By Prabhu Ramachandran, Director of WebNMS
The cable market now looks to be a hot spot for M&A. Acquisition activity includes European provider Altice buying Cablevision, Charter Communications gobbling up Time Warner Cable. These and further consolidations should not come as a major surprise. As any market reaches maturity, supplier consolidation drives scale and profitability. The trickle-down effect on network operations will help drive network unification investment and the eventual adoption of Lifecycle Service Orchestration (LSO) solutions to leverage these economies of scale.
Reports from Bloomberg indicate that the latest wave of acquisitions is shifting into an absorption phase, partly driven by high valuations and financial uncertainty. For example, a recent article stated: “Altice NV Chief Executive Officer Dexter Goei says the European company, which last week agreed to buy Cablevision Systems Corp. for $17.7 billion, will take a break from its buying binge to focus on trimming costs and integrating cable systems.”
The system integration aspects -- driven by the desire to leverage the economic efficiencies presented by the merging of their subscriber bases -- will likely initially focus on unifying system operations. The operational costs of running multiple million-plus subscriber networks will limit forward profitability, incentivizing the consolidation of separate silos to reduce cost. Initially, multiple systems may be run in parallel to provide service continuity, but eventually the number of systems must be reduced if any scale efficiencies are to be gained. Unifying multiple networks is a very complex undertaking. Service providers tend to have huge subscriber bases, unique architectures, and multi-vendor networks -- not to mention very specific methodologies within operational models.
The systems that survive the culling will be those that operate most efficiently at the increased scale of the network operations, smoothly integrate the variety of combined multi-vendor equipment, and promise the simplest integration of new profit-enhancing technologies, such as NFV and big data analytics. Forward-thinking cable IT groups that have architected world-class platforms for common functions, such as service provisioning and service assurance, will lead the charge in integrating these systems.
Faced with disruptive competition, such as the “cord cutting” media consumer trend, even scaled cable operators will face major challenges. Increased operational efficiencies, especially through automation, will be required to overcome these competitive threats. Operators with unified operations will be best positioned to adopt automation within their network operations. In this follow-on phase to unification, the MEF’s Lifecycle Service Orchestration vision provides high-value reference architectures, specifications, and best practices as guidelines for cable service automation. As an MEF-led initiative, LSO directly addresses the Carrier Ethernet business services marketed by cable operators. With the expanded footprints from M&A, the value of their business services will increase, and LSO automation will deliver the agility demanded by enterprises in a cloud-based world as well as enable vastly simplified interconnect with like-minded partner networks for the delivery of global scale network services. However, cable operators should also explore applying the principles of LSO to their consumer businesses. As streaming services proliferate, mass market platforms to deliver high-quality, assured content to millions of attached residences should create immense value. Therefore, for both their enterprise and residential businesses, LSO will help cable operators exploit the economies of scale created by industry consolidation.
A Hackathon – like the debut LSO Hackathon held in November 2015 at the MEF’s GEN15 conference – is where magic happens, where theory turns into practice, and the state of the art advances. Dozens of techies sitting in a room, hunched over laptops, scribbling on whiteboards, drinking excessive quantities of coffee and Diet Coke. A hubbub of conversation. Focus. Laughter. A sense of challenge.
GEN15 LSO Hackathon Focus & Participants
More than 50 network and/or software experts joined the first-ever LSO Hackathon, representing a very diverse group of 20 companies. They were asked to focus on two Reference Points of the MEF's Lifecycle Service Orchestration (LSO) Reference Architecture. As explained by Daniel Bar-Lev, Director of Certification and Strategic Programs at the MEF and one of the architects of the LSO Hackathon series, these included:
- LSO Adagio, which defines the element management reference point needed to manage network resources, including element view management functions
- LSO Presto, which defines the network management reference point needed to manage the network infrastructure, including network view management functions
Hackathon participants and their companies were gathered at GEN15, the second annual global networking conference hosted by the MEF. Held during 16-19 November in Dallas, GEN15 drew close to 1,000 professionals from 255 organizations and 34 countries. While the GEN15 LSO Hackathon was a small part of GEN15, it was an important one due to the technical work accomplished and the networking interaction among participants.
