Presented by:

NFV and SDN:

The Next Step in the
Evolution of the
Networks
The move to software virtualization is set
to fundamentally change how operators
deploy and manage their networks.

Introduction
The ongoing move to software-defined networks (SDN) and network function virtualization (NFV) marks
a monumental shift in how cable operators manage their networks and deploy services over them. With
these initiatives comes the virtualization of network functions, faster development and deployment of
new service offerings and ultimately a big reduction in the costs associated with those processes.
AT&T has set into place a program to virtualize and control more than 75% of its network by 2020 using
cloud infrastructure and SDN. CenturyLink intends to virtualize 40% of its global IP core network loca-
tions by end of 2015 and have full global virtualization coverage in its IP core network and data centers
by 2018. Research firm IHS expects the global network functions virtualization (NFV) hardware, software
and services market to reach $11.6 billion in 2019, with NFV software comprising more than 80% of that
total revenue.
To put it plain, the opportunity for both vendors of NFV solutions and their customers is tremendous
and its a sure bet that no one wants to be left out. For this white paper, CED Magazine surveyed 165 top
executives and decision-makers from across the industry to find out how theyre thinking about NFV
and SDN. The results suggest a trend that will fundamentally change the way operators deliver services
and ultimately how they run their businesses.
Everybodys Doing It, and Theyre Doing It Now
While virtualization may have a futuristic ring
How important is virtualization to the future of
to it, the reality is that its happening now.
your network?
Of the 165 industry professionals surveyed,
22% said that they are already implement-
Very Important
ing virtualization in their networks, with just
under 14% noting that theyll be doing so in Important
the next year. Over 8% said they would be
implementing virtualization in their network Moderately Important

over the next two years, and just under 2%

Not very Important
said they would be doing so in five years,
while 50% said they didnt know. Not at all Important

Regardless of whether our respondents

have a timetable laid out for implementing 0 20 40 60 80

virtualization in their networks, the majority

have realized the importance of doing so. Fully 28% of those surveyed said virtualization is very import-
ant, while 30% said it was important. Fully 26% said virtualization was moderately important, while just
under 15% said it was not very important (10%), or not important (4%).
Its not a question of if people are going to use SDN and NFV, its a matter of how and when, said Jim
Kleinsmith, director of MSO Business Development at Ciena.CAPEX savings
Blue Planet, a Division of Ciena, delivers
multiple solutions for the SDN and NFV marketplace including Multi-Domain
Flexibility Services Orchestration, SDN
Management, Control and Planning for Legacy Networks, NFV Orchestration and OSS/BSS Integration.
New services

Cienas Blue Planet SDN/NFV software automates service delivery across

OPEX savings
multi-vendor physical and virtual network domains
Speed

Other

0 20 40 60 80

Ecosystem

Orchestration

Services
Kleinsmith said that operators are looking for open, unified and agile solutions that will work with any
hardware on the market. As networks move to a more software Standards
and software-centric architecture, opera-
tors see a future where the combination SDN and NFV can actually transform their business models.
Other
MSOs can increase revenue quickly by developing and deploying new services faster, Kleinsmith said,
while they increase margin by becoming more operationally and capital
0 efficient
20 with these
40 services.
60 80
Whether or not MSOs are fully prepared to support the case for virtualization is another story. While 46%
of survey respondents said they were somewhat sure they had the data needed to support the business
case for virtualization, only 34% fully confirmed that they had what they needed, 18% said they did not,
which could mean theres still some education that needs to happen before vendors can be assured
their customers are prepared to move forward.
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 Very Important

Important

Moderately Important

Benefits and Obstacles Not very Important

As the MSOs plot their individual roadmaps for virtualization across their networks, the topography be-
comes more and more littered with potentialNot at all Important
prizes and pitfalls that could result from the shift. The CED
readers we polled picked out some key benefits, obstacles, drivers and pain points that will inevitably
0 20 40 60 80 100
affect the decision making process moving forward.
When asked about the most important benefits arising from virtualization, 35% of respondents indicat-
ed that the primary impetus is around improving the ability to deliver new services. After that, 26% of
respondents said the ability to scale is most important, while 19% said OPEX/CAPEX savings are most
important, and 17% valued the automation of processes as most important. Other respondents indicat-
ed that availability, the ability to offer services internationally and privacy were also important benefits
CAPEX savings
of virtualization.
Flexibility
The data reflects comments from MSOs that have already detailed their virtualization plans. For exam-
ple, CenturyLink is putting customer needs first as New
it pushes
servicesfor full virtualization by 2018.
Integrating virtualized services into our network OPEX
and developing
savings an interactive marketplace and portal
for our customers allows us to be more responsive to market opportunities and meet changing custom-
Speed
er demands, CenturyLink CTO Aamir Hussain said in a statement.
Other
Though the benefits of virtualization are clear, there still remain a number of obstacles that have to be
overcome before wider adoption of NFV and SDN can take hold across the industry. The readers we
0 20 40 60 80 100
polled provided a wide range of obstacles that could potentially be holding up virtualization, though a
significant% of respondents pointed toward one issue in particular.
Nearly 35% of respondents said integration
into current operations is the main obstacle What is driving the demand for virtualization?
surrounding the push toward virtualization.
After that, 19% of respondents said finding Very Important
Ecosystem
proven solutions was the main obstacle,
Important
16.5% cited standards, another 16.5% point- Orchestration
ed to training of support staff as the prima-Moderately Important
Services
ry obstacle, and nearly 12% said identifying
the business case was the main obstacle. Not very Important
Standards
The CED readers we surveyed broke down Not at all Important
Other
the obstacles even further into a set of pain
points of implementing virtualization. Of 0 20 40 60 80 10
0 20 40 60 80 100
the 135 respondents, more than 49% said
services are a significant pain point for MSOs
looking to virtualize and nearly 49% called What are the pain points with implementing
standards a pain point. Not far behind that, virtualization?
nearly 43% said orchestration is a key pain
point and nearly 27% said the ecosystem is CAPEX savings
a pain point. Other respondents mentioned
funds, security, performance and remote Flexibility

