CSPs have an opportunity to utilize NFV to their advantage and exploit their proximity to end user by pushing the content closer, optimizing delivery costs and user-experience and also working out better content monetization models.
I have previously written about how the emergence of network cloud or more specially SDN and NFV brings a ray of hope for stagnating telecom industry and some of the technology considerations as well as organizational transformation challenges that need to be addressed for successful attainment of the potential benefits.
We know that global traffic consumption is increasing exponentially and even doubling every year in some markets. The majority of the traffic today in Internet video content, Cisco 2014 VNI predicts that video will constitute up to 78% of the global Internet traffic by 2018. Efficient delivery of this video dominated content is a challenge for current networks on both technical and commercial fronts. From technology perspective, traditional Internet was designed to deliver packet flows, which is not yet optimized for video traffic. There is no integration of application layer intelligence along the value chain as well as no end-to-end QoS mechanisms. On commercial side, content owners keep on developing higher quality content because on low delivery costs and telecom operators are faced with the dilemma of continuously expanding bandwidth without any clear ROI due to the existing interconnection and peering models.
The result is that various Content Delivery Networks (CDNs) have been deployed to improve efficiency and content quality. The CDN market had evolved rapidly over the last decade with CSPs, Internet Players/Content Providers (like Google, Yahoo, Microsoft etc.) and even new Pure-play CDN providers (like Akamai, Limelight, Level 3, CDNetworks etc.) all building their own content distribution networks. As per Cisco 2014 VNI, more than 55% of total Internet traffic will be CDNized by 2018.
However, traditional CDNs lack integration down the service provider networks or up with the Applications to ensure E2E QoS & SLA. CSPs/Service providers have to deliver two kinds on content: CSP (managed) content and non-CSP (unmanaged) content. Managed content has to be delivered On-Net (for consumers within the network reach of CSP) and Off-Net (for consumers on other CSP networks). Similarly, unmanaged content can be CDNized or Non-CDNized. As a result, there are multiple models for optimizing content delivery for CSPs:
In a bid to improve average response time for their customers and reduce the traffic on expensive international links, several operators deployed transparent Internet caching. However, its utilization is impacted by cache-ability and homogeneity of the content. With HTML5 and Internet 2.0 more and more content is dynamic which reduces caching efficiency and makes the business case for stand-alone caching quite unattractive.
This is the basic entry model of OTT and CDN players by collocating their nodes to the edge of service provider networks. This is the most commonly practiced model by Telcos where integration is simple and costs are low. This model can be with or without payments to Telcos who also benefit from improved user experience, however they lose out on majority of the revenue generated by OTT/CDN players for content delivery value chain. Simple collocation at the edge of the network doesn’t add enough value for OTT/CDN players to convince them to share revenue and Telcos still can’t ensure flawless experience for their customers.
Another model is to build own CDN to efficiently deliver the content. This approach focuses more on generating revenue and monetization of content. However, the CDN footprint and the amount of content originating from that footprint impact the business case. Several operators have gone down this route but they have to compete with global CDN players who have extensive presence all over the world and are able to offer very competitive offerings. Hence, the business case is dubious for small to medium sized operators.
As opposed to building own CDN, this model enables CSPs to white-label commercial CDN offerings to sell to their Enterprise customers without the required investment on infrastructure. It provides additional revenue opportunity for Telcos as well as CDN players. Deployment is very quick and the risk to either is quite low, that is the reason the many Tier-1/2 service providers are adopting this approach. However, this model limits CSP value as a marketing arm of CDN player. Other than customized product bundles, there is not much value that CSPs offer the Enterprises and there is nothing stopping them to go directly with CDN players as this way they can pick and chose the best offer for their requirements.
Today all CDNs are working as silos with no way for content providers to ensure E2E QoS/SLA for their content, which may traverse across multiple networks/CDNs before reaching the end customers. The concept of CDN Interconnection (CDNI) or CDN Federation is aimed to provide seamless content delivery with same QoS parameters across multiple networks. Standardization bodies like IETF and ETSI are working on use cases, requirements, architecture and protocols for CDNI. However, there are several challenges still to be addressed before a CDN federation can become a reality. On technical front issues like provisioning across multiple CDN networks, consistency in configuration, change management, capacity management, consolidated reporting, billing and NOC-to-NOC fault management exist, while on the commercial side relationship management, differing regulatory regimes and simultaneous cooperation & competition need to be addressed.
Deeper CDN Integration and Virtualized CDN
An opportunity exists for deeper integration and interworking between OTT/Commercial CDNs and Telco networks. The promise is superior customer experience, more control of content and an opportunity for new business models for content delivery. However, with the number of global CDNs reaching dozens, it will be impractical and cost prohibitive to push delivery nodes from each CDN down to network nodes at access/aggregation (PoP) level. The capacity of each dedicated physical appliance will need to be dimensioned for peak traffic, the appliances will not be able to react to unforeseen traffic needs beyond their capacity and the physical appliances increase the network complexity and OPEX.
This is where Network Functions Virtualization (NFV) comes to the rescue. It will be very easy to host multiple virtualized instances (VMs) of vCDN platforms on a standard x86 based COTS (Commercial off-the-shelf) platform. Now CSPs can have superior QoE for their customers than simple CDN Collocation while utilizing resource sharing, cost efficiency and scale-out capability for unforeseen traffic. CSPs will also have the leverage to host multiple CDN services on the same infrastructure pushing out all CDNs towards the end user and freeing up significant upstream network capacity from CDN and gain the capability to offer new wholesale business models and CDN select. It is also argued that NFV could unify CDN fragmentation.
This is due to these potential benefits that ETSI has highlighted Virtual CDN as one of the major use cases of NFV and some Tier-1 Telcos have also started pushing for vCDN VM hosting rather than physical node collocation.
Principle of different vCDN cache nodes deployment in Virtualized environment (Source: ETSI)
Optimizing delivery of ever expanding content is an absolute necessity for CSPs. Multiple models and strategies exist, starting from simple transparent caching to building their own full scale CDN. However, given the volatile nature of content delivery market with increasing number of content sources, formats, protocols and device types, a more inclusive approach might be a sweet spot for CSPs to address both managed and unmanaged content types in both on-net and off-net delivery modes. Cost efficiency, resource sharing, service agility and scale-out operations are becoming extremely important components of a successful content delivery network. CSPs have an opportunity to utilize NFV to their advantage and exploit their proximity to end user by pushing the content closer, optimizing delivery costs and user-experience and also working out better content monetization models in the process.