The companies and organizations participating in the LSO Hackathon included AT&T, Amartus, CableLabs, CenturyLink, Ciena, Cisco, ECI, Ericsson, Iometrix, LB Networks, Level 3, MicroSemi, ngines, OpenDaylight, SingTel USA, Tech2000, Telecom Italia, TM Forum, Vencore Labs, and WebNMS.
Benefits & Success Of Inaugural LSO Hackathon
“One of the best things about the GEN15 LSO Hackathon was the way it brought people together from service providers, vendors, and others who are very active in the MEF and the Open Source community, such as from OpenDaylight,” said Charles Eckel, Open Source Developer Evangelist, Cisco DevNet, who helped plan and lead the Hackathon. “We put everyone into one room to have them work together closely and get to know each other on a personal level.”
Early projects demonstrate that LSO progress will be critical to enabling dynamic services over more automated, interconnected networks
The following feature is based on a recent roundtable discussion on the LSO topic at the MEF’s Annual Member Meeting in Vancouver. This article provides valuable insight on the views of several of the world's largest operators on the strategic importance of LSO. Participants included:
- Moderator, Michael Howard, Senior Research Director, Carrier Networks at IHS Infonetics Research
- Alessandro Talotta, Chairman and CEO, Telecom Italia Sparkle
- Axel Clauberg, VP, IP & Optical, Deutsche Telekom AG
- Jack Pugaczewski, Principal Architect, CenturyLink
- Nan Chen, Executive Vice Chairman, CENX & President, MEF
- Chris Purdy, CTO, CENX
- Christopher Cullan, Director of Product Marketing, Business Services Solutions, InfoVista
Third Network & LSO Background
Lifecycle Service Orchestration (LSO) is the key to provisioning and managing versatile networks that offer the rock-solid performance of Carrier Ethernet 2.0 and the everywhere-connectivity of the Internet. Embraced by leading service providers around the world, LSO is the central pillar of the MEF’s Third Network Vision for enabling agile, assured connectivity services that are orchestrated across more automated, interconnected networks.
The MEF is the driving force behind the $80+ billion global market for CE services and technologies and has emerged as the defining body for LSO standards that underpin emerging Third Network services with CE 2.0, SDN, and NFV. Since formally introducing the Third Network Vision in 2014, the MEF has been working at a break-neck pace to meet the industry demand.
Operators Embrace LSO Development For Cost Savings, Better Customer Experience & Revenue Opportunities
Nan Chen, President of the MEF, expressed delight at how warmly LSO has been received by major industry players who are eagerly following standards development, and he said that the MEF is on track to meet a major milestone this fall. “The first standards for the LSO reference architecture are coming out in the Atlanta MEF quarterly meeting in October 2015. With that reference architecture, we can build a lot of things on top of LSO. MEF is doing a really good job, given that we're only less than a year from the launch.”
By Prabhu Ramachandran, Director of WebNMS
To realize the Third Network, communication service providers (CSPs) need to increase their agility by adopting new business strategies, processes and technologies. Otherwise, they will continue to struggle against the rising tide of competition from cloud and OTT providers. During this process, they should take a few pages out of their competitors’ playbooks. Cloud providers often rely on one or more open platforms to build unique applications that their customers see as simple services. Imitating this success, CSPs would benefit from projecting network services as applications that offer a branded customer experience, but heavily leveraging open platforms in their infrastructure. Driven by the MEF, Lifecycle Service Orchestration (LSO) has emerged as a critical operational vision and should help define provider open platform strategies. Leaders will need to foster an open software ecosystem and help guide the formation of a new value chain while architecting their new applications to take advantage of key platforms.
Historically, service providers have relied heavily on formal standards to foster a robust ecosystem. Standards have worked relatively well for the hardware value chain, from semiconductors to mobile network architectures, and have enabled most providers to build multi-vendor networks. The drawbacks of standards are long lead times and a propensity to drive up costs by injecting requirements that deviate from generic products serving a broader market. At present, carriers are striving to improve the agility of their hardware with SDN and NFV — using software abstraction and virtualization to create more flexible and dynamic infrastructure.
