SP Transition to NG Infrastructure based on NFV Service Offering

1. SP Transition to NG
Infrastructure based on NFV
Service Offering
Jason Kalai
Product Sales Specialist, Data Center
Global Service Provider

2. Cisco Confidential 2© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Open Source
SDN
OpenFlow
Open Compute
APIs
Virtualization
abstraction
HYPERVISOR
Data Centers
OPNFV
X86
AUTOMATION
3GPP Policy
An Emerging Conversation Map
Opportunity
Over-the-top
players
Content
New
Business
Models
BANDWIDTH
Total Cost
of Ownership
Intelligent
Network
OPEX
Revenue
Agility
SPEED
Over-the-top
applications
Consumer
Expectations
NEED
FORSPEED
Open
High-Value
OTT Applications
Low-Value
SPPipes
Optimize
Elastic
Accelerate
Cloud-Driven
Economics
BUSINESS
AGILITY
Business
Transformation
Monetize
Busines
Transformation
CHANGING
BUSINESS
MODELS
Operational
Agility
Vanishing
SP Business

3. Cisco Confidential 3© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Industry Trends
Agility
New
Revenue
Streams
CAPEX/OPEX
Impermanent
Faster
Time
to Market
Scalable
Capacity

4. Cisco Confidential 4© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Industry’s Mission : Business Transformation
Automation is Not New – But Drives Business Success
Virtualized
Resource Pools
(network ready
compute/storage)
Virtualized
Network Functions
Dynamic Set-Up,
Tear Down and
Provisioning
On-Demand Workload
Movement with
Service Profiles
Data Center
NetworkWorkload
Portability
Orchestration
Full Access to
Resource Pools
Anywhere
in the Cloud
Cloud Services
Cost reduction and agility leads to success for all

5. Cisco Confidential 5© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Several Industry Trends
Pace of Change is Accelerating – Simplification is Imperative
Open Source, Open APIs
Enabling Faster Innovation and Wide ParticipationOpen
Source
NFVSDN
Network Functions Virtualization, NFV
Transforming Network Architectures & Operations
Software Defined Networking, SDN
Abstracting to Better Application & Network Interaction
EachAddressing anAspect of the Challenges and Opportunities

6. Cisco Confidential 6© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Make My Business Better
Key Benefits of SDN/NFV Programmability
Source: Heavy Reading ~ 80 Respondents Q3/2014
Great insourcing of software development
Greater outsourcing of network operations
Greater participation in applications/services
Increased network supplier choice
Development of new business models
Faster innovation
Greater agility in adapting to services demand
0 10 20 30 40 50 60 70 80 90 100
Percent of Respondents

7. Cisco Confidential 7© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Most Important NFV Requirements
Elasticity, Performance, Security
Source: Heavy Reading ~ 80 Respondents Q3/2014
7
19
22
22
26
40
42
44
49
51
60
0 10 20 30 40 50 60 70
Energy efficiency
Migration & coexistence with existing platforms
Service continuity
Resilience
Network stability
Ease of operations (automation of functions)
Portability (of functions across data centers)
Management & orchestration
Security
High performance
Elasticity (scale hardware resources as needed)
Weighted Score

8. Cisco Confidential 8© 2013-2014 Cisco and/or its affiliates. All rights reserved.
SDN/NFV Market Potential
Rapid Deployment Growth Through 2018
0
500
1000
1500
2000
2500
3000
3500
2014
2015
2016
2017
2018
HW
SW
Services
Annual
SDN Market
Sources: ACG, ABI, Analysis Mason, Doyle, Heavy Reading 2014
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2014
2015
2016
2017
2018
NFV Market

9. Cisco Confidential 9© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Service Provider Virtualization Priorities
Sources: ACG, ABI, Analysis Mason, Doyle, Heavy Reading 2014
Technology Segments
8
17
23
23
31
32
36
45
51
54
59
0
10
20
30
40
50
60
70
Weighted Score
DPI, Load Balancing
Policy, Signaling
OSS/BSS, Analytics
VoLTE, SIP Trunking
Mobile Packet Core (EPC)
Voice Core (IMS)
Business CPE
Content Delivery
Home Gateway / Set Top
Edge (Session Border Control)
Radio Access Network
0
500
1000
1500
2000
$ Millions
Business
Cloud
Machine to Machine
Video
Consumer
Service Segments
Mobile

