Real Time Communications Featured Article

Service Providers and Enterprises: It's Complicated

March 16, 2015

Once upon a time, service providers delivered basic telecommunications services and enterprises did everything, from running the corporate phone system to handling all IT and data center operations.  Today, everything is on the table, with businesses tapping into the cloud for applications, servers, network security, and PBX services.  Software defined networks (SDN) and Network Function Virtualization (NFV) are bringing more to the table for both sides, enabling service providers to deliver more at a price point enterprises like.

The evolution of tasks and services service providers can now offer mirrors the many layers of advancement the Internet has delivered over the past two decades.   In the beginning, service providers were just providing dumb pipes with some basic frills.  T-1s were the standard of the day for voice services, clunky analog copper hooked into large racks to break out individual phone lines with little flexibility in configuration; none in bandwidth.

Meanwhile, bandwidth and network connections became standardized with Ethernet and IP, making it easier to link together data centers and move information.   Corporations could offer services to their customers electronically via servers, distribute those servers across the country and around the world, and even tap into services anywhere into what we now call "The cloud."

Traditional service providers, watching the explosion of services from Internet start-up companies, realized they could offer enterprises more flexible and valuable services beyond one-off customized private network and data center contracts -- due in part to the fact that enterprises were starting to buy from start-ups rather than going with the incumbent telephone company .

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At the same time, the explosion of Voice over IP (VoIP) opened up everyone's eyes to the possibilities of handling voice in software.  Each generation of commercial, off-the-shelf (COTS) hardware became increasingly more capable of handling functions that once required dedicated boxes, pushing cost down and increasing flexibility.   Service providers became capable of providing functions that once had to be done by dedicated hardware located and operated by the enterprise.

The session border controller (SBC) is the most dramatic example of how fast and quickly the world has changed. In the beginning, SBCs were huge, expensive boxes running on dedicated hardware that had to be hosted and run by either large service providers or the IT organization in an enterprise.  Over the past 5 years, SBCs have moved from dedicated hardware platforms and into all-software applications, with the application being able to run on a dedicated COTS server.  

SBCs are now offered either as a bundled service offering running on enterprise equipment and managed by the service provider remotely or totally virtualized, run as a SDN process on a service provider cloud.   Enterprises don't have to dedicated capital expense and manpower to manage IP security.  Instead, the service provider offers it on a contract, with monthly billing that also means higher annual recurring revenue for the service provider -- always a bonus to the bottom line.

NFV adds to deployment and operational flexibility for service providers and enterprises. Already CenturyLink is offering NFV orchestration capabilities that can interconnect virtual security and network functions such as firewalls, encryption, DPI, router, and DNS.  Enterprises will be able to define and create networks for themselves and their customers without having to invest in hardware, adding services delivered by SDNs, with both SDN and NFV run by the service provider.

However, it's not all roses.  Enterprises are in the process of assessing what IT and telecom functions they can virtualize and outsource.  While outsourcing can be more cost effective,  enterprises can be concerned about security and control once functions go outside of their physical control.  Service providers, meanwhile, are in the process of fully understanding and being comfortable with SDN and NFV, so there may be a lag between perceptions and production service availability. 

Edited by Stefania Viscusi

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