Many IT shops are looking at ways to adapt their corporate infrastructure to a Software-Defined Wide Area Network (SD-WAN) that enables an open networking ecosystem across multi-vendor equipment. The October 2014 report from the ONUG (Open Networking User Group) SD-WAN Working Group, entitled Software-Defined WAN Use Case provides input for enterprise planning efforts.
High quality wireless WAN connectivity based on 4G LTE (Long Term Evolution) has an important role to play in the SD-WAN, providing high data rates with 10mS end-user latency, and packet optimized radio access technology supporting flexible bandwidth deployments. Its network architecture supports packet-switched traffic with seamless mobility and quality of service. Data rates peak at 300Mbps downlink and 75Mbps uplink with all interfaces between network nodes being IP based, including the backhaul connection to the radio base stations
The ONUG report premise is that almost all businesses expect 24 x 7 WAN availability, providing high availability and ensuring a best-case customer experience. This must span a wide variety of applications, end user devices and remote sites/branch access. That requires consistent and deterministic levels of network performance metrics, e.g., jitter, packet delay/loss and quality of service amongst others. Direct Internet access is also increasingly becoming a staple for remote sites/branches, providing direct access to e-commerce and cloud-based applications without the long haul transit to and from the corporate data center.
However, EU enterprises have been relatively slow to embrace LTE. The GSMA industry association figures show that by the end of 2013 two out of three mobile users in South Korea were on LTE. Europe reached a paltry 3% of mobile subscribers being LTE connected, with Telenor in Norway leading with 25% penetration, followed by EE in the UK and KPN in the Netherlands with 14% LTE subscriber levels. And it’s not just adoption levels that leave the EU behind – it’s also the infrastructure. In the US, LTE network coverage fast approaches 100%. In the EU, it’s little over 50%. As of April 2014, the GSMA identified 80 commercial LTE networks in 26 of 28 EU countries. Very few of these have seen fast revenue growth in LTE.
Monetizing the growing demand for mobile capacity in Europe is constrained by four major impediments:
- Lack of scale: European governments demand at least three competing mobile infrastructure providers in each country, and the EU has blocked several large-scale mergers and acquisition attempts, and put price caps on international roaming charges. With an additional wealth of MVNO’s (Mobile Virtual Network Operators) across Europe, competition is much tougher and revenue margins much slimmer than in the US, where AT&T and Verizon call the shots.
- Lack of service differentiation: Net neutrality prohibits service providers from monetizing infrastructure investments by offering differentiated Internet service levels.
- Lack of faith: The financial hurt experienced by the operators when they launched 3G is also still on their books. Many carriers invested heavily in 3G frequency auctions and infrastructure, and then faced serious implementation issues, non-compliant 3G devices and customer disenchantment. Now that 3G is running smoothly, many customers seem happy with their 3G smartphones and tablets, and have demonstrated little incentive to trade up.
- Lack of support from content providers: OTT (Over The Top) content providers, notably Netflix and HBO are flooding the Internet, yet they pay very little to the infrastructure providers – at least as long as Net Neutrality reigns.
So the traditional mobile market remedy of introducing new generations of much more capable mobile infrastructure that lower operator costs and expand network capacity to drive new demand has lost much of its luster. Governed by the GSMA, orderly orchestration of successive generations of RAN (Radio Access Network) and mobile devices have underpinned the massive shift from fixed to mobile connectivity.
Something has to give! The synergy between SD-WAN infrastructures and LTE adoption may be a key factor in motivating European carriers to speed up their LTE deployments. Higher speed, higher cost MPLS circuits (DS3 and above) take a long time to provision. . Connectivity to the same remote sites may be provided via low-latency LTE wireless access with much shorter provisioning cycles.
It remains to be seen whether LTE connectivity can boost SD-WAN infrastructure adoption in the short term – even with cheaper and faster WAN LTE links, it will take significant efforts to convince enterprise planners that SD-WAN issues around integration, interoperability, and equipment switch-outs can be done cost effectively. ONUG plays a very important role in bringing feature-focused vendors together with cost-conscious enterprise planners and hammering out a joint evolution path – at a time when enterprises are hard pressed to keep up with massive mobile traffic growth and provide the infrastructure that encompasses their mobile users and branch offices.
This post is part of an ongoing series examining the issues facing enterprises seeking to implement a Software-Defined WAN (SD-WAN) solution, as addressed in the Open Networking User Group white paper, “ONUG Software-Defined WAN Use Case”.