Dynamic network services: Case for carrier SDN

Carrier SDN provides a tool that overcomes the technology and organizational barriers that have prevented carriers from creating and delivering their services using the cloud service delivery model.

If you have a background in carrier services, like me, you are undoubtedly tired of hearing about how much more agile, responsive, and cost efficient cloud service providers are than carrier network operators. The criticism runs along the line of “cloud provider X provides an on-demand service delivery model with consumption-based pricing while you are still trying to lock us into a multiyear contract for fixed bandwidth capacity at a fixed price”.

The carrier’s dilemma

Figure 1 illustrates the source of technology and organizational constraints that have caused carriers to be slow and inflexible.

Alcatel-Lucent carrier SDN business case

The traditional architecture uses custom OSS/IT integration code for each network element type to link the network elements to the OSS/IT applications. This design is high cost and is difficult to modify to accommodate new services or to upgrade/downgrade subscribers’ services.

Figure 1. Traditional network architecture

Figure 1. Carrier SDN architecture

  • Each software stack involves unique proprietary code that is difficult and costly to modify
  • Technical staff is dedicated to the operation and maintenance of each stack
  • Manual information handoffs are required to effect changes across each technology stack

Network capacity management is also severely impaired.

  • Commitments to add large blocks of bandwidth capacity must be made many months before they are needed. Three possible economic penalties are incurred:
    1. Capacity sets are unused for long periods.
    2. The capacity forecast may be too high and result in capacity that is never used: stranded capacity.
    3. The capacity forecast may be too low. This results in dissatisfied customers and lost revenue.
  • Underutilized capacity cannot be redeployed to where it is needed.
  • Substantial bandwidth capacity must be reserved to protect against the possibility of network outages.

Alcatel-Lucent: Carrier SDN architecture

Figure 2. Traditional network architecture

Figure 2 shows how carrier SDN -- in this case the Alcatel-Lucent Network Services Platform (NSP) -- can prevent economic harm.

The carrier SDN architecture uses consistent information models of services and network elements to interconnect all of the network elements to the OSS/IT applications. Standards-based protocols are used to communicate between the applications and the 3 infrastructure platforms. A unified solution automates deployments and operations. This results in simpler, faster, and more agile operations with open communications in each direction.

For more information, see Paul Parker-Johnson’s Building Networks as Agile as the Cloud.

New revenue creation proof point: Bandwidth calendaring

One opportunity enabled by carrier SDN is bandwidth calendaring—reserving extra bandwidth for several hours for a bandwidth intensive task such as backup. Figure 3 compares the revenue created by NSP to that of the present mode of operations (PMO).

Alcatel-Lucent: Bandwidth calendaring revenue comparison

Figure 3. Bandwidth calendaring revenue comparison
Source: ACG Research

The carrier SDN solution produces about 8 times more revenue than the PMO.

  • The agility enabled by NSP gives its service offering a prime mover advantage over the PMO
  • PMO’s slow business processes pushes out its market penetration curve and delays revenue recognition
  • NSP’s short service creation time allows many more service ideas to be tried within a year and thus increases the odds of finding a winner

New revenue creation proof point: Bandwidth on demand

A 2nd proof point is bandwidth on demand—ordering up more bandwidth as needed. One application is occasional migration of VMs between data centers. Figure 4 shows the revenue comparison.

Alcatel-Lucent: Bandwidth on Demand Revenue Comparison

Figure 4. Bandwidth on demand revenue comparison
Source: ACG Research

In this case NSP produces 8 to 9 times more revenue than the PMO. The NSP solution benefits from the same agility advantages cited above. Also both service offerings benefit from NSP’s more efficient use of available bandwidth. This provides a lower cost point for the carrier. The carrier can in turn offer a lower price point to its customers. This stimulates demand.


Dr. Michael Kennedy is a Principal Analyst at ACG Research

Related Materials

Network Services Platform web page

ACG Research NSP business case

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