execute on a multi-tenant cloud platform.

Cynics have told me “SDN is just a pressure tool to get better deals.” They believe that most suppliers—when presented with a ferocious threat to deploy SDN—will knock a few percentage points off their, say, maintenance contracts, rather than risk losing a franchise.

In summary, I think SDN will be very effective in well-defined segments of the market, but it will likely stay out of the wide area of “multi-tenant” service provider networks for the time being.

At the Broadband World Forum, cloud was front and center in nearly all discussions, and I believe this presages many further positive developments. It may have been dark and stormy in Amsterdam, but there was no shortage of flowers throughout the city. Similarly, a thousand flowers will blossom under cloud, and a world of many clouds will continue to evolve.

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For an even deeper dive into the topic, please read “Riding Cloud to Improve Economics” and “Unleashing IT – Enterprise Migration.”

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