The Changing World of Service Provider CPE (Part 2)
For Service Providers, Universal Customer Premise Equipment (uCPE) is getting more interesting every day. IHS Market analyst, Michael Howard, said in a recent SDxCentral article that “the uCPE [universal customer premises equipment] phenomenon is an almost perfect storm of five trends, whether it is white box, grey box, or more proprietary. This new uCPE market is resulting from enterprise demand that virtualized security functions reside physically inside the walls of enterprise locations.” The trends that Howard cites are:
- Expectation of on-demand services
- NFV and SDN acceleration on COTS servers
- Operators’ need for revenue generation, capex savings, and opex optimization
- SD-WAN adoption by enterprises
- Compute at the edge of the network
In a recent study, IHS reported that 85 percent of operators plan to deploy physical uCPE at a location to run virtual network functions (VNFs). Some well-known operators are leading the charge.
For example, consider most recently the announcement from AT&T that they are buying the Vyatta virtual router SW from Brocade for its uCPE strategy.
This move propels AT&T forward in its uCPE strategy similarly to the Verizon announcement I wrote about recently. As with Verizon, this will enable AT&T to deploy uCPE in a generic Linux server and remotely provision VNFs, including the two most common: VPN connectivity and security. IHS research has shown they expect uCPE to become a 750M USD market.
AT&T’s strategy here is interesting in that they are buying the router OS and the R&D teams. This implies their intention to own and operate their own VNFs, at least at the most basic level. AT&T’s offering consists of a single AT&T branded x86 server that can be used to mix and match software-based virtual network functions (VNFs) depending on what functions are needed at each location. Some more advanced VNFs may still be sold to AT&T by the vendor community. As opposed to Verizon, which is clearly driving the vendor community to offer substitute VNFs based on an open SW platform, AT&T is developing an open platform with software they will maintain and operate, perhaps even with their own secret sauce. It will be interesting to see if AT&T now follows up by licensing additional basic VNFs for their uCPE, for example a security VNF.
French operator Orange is already looking at Security as a VNF. Orange is looking into service chaining Security with two other VNFs, namely routing and WAN optimization. In a recent Lightreading article, Iain Morris describes Orange’s goal to develop a universal CPE to introduce the technology by the end of this year. With Orange Business Services seeking to replace all 400,000 existing physical CPEs it currently maintains at customer sites worldwide, we are seeing multiple ambitious but worthwhile initiatives in the new era of virtualization.