10. Cisco Confidential 10© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Our Industry’s Mission : Business Transformation
Automation is Not New – But Drives Business Success
Virtualized
Resource Pools
(network ready
compute/storage)
Virtualized
Network Functions
Dynamic Set-Up,
Tear Down and
Provisioning
On-Demand Workload
Movement with
Service Profiles
Data Center
NetworkWorkload
Portability
Orchestration
Full Access to
Resource Pools
Anywhere
in the Cloud
Cloud Services
Cost reduction and agility leads to success for all

11. Cisco Confidential 11© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Network Function Virtualization in SP Segment
Video
Headend
Mobile
Gateways
PE / Service
Edge
Mobile & Tablet
STB & TV
CE Router /
Broadband
Today
Mobile & Tablet
STB & TV
CE Router /
Broadband
Service 1
Service 2
Content 2
Desired End State
On-Net /
Off-Net
On-Net /
Off-Net
On-Net /
Off-Net
Content 1
SP’s
Cloud
Partner
Cloud
Today’s Service Delivery In
“Connected” Model
Any Device, Any Service, Any
Content, Any Where, Any Time
Target is to Achieve Optimized TCO, Agility, Cloud Consumption & economics. SP’s now “can afford to go wrong”
Transition
NFV = Networking + Cloud ! A Key Enabler of this Evolution
Top of the Mind for All SP’s

12. Cisco Confidential 12© 2013-2014 Cisco and/or its affiliates. All rights reserved.
NSO
(Powered by
tail-f NCS)
VNF-M
OpenStack/
VCenter
ODL/
Controller
SP’s OSS/BSS or Prime Order Fulfillment
KVM
(or ESXi)
Ceph
(or Cinder/Swift)
VTF / OVS
SP’s Portal / Prime Service Catalog
VNF 1
(Cisco or 3rd Party)
NSO
VNF 2
(Cisco or 3rd Party)
NSO
VNF 3
(Cisco or 3rd Party)
NSO
X86 Server X86 / SAN Network Switch
NFV Reference Architecture from ETSI
Service
Assurance
Animated
Wikipedia definition of NFVI – Set of resources that are used to host and connect virtual functions

13. Cisco Confidential 13© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Cloud & NFV is Set to Change the Server Market Adoption
Workloads & Network Functions are getting Cloudified
Source: Dell’Oro

14. Cisco Confidential 14© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Analysis Mason View
NFV Software Revenue Growth May take 5 years, till then investment in Hardware (Infra) & Services will be the driver

15. Cisco Confidential 15© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Motivations Behind the NFV Led Approach
Unified NFV Infrastructure
(Telco Grade DC)
vMS
(As a tenant for NFVI)
Virtual
Packet Core
(As a tenant for NFVI)
IT/VPC
(As a tenant for NFVI)
Virtualized
Infrastructure
Manager
TenantsTenantsTenants
Converge Infrastructure, Get it right once, achieve higher agility
Animated

16. vMS
(Virtual
Managed
Service)

17. Cisco Confidential 17© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Cisco Evolved Services Platform
Service Provider DC
StorageNetwork Compute
Open
APIs
Customers
Secure
Broadband
Internet
Service
Catalog
Orchestration
Engine
Flexible
CPE
Cisco ISR
Meraki MX
Ethernet NID
CSR1Kv ASAv vIPSWSAv
Cisco Virtual Managed Services ( vCPE + Security)
Self-Service Portal
Sources: ACG Research, Cisco BTA, Cisco SPTG
Operations
Savings
New revenue
Stream from
Enterprise customer

