Test and Assurance incumbents Netscout, Keysight Technologies, Viavi, Spirent, and EXFO are adapting their business models
The cloudification of the network is a disruptive force across the entire network supply chain and lifecycle. It promises to deliver enormous economies of scale, yet at the same time it will force many network engineers and operations staff to rethink how to test and assure the new services in the future communication infrastructure.
The decline in the traditional market for hardware-based network probes is set to continue. But operators still have a strong need for network test and assurance – albeit against a new kind of infrastructure.
A Transformed Market
The largest segment of the service assurance market is being transformed today. The traditional network probe market has been and continues to be in decline. The market forces in play will disrupt both active and passive probe markets. These include:
- Specialty hardware-based appliances are being substituted for Intel based Xeon processor platforms driven by network virtualization and cloud technologies.
- Workloads are being componentized and distributed to provide more resiliency and flexibility. Network functions can be run as virtual machines or as micro services in containers.
- Software controlled network lowers both capital and operational cost. This is achieved because management, control, and security can be deployed across multiple clouds. Service activation and adjustments to capacity demands can be made in seconds not weeks or months. This is the case with SD-WAN which acts as the overlay technology to other legacy network technologies unifying the management and security layer.
- Collaboration in the commercial market. Intel, VMWare, RedHat, Microsoft, Amazon, IBM, and others have expanded their partner ecosystem. This along with the adoption of Opensource is accelerating the pace of innovation and reducing the service integration tax.
- Processor constraints required to collect traffic or port mirror have improved. Network optimization using SR-IOV and PCI passthrough lower total deployment cost for monitoring and provide vast improvements in easily adding, moving, or changing the source of data collection.
Cloudification of the network is changing how testing and assurance is deployed. For example, fixed dedicated tap points are no longer necessary.
Processor performance, and techniques such as SR-IOV, enable CSPs to source cheaper options compared to traditional incumbent suppliers. Some of this capability is being offered, with no incremental add-on fees, from virtual EPC and infrastructure suppliers.
The virtualization of the network is shifting unit sales from hardware centric to software centric. Hardware unit sales generate higher top line revenue compared to software only unit sales. Software sales also require a more sophisticated marketing and selling method. It is a more complex sale that brings with it a more consultative selling methodology.
CSP budgets are being reallocated towards data insights and analysis. The total available spending on testing and monitoring is shifting away from data acquisition. A higher percentage of total investment is being allocated towards deeper operational insights which include AI, machine learning, and intelligent automation.
Rethinking Assurance in the Telco Cloud
The cloudification of the network will force most CSPs to assess current tools and processes to achieve the benefits of cloud scaling. Agile service delivery and assurance (Rapid Automated Service Assurance or “RASA”) radically changes how services are tested and assured as workloads become more distributed.
Workloads will move dynamically to support demand scaling in/out in shorter timeframes which obviates the need for planned deployment of dedicated fixed monitoring points, and in fact makes it impossible to locate such points except in conjunction with workload LCM.
Virtual probes will move with workloads at the edge closer to the UE and access points. Edge computing and the distribution of workloads will require more network visibility for service assurance and customer impact analysis.
Adapting for Growth
The incumbent vendors in this market are adapting their business models to address this radical change. In part, this means a shift in execution from hardware sales to less-familiar (and more complex) software sales and marketing. But it also requires an understanding of how the telco cloud changes the nature of test and assurance.
On a technical level, customers are embracing the cloud in different forms: hybrid datacenters, edge cloud compute and increasingly cloudification of the RAN. The ability to move workloads in real-time from the enterprise to the cloud require assuring that cloud-native services they deliver function flawlessly. What this demands is the ability to rapidly scale out active agents and capture data in real time.
The fundamental objectives within the probe and assurance market are unchanged. Successful vendor strategies will still be rooted in helping service providers improve visibility of customer impact across the service and network layer. However, the suppliers that can collect, analyze, and provide actionable insights in any cloud – Azure, VMWare, AWS, Google Cloud and IBM Cloud for Telecom – raise the stakes in a winner-take-all billion-dollar market.
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