management as possible pain points. New services

MSOs will have to balance their individual OPEX savings
approaches to virtualization to account for
Speed
both benefits and obstacles. The results of
our poll show a number of different goals Other
MSOs hope to achieve through virtualization.
When asked about what is driving the 0 20 40 60 80 100

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demand for virtualization, 53% said new services, 44.5% said flexibility, nearly 33% said speed, nearly
33% said OPEX savings, and more than 26% said CAPEX savings. Other respondents pointed toward
growth and ease of software updates as drivers of virtualization.
With the benefits and obstacles laid bare so MSOs can better create a virtualization agenda that meets
theirs and their customers specific needs, it becomes necessary to prioritize the various network func-
tions which will be first to be virtualized.

Priorities
The landscape for MSOs is shifting as new forms of competition and new challenges to time-tested busi-
ness models arise. At the same time, its imperative for MSOs to continue expanding on and innovating
core services.
The CED readers we surveyed place some next-generation technologies and services ahead of virtual-
ization on the list of top priorities for the cable industry. About 39% of respondents said gigabit service
should be the top priority for cable. With Comcast already launching multi-gigabit residential service and
promising widespread deployment of DOCSIS 3.1 across its footprint within the next few years, its clear
that gigabit service will be a key focus for the cable industry for the foreseeable future.
Another nearly 24% of survey respondents called cloud DVR the top priority for the cable industry and
operators along with vendors have indeed put a lot of stock in the idea of moving DVR functions to the
cloud to free up more functionality within the CPE.
Fully 14% of survey respondents said that Over-the-Top (OTT) video services should be top of mind for
the cable industry, which is currently locked in battle with popular SVOD players like Netflix and Hulu.
Not far behind those technologies and services on the list of cable industry priorities, according to our
survey results, is virtualization. And the way our respondents tell it theres a clear division about which
NFV services should be first and second to go into effect.
About 28.5% of respondents said load balancing would be the first NFV service they would deploy. After
that, 21% said encryption, more than 19% said automated data center connect, nearly 15% said virtual
firewall, almost 9% said L2/L3VPN, and more than 7% said WAN acceleration.
The NFV technology deployment hierarchy took a similar shape when we asked about the second ser-
vices to be deployed.
More than 22% said load balancing would be the second NFV service they would deploy. After that, more
than 18% said automated data center connect, 17% said virtual firewall, more than 15% said encryption,
about 14.5% said L2/L3VPN, and nearly 13% said WAN acceleration.

Conclusion
Its clear that we are on the verge of the next big shift in the way networks are deployed and managed.
The move to a software defined, all-IP infrastructure has made virtualization of the network a no brainer.
With some implementations already in the works, the industry has clearly hit the phase of ironing out
the bugs and learning by example. Perhaps the most notable finding from this survey is that over half of
respondents acknowledged that virtualization is important, with a quarter recognizing it as extremely
important.
Creating more agile networks not only results in cost savings but increased revenue and profits. Being
able to bring customers a menu of advanced services to meet a variety of needs in a timely manner is
key to creating stickiness and reducing churn. Operators realize that without customers riding on them,
these expensive networks that cost billions to build truly are reduced to dumb pipes. The move to soft-
ware and virtualization is not the end of innovation but the start of a new, vital stage in the evolution of
our connected society.

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About CED
CED provides engineers and engineering managers in the MVPD segment with news and analyses
of technologies, business trends, and how the two intersect, through a multimedia variety of prod-
ucts that include daily newsletters, web-based news, webcasts, white papers, video news, and social
media.

About Ciena
At Ciena, we understand that if you can tap into your networks full potential, it
can play a pivotal and proactive role in advancing your strategic initiatives to drive
game-changing business outcomes. With our deep expertise in optical, Ethernet,
and network automation, we specialize in unlocking that potential.
Cienas Blue Planet division was created to ignite a network transformation by en-
abling true end-to-end service orchestration. With disruptive software, Blue Planet
is focused on helping network operators automate services from creation to
orchestration to delivery across both physical and virtual domains. By abstracting
network complexity, Blue Planet creates space for innovation and differentiation
through a level of service programmability that was previously unachievable.

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