18. Cisco Confidential 18© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Customer Requests
Service
Cisco NFV Solution for Virtualized Managed Services
Enterprise Customer
Internet / Cloud / VPN
Service Orchestrator
VNF Manager
Virtual Topology
Manager
System
Management
and High
Availability
Internet/VPN
(Managed CPE)
SP Managed Service POD
Compute
Compute
Compute
Compute
TOR Switch
Compute
Compute
Compute
Compute
Compute
Compute
TOR Switch
Compute
Compute
Security
(Managed FW)
NAT WAAS
Managed Services
Customer request is delivered from the SP
Managed Service POD. The managed service is
orchestrated by Portal

19. Cisco Confidential 19© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Customer 1
Wants FW, NAT
Internet / Cloud / VPN
SP Managed Service POD
SP Datacenter
Customer 2
Wants vCPE,
vFW, vWAAS
vFW NAT
vCPE vFW vWAAS
Customer service is instantiated as a virtual service in
the managed service POD. Multiple services
combined into a service chain
Multi-tenanted
service chains
Service Orchestrator
VNF Manager
Virtual Topology
Manager
System
Management
and High
Availability
Internet/VPN
(Managed CPE)
Security
(Managed FW)
NAT WAAS
Managed Services
Customer
Requests
Service
Multi-Tenanted Service Instantiation & Service Chaining

20. Cisco Confidential 20© 2013-2014 Cisco and/or its affiliates. All rights reserved.
6%
1%
10%
6%
4%
4%
12%
4%
24%
1%
3%
2%
4%
3%
3%
6%
8%
1%
0.5%
Cisco Virtual Network
Functions
CPE
HW + Support
SP OPEX
SP DC
Compute + Network
Cisco
Orchestration
16%
15%
16%
24%
28%
Cisco Virtual Managed Services
Enabling Significant Business Advantages
• ~ 65 % Reduced OPEX (Up to 78%)
• ~ 200% Return On Investment
• ~ $200 Million Increased Revenues
5 Year Business Analysis
Sources: ACG Research, Cisco BTA, Cisco SPTG 2014

21. Cisco Confidential 21© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Customer Reference - DT
• Telco VPN Services
• Remote VPN, Basic, Full, and Premium
• Self-Service Telco Cloud Portal
• Converged IP/Optical - Native IPv6
• All Network Elements Virtualized
• Improved Customer Experience
Up to 65% Reduced OPEX
• Global Managed Network Services Market by 2018
• $62B Total >> 13% CAGR
Sources: MarketsandMarkets, Cisco BTA 2014
Telco Portal
Cisco Evolved Programmable Network
CSR1Kv ASAv WSAvESAv
Cisco Evolved Services Platform
Service
Catalog
Orchestration
Engine
DT Data Center

22. Virtual
Packet
Core/Mobility

23. Cisco Confidential 23© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Mobile Broadband / Location Venues
Self-Service Portal Service Provider DC
Services Platform
Virtual
EPC
Virtual
SON
Virtual
Policy
vISE
Services Bus
Network Storage Compute
Operations
Savings
New revenue
Orchestration Platform
Open
APIs
Service
Catalog
Orchestration
Engine

24. Cisco Confidential 24© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Service Provider Monetization Use Case Framework
Make Money Save Money
Subscriber-
Centric
§ Congestion-aware content
§ Application-based plans
§ Sponsored data offers
§ Mobile targeted advertising
§ Location/venue analytics
§ Location-based ads / services
§ Service bundling
§ Customer loyalty program
Network-
Centric
§ Tiered pricing plans
§ Shared data plans
§ Multi-device plans
§ Dual persona plans
§ Freemium
§ Happy hour plans
§ Video optimization
§ Network expansion with Small Cells
¥ €
£
$

25. Cisco Confidential 25© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Congestion-Aware Content Delivery
Challenge: Unpredictable network congestion deters premium and on-demand quality of service (QoS)
offers for high-bandwidth apps (such as gaming, video, enterprise apps)
Ensure that the subscriber experience meets
service expectations and entitlements
Truly monetize QoS (for example, turbo boost,
bandwidth on demand)
Monetize exclusive and premium content (for
example, NFL, Champions League, etc.)
¥ €
£
$

