“Quien Es Mas Macho”: Software Or Optics?

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Last week I attended an Optical/SDN conference in NY while I also moderated an SDN user panel at another conference in Silicon Valley.  In attending such conferences, I always look forward to learning how traditional service providers (e.g. Verizon) and content providers (e.g. Google) utilize or plan to utilize SDN to address major operational pain and cost points in their networks.  For example, major content providers speaking at these conferences have already begun to utilize internally developed software-based load balancing and security applications within the SDN framework.  As an example, one major content/hosting provider told me at one of these conferences that they no longer add appliance based load balancers to one of their network services as they have developed and utilize their own internally developed virtual load balancer.  The virtualization of some basic functionality typically found within security and application delivery controller appliances, is now an initial use case within the SDN framework by content providers like Amazon, Azure, Facebook, and Google.

When it comes to service provider wide area connectivity, however, it is striking for me to hear how Google has achieved up to 90% utilization on their data center to data center WAN links in their current SDN deployment, while traditional telecom operators like Verizon, CenturyLink etc. continue to echo that their respective optical transport networks remain dramatically underutilized given these networks were designed for peak traffic load rates and up to 50% of the networks were constructed as spare, idle capacity to address various failure scenarios (e.g. fiber cuts, human error when servicing equipment etc.).  So, is the SDN software development expertise of content companies like Google so superior that it allows them to achieve such a high WAN utilization rate vs. traditional telecom operators?

Certainly software centric content companies like Google have significant resources that allow them to develop SDN based network optimization software to achieve such high WAN connectivity rates, but they also have the advantages over traditional telecom operators in the type of traffic they carry across their WAN and that they don’t typically deploy their own national fiber network.  For example, when one thinks of the main end user Google applications, Gmail, YouTube and Search come to mind.  While these are important services, users do not typically pay directly for such services given the advertising model and Service Level Agreements (SLAs) are not likely as comprehensive as what a carrier like Verizon has with its customers.  Also, when an end user experiences a slow/choppy video experience with YouTube, the user usually blames its broadband service provider, not Google.  Separately, Google probably does not utilize its SDN network optimization software down to the optical layer as it likely utilizes carriers like Verizon for national optical transport.   Finally, since carriers like Verizon in the US are not permitted to use Deep Packet Inspection (DPI) techniques to prioritize traffic to help improve transport utilization (which could be especially useful during failure scenarios), the solution for a carrier like Verizon to improving and maximizing transport utilization is not likely to be via a software-based SDN solution alone.

With this is a backdrop, it seems that there is an opportunity for equipment suppliers to traditional telecom operators to “marry” SDN software and optics while also using utilizing other tools like the GMPLS and network analytics to dramatically improve optical network utilization across the WAN and within the optical transport network while also maintaining a high level of service assurance.  Optical transport is a huge cost for network operators, and if the effective average optical transport utilization rates are in 15%-25% range, that seems like a pain point that is ripe for a solution.  The start-up company Plexxi is “marrying” optics, SDN control and mathematical algorithms to address scale and service agility to tackle pain points within the data center. If successful, Plexxi may end up being “Mas Macho” in the data center given this vision.   I would not be surprised if Cisco data center switching spin-in Insieme may also be looking at some level of SDN control and optics integration for the data center as part of their product solution.  We will likely formally hear about Insieme’s product this summer.

As for the WAN, however, VCs, are not typically enthusiastic about funding service provider equipment companies given long sales cycles with Tier1 carriers and customer concentration issues.  Throw in the word optics to business case and that makes for strike three.  Thus, traditional optics and/or router equipment companies may have an opportunity to differentiate themselves in solving the high cost, low WAN optical transport utilization rate problem.  While SDN is about separating the control plane and data plane and using software applications and network virtualization to achieve service creation and network agility, its initial focus was for Layer 2/3 switches with an “electrical” based fabric within the data center. Optimizing expensive WAN links for traffic flows that span both electrical fabrics within the data center and optical wavelengths across the WAN while dealing with vendor specific optical intricacies such as Forward Error Correction (FEC), amplifier settings, modulation techniques etc. is not likely to be solved by SDN software control alone.  To be “Mas Macho” in solving the optical WAN utilization challenge, the solution is likely to require multiple ingredients, including, SDN software control, multi-vendor element management system support and visualization, network analytics, a strong optical pedigree and the use of industry protocols (e.g. GMPLS, Openflow etc.).

It is no surprise that Cisco has acquired both SDN software and optical sub-system companies (e.g. CoreOptics and Lightwire) over the past couple of years.   While silicon photonics will play a critical role in achieving single chassis, highly dense routers with 400G interfaces, is Cisco also looking beyond next generation 400G port routers and the broader issue of low WAN utilization rates?   Alcatel-Lucent, another company with core competencies in routing and optics also recently announced its Nuage Networks SDN Virtualized Services Platform solution. While Nuage offers some innovative WAN features in service provider MPLS VPNs, it does not address utilization issues in the optical transport domain.  Will Alcatel-Lucent seek to leverage its initial Nuage SDN software solution with its traditional competency in routing and optics to address the optical transport utilization issue?  Time will tell whether Alcatel-Lucent, Cisco and/or other vendor(s) will be “Mas Macho” marrying software with optics in solving perhaps one of the most significant cost pain points today in service provider WAN transport.