We at AvidThink have been covering the evolution of software-defined wide are networking (SD-WAN) since its beginnings — from the time we were SDxCentral's research arm until we became independent. The promise of disaggregation and the white box universal CPE (uCPE) has always been part of the value proposition. It's been quite a few years since, and as uCPE-based SD-WANs hit the market, there are a host of new business problems.
Generation 1 SD-WAN vs Generation 2 SD-WAN
When we look at the evolution of SD-WAN deployments, particularly in the communications service provider (CSP) space, we're seeing a new generation in deployment frameworks. The first wave of SD-WAN adoption by CSPs (Gen. 1) primarily depended on proprietary appliances from the SD-WAN vendors. There were a few virtual CPE-type deployments with a thin CPE at the branch and network functions running at the central office (CO) or point-of-presence (POP.)
More recently, most of the major CSPs in the market with SD-WAN offerings are working through their request-for-proposal processes for uCPE-based solutions in Generation 2 deployments.
Generation 2 SD-WAN — lock-in prevention through uCPE
Why uCPE? Many major CSPs are trying to prevent lock-in to their previous Gen. 1 SD-WAN vendors. At the same time, the CSPs are also looking to provide additional network services through use of other virtual network functions (VNFs) from third-party vendors, and the uCPE provides an ideal platform on which to run these VNFs. While some proprietary SD-WAN platforms can support hosting third-party VNFs, most of them are biased towards providing most of the functions themselves.
As a result, CSPs all over the world are pushing to get their uCPE platforms out into the market. And it’s not a surprise that IDC has projected large numbers of uCPE and vCPE, which they classify as software running on these boxes. As I’ve shared in other blog posts, I would expect the projections this year to maybe even increase. That will fuel the software and hardware vendors in the SD-WAN space to increase their investment and capture a large slice of this presumably lucrative market.
Too many universal CPE platforms?
Readers familiar with AvidThink's past articles will know our view on uCPEs: they aren't really universal yet. Some years back a major carrier, Verizon, jumped into the uCPE white-box game with ADVA. Since then, a couple of attempts have been made at creating a standard uCPE, but we're not quite there yet.
Within the Open Compute Project (OCP), AT&T submitted edge device CPE specifications for both XGS-PON and G.fast, as well as an Open CPE specification, but that has seen limited traction. Intel is also pushing the Intel Select framework for uCPE, and leveraging partners like Advantech and Lanner.
Dell EMC, with its collection of open uCPE solutions for SD-WAN, is hoping to rally service providers as well as SD-WAN (VMware/VeloCloud and Versa are partners) and other solution providers to its platform.
And these are just a few — the ODMs, such as Advantech, Lanner, Nexcom, Silicon, Supermicro, and many more, are all jumping into the fray with their own flavor of uCPE.
Ongoing uCPE opportunities and a major challenge
Beyond the uCPE platform, many CSPs are still grappling with how to solve the NFVi (network functions virtualization infrastructure) challenges. Essentially, the uCPE platform still needs an OS, a hypervisor, and some kind of provisioning, orchestration and management framework. Most VNFs today are packaged as VMs and it will be a while before we have sufficient cloud-native network functions (CNF) packaged as containers for uCPE-based deployment.
Even if a disaggregated operating network system (DANOS) is finally released by the Linux Foundation — overdue since its promised release near the end of 2018 — it is not likely to solve the device management, cloud management, visibility, and troubleshooting issues that all uCPEs need to resolve.
This creates an opportunity for vendors like Aricent, ADVA, Enea, RAD, Telco Systems, and others to step in and provide their solutions for managing uCPEs. In some cases they will be partnering with the white box ODMs for go-to-market, and in other cases they’ll be working with CSPs and systems integrators (SIs) directly.
For the CSP intending to roll-out managed SD-WAN services, they are now faced with an integration challenge:
• uCPE hardware platform from an ODM
• uCPE OS and hypervisor from a third-party vendor (usually Linux and KVM-based)
• uCPE provisioning, management and orchestration solution from likely the same third-party vendor as the OS
• VNFs from different network solution providers.
And, for CSPs with more sophisticated deployment models where virtualized CPEs (vCPEs) can live in a CO or POP, they have to ensure that the uCPE provisioning, management, and orchestration system accommodates these vCPE-style deployments as well. While some in the industry will argue that many of the technical challenges have been resolved, and that we have uCPE deployments in some limited markets, there are still ongoing business challenges. For instance, what happens if an enterprise SD-WAN subscriber doesn't receive the promised SLA from that they were promised? Who steps in?
In recent conversations with global service providers, they've shared that this has become an executive-level conversation. When an SLA is not met, there could be a host of multiple factors contributing to that failure. As far as the enterprise is concerned, it's the CSP's responsibility. Unfortunately, many CSPs are not set up to troubleshoot beyond network connectivity.
CSPs or SIs/MSPs for the win?
CSPs either have to build up integration capabilities in-house that have firmware, hardware, OS, and virtualization talent, along with integration labs for system testing, or they will need to bring in SIs or other managed services providers (MSPs) that can assist with this.
AvidThink is hearing is a mix of opinions on how this will all play out. Some are bullish on CSPs being able to perform these tasks, while others believe this is a great opportunity for MSPs and SIs to come in and play that role. We’ve also seen situations where CSPs put pressure on upstream providers — for example, the vCPE/uCPE software platform provider, or even the ODM — to solve this problem for them.
This is a dynamic situation and a critical one to watch closely, as it will drive how the overall SD-WAN and uCPE market evolves.
Roy Chua is founder and principal at AvidThink, an independent research and advisory service formed in 2018 out of SDxCentral's research group. Prior to co-founding SDxCentral and running its research and product teams, Chua was a management consultant working with both Fortune 500 and startup technology companies on go-to-market and product consulting. As an early proponent of the software-defined infrastructure movement, Chua is a frequent speaker at technology events in the telco and cloud space and a regular contributor to major leading online publications. A graduate of UC Berkeley's electrical engineering and computer science program and MIT's Sloan School of Business, Chua has 20+ years of experience in telco and enterprise cloud computing, networking and security, including founding several Silicon Valley startups. He can be reached at [email protected]; follow him at @avidthink and @wireroy
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceTelecom staff. They do not represent the opinions of FierceTelecom.