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Adviance Consulting
Group | | |  | | | - Operational efficiency improves by a factor of 53%.
- Capital cost savings of 12%.
- Simplification of network build-out and provisioning.
- Produces 5-year cumulative OpEx and CapEx savings of 41% when converging residential, business, mobile, and wholesale services.
- Delivers greater power efficiency than other vendors by a factor of 169%.
- Improves CapEx and OpEx due to reduction in network elements needed to enable services.
- Accelerates the goal of network convergence while potentially increasing time to profitability.
| | | | | | | EXECUTIVE SUMMARY | As service providers migrate their networks from legacy circuit and packet networks to converged MPLS/IP networks to address the core, they not only are contemplating the benefits of a single operating system across their platforms, but are also closely scrutinizing what the technology will do for their businesses. Successful migration and optimization requires that service providers back their network transformations with solid business models that make planning easier, operations more intuitive, and implementation quicker. Business intelligence and flexible, scalable technology share an equal platform in the tactical decision-making process of network transformation and infrastructure improvements. CXOs now look for agile architectural solutions that not only quantify technology but also integrate into each aspect of their businesses. End-to-end business and application awareness, which is critical to the monetization of the network, now demands that service providers have networks with virtualized multiservice core functionality that separates the control and forwarding functions of the operating system, offers predictable, consistent performance and scalability for all sizes of platforms across product and business units, and supports the adoption of new business models.
ACG conducted a study to investigate the advantages of implementing core network virtualization solutions reported by Juniper Networks. The objectives of this study are 1) to analyze service providers’ economic benefits associated with utilizing virtualization in the core network and 2) to lay out those key components that service providers need to consider when adding virtualization technology in their networks. |  | | Figure 1. Network Virtualization Business Alignment | | | | VIRTUALIZING SERVICES IN THE CORE | | Background | Competition, traffic growth, high performance services and applications, cost pressures, and the demand for services and applications anytime, anywhere, and on any device are forcing service providers to consider alternative models for delivery of services. Driving their transformation from legacy circuit and packet networks to converged MPLS/IP networks are two key requirements: reduction to enablement time and reduction to time in revenue. Underpinning these requirements is the recognition that technology choices must, from a financial and business perspective, affect and support the goals of the entire organization. Executives now look for scalable solutions that not only handle their growing traffic requirements but also adapt to their changing service models. End-to-end business and application awareness, which are critical to the monetization of the network, require that service providers adopt new business models, such as cloud, and have networks with virtualized multiservice core functionality to support these models.
Service providers regard their networks as a strategic asset that drives revenue and increases profitability. With approximately 119 service providers CXOs surveyed citing customer value, service innovation, cost optimization, efficiency, and ROI as top priorities, improving agility and responsiveness, and streamlining business processes become crucial goals to successfully service end users and subscribed applications.
How do service providers extract maximum value from their network asset? With the proliferation of next-gen mobile devices, high-speed connectivity, and data-intensive Web 2.0 applications and with network traffic growing at a rate of 10–50 percent annually, service providers surveyed state that they recognize the distinct advantages of using a single network operating system and virtualization as their strategic value technology. They also agree that virtualization accelerates the goal of achieving the financial and differentiated benefits of a converged network. In spite of this recognition, service providers report having reservations about virtualization technology and the pressure and difficulty associated with converging network functions and collapsing layers on a single platform. Consequently, there remains reluctance to implement convergence because of the differences in requirements and operations among different business units.
The key to service providers successfully adopting a virtualized operational mode is scaling of multiservice networks. Why? Currently, service providers are trying to manage disparate networks, which can have variable growth rates, disparate partner relationships, as well as sustain dissimilar business models. Compounding the issue is that these various networks, many of which need upgrading, require maintenance schedules that are not necessarily synchronized, adding unpredictability and variability in planning, testing, and deployments, as older networks are supported separately for legacy applications. Virtualization delivers convergence and allows for the sharing of infrastructure by separating the forwarding, control, and services planes, which scale and evolve independently to support multiple services and new business models. Now, with the enabled technology components for a virtualized multiservice core, chassis, blades, power, interfaces, and links can be shared.
Virtualization enables for the following: | - Separation of the forwarding plane and control plane
- Physical separation versus logical separation
- Sharing of physical trunks with layer 2 logical separation
- Ability to operate and update different versions of software on each virtual router
- Independent management functions
|  | | Figure 2. 3D Scale | | | A virtualized core allows service providers to consolidate and customize their architecture. For example, service providers can consolidate servers. This means that many server applications can run on a single machine that originally required many physical computers to support the operating system and technical specification environments. Not only does virtualization optimize server utilization, it also allows for legacy software to maintain old OS configurations, while new applications are running with updated platforms and infrastructures. Each of the virtualized routers in a network can connect either to other partitions with the same shared pool or to other network elements that could be configured as a dedicated, intelligent edge. Even with the additional memory, CPUs and other hardware required to support virtualization uses less or the same power and occupies the same physical space, thus reducing utilities expenses and space costs and improving operational efficiency by a factor of 53 percent.
Each service can now operate in its own virtual network and the end result is a reduction in the total cost of operations, mitigation of risk, and streamlined asset utilization. Network virtualization not only adds scalability and flexibility but also simplifies a network by serving VoIP, IPTV, VPN, Internet, Wireless, Wireline, and Wholesale applications without the duplication and overlay inherent in today’s infrastructure.
A virtualized infrastructure in the core also provides the flexibility to converge other technologies such as 100 Gigabit Ethernet or 10 Gigabit Ethernet trunking with IP over DWDM and optical transport network interfaces, which improves operations, administration, maintenance, and total cost of ownership.