Appropriately, both these new techniques shift complexity into the software domain. By its very nature, software evolves rapidly, rearranging internals to add new features on the fly. Good software engineering relies upon thoughtfully structured and layered architectures to handle complexity. Avoiding the lead time of standards – which would negate the agility advantages of software innovation – cloud operators have excelled at constructing innovative services, either by basing them on existing open software platforms or opening up their internal platforms.
A decade ago Nan Chen, MEF President, famously predicted that there would soon be one common business language right across the globe: “Not English. Not Mandarin. But Ethernet.” Who would have guessed how rapidly this prediction would come true?
Today, almost any message, download, or communication between sites will be dependent on Carrier Ethernet – and yet how many of us really understand the technology well enough to take advantage of everything it can offer?
This is the irony: Carrier Ethernet has become the common language for digital communications, but humanity also needs to understand this common language before the full potential of the Carrier Ethernet revolution can be realised. Meeting this need is the fundamental role of the accredited training providers (MEF-ATP) that work for the MEF-CECP (MEF Carrier Ethernet Certified Professional) program, to bridge the divide between humanity and technology. 85% of all MEF’s-CECPs have gone through a formal training with an MEF-ATP.
Derek Swanson, Network Architect at Frontier Communications, summed this up brilliantly: “Our goal in signing up for MEF-CECP training and certification was to bring representatives from several different departments together for one week to establish a common language that we could use to communicate about our Ethernet service offerings. At the beginning of the week each person had a different understanding for each of the concepts covered in the training. By the end of the week we were all communicating clearly and effectively about not only the course material but also our current and planned Ethernet service offerings.” Other MEF-CECPs also noted improved internal and external communications, with the ability to “…talk to other MEF-Certified customers in a more intelligent way."
The growth and acceptance of the MEF-CECP program certainly supports these sentiments. At the time of writing, the number of MEF-CECPs has increased 350% in the last 24 Months to more than 3,200 professionals employed by 357 organizations based in 72 countries. Level 3 Communications and Time Warner Cable lead the market with 338 and 319 MEF-CECPs, respectively. They are followed by Fujitsu Network Communications, Coriant, and TATA Communications, each of which have 120 or more MEF-CECPs in their organization.
The Rayno Report’s premium research division released Service Provider Lifecycle Service Orchestration (LSO) Overview and Market Forecast to quite a fanfare at Mobile World Congress, Barcelona. As well as a presentation by Chief Analyst Scott Raynovich himself, there was panel discussion of the findings that included senior MEF representatives from Deutsche Telekom, MEF, CENX, Telecom Italia, Spirent Communications, Wedge Networks, AT&T as well as contributions from the floor.
Nan Chen, Co–Founder and Executive Vice –Chairman, CENX and President of the MEF
Fabio Randone, Director of New Service Design in National Wholesale Services, Telecom Italia
Axel Clauberg, Vice President, IP & Optical, Deutsche Telekom
Margaret Choisi, Distinguished Network Architect at AT&T
Dr. Hongwen Zhang, CEO, Wedge Networks
James Armstrong, Executive Vice President & GM, Spirent Communications
Scott Raynovich began by setting the scene on the market status of LSO “There is strong demand from service providers to increase the agility and flexibility of dynamic enterprise data services. They see the deployment of next-generation LSO software, which handles integrates orchestration, fulfillment, control, performance, assurance, usage, analytics, security, and policy of enterprise networking services, as the way to do that”. The Rayno Report discovered that the market for LSO software could reach $2.75 billion by 2019. LSO is clearly more than just a buzzword, but also a real market prospect.
The impulse behind the survey was that the MEF wanted to find out more about the needs of its service provider me
mbership. More than 60 service providers have already polled in some detail, and the view so far is that their OSS (Operation Support Systems) are “out-dated” and needing to be updated or overhauled – with 60% saying they were unable to launch new services in a cost-effective and time-effective manner.
OSS have evolved piecemeal over the years to keep pace with increasing network complexity and new technologies, but that has not prepared them for the recent SDN/NFV transformation from a near rigid infrastructure into a dynamic, virtualised network where changes happen too fast for manual management. So OSS have not only inherited a hodgepodge of non-integrated systems, often based on proprietary software, they also provide very little automation or workflow integration.