Service Providers Cut Costs and Boost Agility by Taking a Cloud Approach to Operations

Next Generation Communications Blog

Service Providers Cut Costs and Boost Agility by Taking a Cloud Approach to Operations

By Mae Kowalke

The cloud is one of the hottest trends in computing, and communication service providers (CSPs) have an edge when it comes to cloud services. That’s because unlike IT and internet companies, CSPs also control their own network. This gives CSP’s a unique advantage and the carrier cloud a leg up on other offerings.

But the carrier cloud is only one way that CSPs can benefit from the cloud. They also can apply the same technique used with the cloud, namely virtualization, to evolve their own operations.

“With this approach, CSPs can virtualize communications and messaging applications, along with fixed and mobile network functions, to reap the same rewards their cloud customers are enjoying,” noted a recent Alcatel-Lucent (ALU) white paper, Network Functions Virtualization: From Vaporware to New Era .

Alcatel-Lucent has been working on virtual telecommunications for more than  year and a half—which is longer than most in this fast-moving space—and its experience and economic models show that using network functions virtualization (NFV) can bring a number of benefits to CSPs.

NFV challenges the idea that purpose-built hardware delivers a better price-performance ratio than general-purpose servers with lower performance.

In fact, Alcatel-Lucent has confirmed that capital expenditures drop by up to 50 percent over a five year period using NFV due to better resource utilization, and operating expenditure savings follow capital expense savings because there is less equipment to deploy and manage.

“With this approach, CSPs can move toward a homogeneous cloud-based infrastructure where network elements and applications are implemented as sets of virtual machines, storage devices and associated network configurations,” noted the paper. “Because the infrastructure is now shared and amortized across all applications, it becomes a platform for delivering carrier cloud services to enterprises and for transforming the CSP’s own operations.”

The greatest benefits go to CSPs that leverage software-defined networking and open source options such as OpenStack or CloudStack, according to the paper, since there is the most flexibility and innovation in that space.

While cost savings are itself a good reason that CSPs should consider taking the lessons of the cloud data center and applying it to operations, agility is perhaps the greatest benefit.

“When applications are virtualized, CSPs can introduce new services much faster and at much lower cost,” according to the paper. “Installing a new service no longer involves buying new equipment and sending staff to install it in any number of field locations. Instead, an application, such as a video conferencing server, can be onboarded onto a cloud management system then automatically deployed on virtual machines in the carrier cloud. The entire process takes just minutes, rather than months.”

The bottom line is that the cloud is not just for helping customers, it is also about creating operational efficiencies.

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