The cable business typically doesn’t feature high on lists of dynamic industries that rapidly adopt innovative new technologies in order to deliver compelling new products and stellar customer support.
Under the surface, however, cable operators are using virtualization technologies to achieve major changes in how their networks are architected and to expand the services that they offer. By leveraging the same network virtualization concepts that are being adopted by telecom service providers, they see the potential to transform their operations and unlock the full potential of their infrastructure.
In this post, we’ll outline some of the key trends around the use of virtualization by cable operators. We’ll discuss the business opportunities for cable that should open up as a result of virtualization and highlight some of the key challenges that still need to be addressed, both technical and operational.
Virtualization trends: much more than OPEX reduction
We don’t know how much time Larry the Cable Guy spends reading arcane documents from the ETSI Network Functions Virtualization (NFV) group, but the most obvious benefit that virtualization brings to cable operators is the one that’s been discussed ever since NFV was invented: OPEX reduction is clearly the low-hanging fruit. The concept of a “truck roll” is familiar to all of us who’ve ever spent a day at home waiting for Larry to show up so that he can replace or reconfigure a set-top box. Virtualizing the CPE (set-top box) function in the cloud not only reduces the cost of the box itself, it also simplifies and shortens the installation process. Once the right orchestration solution is in place in the cloud, all Larry has to do is install the box, cable it and power it on. The centralized orchestration takes care of the configuration and provisioning automatically, so Larry is off to his next call instead of sitting on the phone with the central office. And there’s no need for him to come back when the box needs upgrading, because all that software functionality is now in the cloud.
Beyond OPEX reductions, virtualization is key to other important cable trends that bring tangible value to both consumers and enterprise customers.
Video-on-Demand (VoD) represents a significant threat to cable operators, given the risk that the Over-the-Top (OTT) players like Amazon, Apple, Google and Netflix will dominate this space. NFV provides a cloud-based operations model that allows the cable companies to compete effectively. It enables greater personalization of content and services, including dynamic, targeted ad insertion based on user and/or device profiles. Virtualization brings a cost-effective approach to TV Everywhere, by enabling video processing to be shifted between the core and edge hubs for efficient resource utilization. And the trend towards “homespots” (residential WiFi gateways that support outdoor public access) requires virtualized gateways at the network edge.
While the trends above are certainly visible to customers, changes in the network architecture itself also deliver significant business benefits to the cable operators. Tomorrow’s cable networks will incorporate multiple technologies such as DOCSIS 3.1, Converged Cable Access Platform (CCAP) and Remote-PHY, so NFV is critical for managing this hybrid infrastructure. NFV also enables Virtual Network Functions (VNFs) to be instantiated on servers at the edge, supporting services that require low latency in a virtualized environment.
Virtualization brings new business opportunities
Virtualization gives cable operators the flexibility that allows them to target new business opportunities. One example of this is the ability to offer services seamlessly across multiple networks, whether those are traditional Hybrid Fiber-Coax (HFC), all-fiber or WiFi. This is critical for meeting the expectations of today’s mobile customers, in both their personal and business lives. Through virtualization, operators can quickly trial new services or features with a targeted subset of their customer base, then either scale up and deploy them widely or shut them down without incurring the impact of dedicated hardware that now becomes redundant. NFV-based orchestration facilitates self-service portals that allow both consumers and enterprise customers to order and configure new services themselves.
While multiscreen video services constitute an important part of today’s customers’ expectations, they also contribute to the need for low-cost, flexible Content Delivery Networks (CDNs). The virtualization of CDNs at the network edge, properly orchestrated in line with NFV, enables operators to instantiate CDNs dynamically, in response to changing traffic patterns and customer needs. This CDN virtualization also lowers the cost of sophisticated video processing such as blending, scaling and processing.
Internet of Things (IoT) services represent a significant business opportunity for cable operators, just as for their telecom counterparts. Analysts predict an installed base of billions of IoT-enabled devices in US homes by 2020, all requiring connectivity for sensing, monitoring and control. Cable operators are focused on architecting a massively-scalable, cloud-based environment for IoT processing, with virtualization hosted at the edge to ensure low latency comparable to what would be delivered by processing hosted on the device or gateway.
These new business opportunities, as well as others not covered here, illustrate that, for cable operators, network virtualization is about much more than OPEX reductions. It can enable them to be positioned as leaders in the wide range of broadband services that tomorrow’s customers will expect (and will pay for). In addition, the prevalence of WiFi on smartphones and tablets creates opportunities for them to participate effectively in the mobile space. The next few years could be interesting in the world of cable.
A few hurdles to be overcome
Of course, this rosy picture for cable operators is blurred by a few critical challenges, some business-related and some technical.
The toughest challenge may well be the skill sets involved in successfully deploying and operating an NFV-based environment. Staffers at cable companies today are not proficient in dev/ops or the operation of large, complex clouds. Despite all the good work done by ETSI and the growing pool of NFV solution vendors, integrating, operating and maintaining these technologies is by no means a trivial task. Human capital may be the highest-cost and highest-risk aspect of this transformation.
At the same time, the growing market for broadband services brings competition from multiple angles. The traditional telecom service providers offer basic connectivity over fixed networks as well as wireless. New entrants such as municipal fiber and Google present additional choices for both consumers and enterprise customers. Cloud-based OTT providers are able to decouple value-added services from basic access, while marketing and deploying those services at cloud speed.
There are technical challenges too. Virtualized solutions for both business and residential customers must scale efficiently to cover millions of locations as well as millions of devices. Scaling the complete NFV process represents a significant operational challenge, though many cable operators have relevant experience thanks to their deployments of virtualized video gateways and other video services. The NFV-based orchestration system must coordinate virtualized services hosted in both core and edge locations, while also manage operations that span multiple network types (HFC, all-fiber and WiFi).
One of the most critical challenges relates to the reliability of the infrastructure and the services. A single virtualized instance can support a large number of customers, including enterprises with stringent Service Level Agreements (SLAs), so the cost of service downtime is prohibitive for the operator. Virtualized services must be deployed on a platform that guarantees the level of uptime typically associated with telecom networks, which implies “six-nines” (99.9999%) infrastructure reliability. The fundamental concept is the same as for NFV deployments in telecom: at some point, virtualized applications will fail and servers will fail, so the infrastructure platform must be capable of maintaining the operation of the services under a wide range of failure scenarios.
In summary, virtualization can enable cable operators to capitalize on new business opportunities and leverage the demand from both consumers and enterprise customers for new, value-added broadband services. Many of the technologies developed for virtualized telecom infrastructure are directly applicable to cable, though significant challenges remain and the most significant of those may be staffing and skill-sets.
What are your thoughts on this? Is network virtualization poised to transform the cable industry or will the main effect be limited to operational cost reduction?