Risk mitigation and disaster recovery are other benefits of a virtualized core. Nextgeneration central office and go-to-market ideas such as cloud or XaaS demand more stringent security, reliability and performance requirements in the core. By decoupling the end user’s experience from the underlying computing environment, virtualization can help businesses reduce costs. This separation makes it easier for IT to identify, manage and troubleshoot issues and problems. In disaster recovery, virtualization technology enables a service provider to reimage irtual instances from one server to another.
What operation benefits do service providers realize with virtualization? With approximately $0.70 of every IT dollar being spent on operational costs, a core solution with secure router and server virtualization affects the bottom line by reducing the number of required resources such | | | | Demonstrated Value of Virtualization in the Core Network | | Operations Savings (53%) | Capital Savings (12%) | Business Model Benefits | | Lowers operation costs | Contributes to service consolidation and optimization | Improves network scalability | | Reduces provisioning and migration expenses | Decreases facilities costs | Supports key business benefits | | Lowers maintenance costs | Reduces network downtime | Produces fewer application failures | | Frees up data center space occupied by idle servers | Postpones server purchases from 12–18 months | Enables new business models | | | Table 1. Benefits of Core Network Virtualization | | |  | | Figure 3. Five-Year CapEx TCO Comparison (Converged versus PMO) | | | | For service providers that have Juniper’s products in their networks and utilize virtual chassis technology, OpEx and CapEx advantages include: | - Operational efficiency improves by a factor of 53 percent
- Capital cost savings of 12 percent
- Simplification of network build-out and provisioning
- Five-year cumulative OpEx and CapEx savings of 41 percent when converging residential, business, mobile, and wholesale services
- Greater power efficiency than other vendors by a factor of 169 percent
- CapEx and OpEx improvements because of the reduction in network elements required to enable services
- Accelerated network convergence goal while potentially increasing time to profitability
| | In addition to the OpEx and CapEx savings, a virtualized core solution supports the development of new internal and external business opportunities, which translate into expanded revenue and market share. Enterprises report that 50 percent of their network operation personnel spend their time managing switches and routers and infrastructure lifecycle management rather than on application-related issues, network design or new business models. | | |  | | Figure 4. Five-Year OpEx TCO Comparison (Converged versus PMO) | | | | With virtualization service providers are now able to share IP resources or create secure and private IP backbones for other service providers. Service providers can collapse data center tiers, push virtualization into services, storage, and even desktops or deploy new applications and services without the cost of rewiring the organization. | | | | Converged Infrastructure Savings | | | Competitive Solutions One Time Expense (1) as a Multiple of Juniper’s T1600, JCS1200 & TX Matrix Plus One-Time Expense | Competitive Solutions Annual OpEx (2) as a Multiple of Juniper’s T1600, JCS1200 & TX Matrix Plus Annual OpEx | | Cost to Deploy Residential, Business, Mobile & Wholesale Services | 1.14x | 2.11x | | | Table 2. Converged Infrastructure Savings | 1. One-time expenses include list price + space costs
2. OpEx includes annual maintenance + annual power usage | | |  | | Figure 5. Asset Utilization/Investment Strategy | | | | Although virtualization promotes business models that incorporate networks that build on optimization and consolidation, innovation and value, it does pose challenges for service providers, and CXOs must carefully consider the following: | | | - Financial and strategic implications of moving from a distributed network to a consolidated infrastructure. When determining software and hardware requirements associated with virtualization, savvy executives must consider both the increase in the value of their entire business, optimization of their ROI, TCO, and productivity improvement, as well as automation and extendibility impacts.
- How to tackle the issue of aligning management tools. This means taking a hard look at all of the costs associated with linking and extending the network, separate from the accountability for the strategic needs of the company from the corporate perspective.
- Putting in place a structure to ensure a successful physical to virtual migration/consolidation. When making this determination, it is critical that a company not be blinded by just the price per performance issue or the perception that maintenance issues in a virtual environment increases operational costs and efficiencies. Instead, they need to address some of IT’s and service provider’s most critical issues: data center consolidation and optimization; power, cooling and rack space; better utilization of server and computing power; users’ demands for service.
| | | | SUMMARY | Service providers realize that the migration to high performance networks is being driven by mission-critical traffic, SaaS, IP-based storage, reliance on real-time Web-based and network-based traffic, and the convergence of voice and video communication. To this end, service providers are assessing and adopting the newest and most flexible technologies that allow their businesses to run with fewer resources while providing the infrastructure to meet customers’ needs today and tomorrow. Importantly, decision makers understand that a key value of virtualization is the ability to link and extend by using a single operating system and a single management plane that works through their operating systems. Furthermore, an open operating system allows the addition of APIs and SDKs on top of this system to 1) create additional applications; 2) write management enhancements; 3) improve time to market; and 4) create a developer community.
Service providers are continually trying to stay one step ahead of rapidly changing network requirements and the demand to build high performance networks, while minimizing capital and operations costs and maximizing service revenue and profitability. The integration of services such as cloud and XaaS—and the potential for future service development through the PSDP—enables service providers to deliver, support, configure, and manage an array of services with the same tools, as well as build out rapidly and go-to-market strategies at minimal cost.
This case study not only supports Juniper’s core network virtualization analysis, but also lays out and validates key, strategic financial benefits for service providers. Service providers recognize that virtualization in their core environments is the value solution that not only enables them to reduce the complexity of their networks, but also simplify their operations and business processes and services, improve their end-users’ experiences, enable architectural capabilities, and allow for new business models. | | | |