26. Cisco Confidential 26© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Application-based Plans
Challenge: Provide incentives for increased mobile data usage by price-sensitive subscribers, and/or to
justify upgrade from 3G to LTE
Including a "comes with data" option for popular apps like
Spotify, Twitter, Facebook, etc. gives greater certainty
Fee-based apps (such as Spotify) create opportunities for
mobile network operator (MNO) revenue share
Cross-marketing with App Provider drives new customer
conversions
¥ €
£
$

27. Cisco Confidential 27© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Sponsored Data Offers
Challenge: Data Quota-conscious users who ration consumption of rich-media content are using less
mobile data and not upgrading to higher data plans
Gain additional revenues from data quota savvy
subscribers
Increase non-access revenue sources
(advertisers, sponsors)
Create business partnerships with content providers
to increase usage
¥ €
£
$

28. Cisco Confidential 28© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Mobile Targeted Advertising
Challenge: Mobile Ads not effectively targeted and personalized, leading to poor CPM rates; Operators
not getting revenues from OTT mobile advertising.
Monetize operators’ real-time network analytics (such as
network conditions, subscriber profiles, mobile content
usage, etc.) to anonymously target mobile ads
Create new partnerships in Ad ecosystem of content
providers, ad networks, advertisers
¥ €
£
$

29. Cisco Confidential 29© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Location-Based Analytics
Challenge: Enterprises and venues want to use the “gold mine” of Wi-Fi location-based information
Service Providers increase revenues through
sales of reports to enterprises and venues
(e.g., $5,000/report)
Analytics can align with service providers’
“big data” strategy
Venues can use reports for data-driven decisions
¥ €
£
$

30. XaaS
(IaaS,
SaaS,
PaaS,
UCaaS,
BigData)

31. Cisco Confidential 31© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Revenue & Revenue/
Sq. Ft.
Hosting
PaaS
SaaS
Internal CRM, BSS, OSS
Virtual Desktop
Disaster Recovery
Cloud Burst
Service Providers are Expanding Services
SP Services (Internal & External )
IaaS
UC aaS
Video aaS
“X” aaS

32. Cisco Confidential 32© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Infrastructure as a Service
Example: Compute as a Service
CRM
BSS
ServicesServices
SP Web service
Internal Mail
System
Email
SP Cloud
App
OS
App
OS
App
OS
App
OS
App
OS
App
OS
Light
VMs
App
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Average
VMs
App
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App
OS
Power
VMs

33. Cisco Confidential 33© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Compute as a Service
Implementation Example
CRM
BSS
ServicesServices
SP Web service
Web
Hostng
Internal Mail
System
Email
SP Cloud
App
OS
App
OS
App
OS
App
OS
App
OS
App
OS
Light
VMs
App
OS
App
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Average
VMs
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OS
Power
VMs
§ DC size: 5,000 sq. ft.
§ # of VMs : 16,000
§ Annual saving: $10M+
§ Gross margin: 80%
§ Net margin: 60%
§ Annual growth (revenue): 10%
§ NPV of cash flow: $40M+
7,000

34. UCaaS

35. Cisco Confidential 35© 2013-2014 Cisco and/or its affiliates. All rights reserved.
UCaaS
Enterprise Business
• Grow revenue
• Lower overall
operating costs
• Acquire/retain
customers
• Drive new market
offering or business
practices
• Improve workforce
productivity
Enterprise IT Initiatives(3)
• Improve IT efficiency
• Streamline/improve
business processes
• Increase IT resources to
drive business innovation
• Improve customer
management capabilities
Medium and large businesses
will appreciate the economies
provided by hosted IP
telephony, but will seek such
solutions mostly so they can
focus on core businesses
processes and gain access to
applications and capabilities
that they can test without
making a capital investment.
Elka Popova, Global Program
Director,
Frost & Sullivan
7 out of 10 Enterprises are
investing in Collaboration solutions
30%
will be Hosted

36. Cisco Confidential 36© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Cloud Collaboration Services leverage
business transformation to create SP value
New Revenue opportunities for MSP
• Mitigate exposure of traditional business offers to price erosion
and costly churn, offset decline in traditional voice revenues
• Monetize network capacity and IP services
MSP competing to win end-customer
• Create differentiated UC proposal to compete with OTT and SI
• New UC consumption model
Offer premium customer experience to
Enterprises in cost-effective way
• SP is taking care of complexity of enterprise collaboration across
networks, devices, places and experiences
• Cost effective solution for provisioning, operations, management
and billing
$105 M/ 5yr
Hosted Collaboration
incremental
opportunity (1)
$2 M/yr
Recovered voice
revenue if reducing
churn by 1% (1)
41%
Lower Ent TCO )

37. Cisco Confidential 37© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Hosted Collaboration Solution architecture
transforms SP services delivery
End Customer Experiences
Network Transformation
Service Transformation
Operations Transformation
Improve operational
efficiencies, optimize
resources, assure the
services and end-user
experience
Smoothly transition to Cloud
infrastructure to optimize and
scale capacity
Accelerate Time to Market,
introduce new services &
monetize IP infrastructure Voice & Video
Voicemail &
Integrated Messaging Mobility
Scalable System
Architecture
Unified Communication
System 8.0
Optimized Virtualization
Platform
Presence &
Instant Messaging
Conferencing
Web 2.0Web 2.0 CollaborationCollaboration

38. Cisco Confidential 38© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Summary: Hosted Collaboration Solution
change business dynamics with cloud service
Business
Models
Own HCS
Buy HCS as a Service
from whitelabel partner
Provide HCS as a service
to other MSPs
Faster to sell
Short sales and delivery
cycle
Defined service, price,
delivery models
Increased customer loyalty
OPEX market trend
Rich functionality
Upsell strategy
Simpler to
operate
No onsite equipment to
manage
Virtualization in Data
Center
Shorter service delivery
Service Provisioning and
Assurance Tools
Cisco Services support
Joint Go To
Market
Joint Beachhead accounts
approach
Joint Funnel review
Marketing Support
Sales Trainings
Joint demand creation
activities

39. Big
Data

40. Cisco Confidential 40© 2013-2014 Cisco and/or its affiliates. All rights reserved.
Manual
systems/processes
basic
reporMng
tools
for
high
-­‐gained
customer
segmentaMon
Marketing / Customer Lifecycle Management– SP
Allows SPs to profile, target and monetize high-value customers through targeted BTL
campaigns
Today
(Manual, siloed systems and processes)
Data Infomediary
(Integrated internal and external systems and processes)
SP Benefit
• Rapid
(2-­‐4)
campaigns/day
• Churn
reducMon
by
4-­‐8%
• Higher
offer
take
up
rate
• New
service
innovaMon,
based
on
emerging
consumpMon
paVers
• Service
Mering
and
value
based
charging
End User Benefit
• More
relevant
/
targeted
offers
• InnovaMve
services
• Pricing
and
placement
based
on
specific
consumer
needs
Current Situation
• Few
~2-­‐4
campaigns/month
• High
churn
–
ineffecMve
broad
segments
(Mn
subs)
based
on
standard
KPIs
like
ARPU
and
LoS
• Incomplete
customer
view
• Slow,
batch,
manual
data
extracMon
and
reporMng
Scope of Impact
Billing
IN/
CDR
Charging
VAS
IVR
OBD
CRM
SMS
Customer
side
Network
side
CLM
data
mart
IN/CDR
Billing
Charging
VAS
SMS
Call
center
OBD
IVR
External
systems
Internal
customer
side
systems
Internal
systems
Fine
grained
micro-­‐segmentaMon
engine,
campaign
management
and
predicMve
analyMcs
• Routers
/
switches
• Towers
• Media
gateways
• Social
media
• Market
research
• Credit
agencies
• Retailers,
Banks,
etc.
Virtualized
Data
services
/
federaMon
layer
Batch
Real-­‐
;me
Metrics that show
marketing efficiency
– tied to pain point –
how much being
spent for example

41. Thank
You