Alex Speir: Hello and welcome to today’s presentation; “What if there were a better
class of cloud?” My name is Alex Speir and I am going to be the Moderator for today’spresentation. This presentation is being brought to you by Alcatel-Lucent. Before we
begin, please note that the slides for this presentation will be pushed to your screen
automatically. All audio will be streamed through your computer speakers. If you have
any questions today, you can enter them by clicking on the “Questions” button on the
lower part of your screen and click “Submit Question”. Your questions will be addressedat the end of this presentation.
With that said, it’s my pleasure to introduce our speaker for today’s presentation. Joiningus today is David Frattura; Senior Director of Strategy for Alcatel-Lucent’s Cloud
Solutions Enablement Group. David, welcome and thank you for joining us today, I amgoing to hand things over to you now.
7/31/2019 What if There Were a Better Class of Cloud
David Frattura: Thank you Alex. Today, we are going to be reviewing this concept
called Better Class Of Cloud, more specifically this concept of a carrier cloud. Alcatel-Lucent has been developing solutions in conjunction with our partners to enable service
providers to both offer a better class of public cloud service to their customers as well to
further enable them to exploit cloud for their own business benefit.
of a providers service deliveryinfrastructure can be positively impacted.
80%
Savings
Up to
ONE THATTRANSFORMSHOW YOU DOBUSINESS…
So to begin with, most organizations in the enterprise world have in some way share;
perform embrace cloud computing, whether they are doing it on a large scale or small
scale, they are looking at it in terms of sea change of opportunities for them to better
operate their business. CIOs started with consolidation of data centers, then they movedto services oriented approach, all with this, all this in mind with boring the cost of
operations of an IT environment.
So when you think of carrier clouds, we think of how do we leverage the same
opportunities, how do we bring to service providers the advantages that a cloud
environment can bring to any enterprise, and we are looking into the carrier context, we
see that there is an opportunity to first and foremost consolidate or transform into a fewernumber of hardware platforms, so help to save on capital expenditures and more
importantly by unifying the service provider’s operating environments around more of a
software defined context.
We see many opportunities to improve the overall operational expenditure position
generally lowering cost, both in CapEx and OpEx. Dell labs as part of the Alcatel-Lucent
cloud enablement program has done a number of comprehensive studies, opportunities to
improve costs in many areas and its shown that there is up to 80%, 80% of the providers’environment can be positively impacted by cloud.
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So what does this mean? Today service providers often are defined by a number of
products that are generally developed in a very siloed manner, so say a business serviceswide area network offer, a managed services voice software, IMS, IPTV all these
products and technologies are built, designed architected in the individual context of our
products they deployed and provisioned, is what customers again in an individual
manner. So what this means is for service provider, if I have 15 different major productsI have really 15 different engineering activities, I have 15 different support organizations,
I have 15 different OSS/BSS integration, the silos restrain the service provider’s ability to
aggressively attack the market, slow down its level of innovation and generate moresignificantly higher costs.
One major European customer of Alcatel-Lucent has shown that on average it costs themin terms of man years, 18 months worth of actual effort for a team to integrate new
products into their OSS/BSS. To put things in the terms of cloud, customers expect
things that are instantaneous and dynamic. So when Dell Labs looked at what were the
opportunities for optimization of a provider’s environment how could cloud make them
ELASTICITY IMS core utilization, typical load over the day
MULTI-TENANCY SP savings in IMS core HW by virtualization
SCALABILITY Cost of adding incremental subs
WHILE MAKING YOU MOREEFFICIENT…
Source: Bell Labs - The Value of Cloud for a Virtual Service Provider Study – October 2011
So first and foremost we looked at elasticity. Today if you have a product that is specific
to service x, and its running a 10% utilization that network infrastructure that compute
infrastructure, that 90% of unutilized operational cycles is essentially invested and wastedand then you have another product sitting right next to it that happens to be running at
90% utilization, wouldn’t it be in the ideal world better that service provider could spread
its consumption of capacity in its infrastructure across multiple domains to A; betterutilize its assets but B; ensure that there are no challenges in bringing new customers on
board or what if we could actually take excess capacity that’s not utilized and we sell it.
Find a way to monetize that asset, so maybe at night if you see here in this drawing on an
IMS core utilization, most of the day it’s actually sitting idle.
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So what if we could actually repurpose that idle time and allow the service provider tosell that asset that unused resources to customers. So for one it gives them better
productivity out of an asset and more importantly it gives them the opportunity to further
monetize an investment in areas that not that were not part of the original investment.
Scalability; many of our customers talk about the need for having solutions that scale to
potentially you know hundreds of thousands of millions of subscribers, and when they
define a scalable infrastructure often the engineering that goes into defining thatenvironment starts well before products released, often there is a significant amount of
capacity planning that goes into the effort for new product deployment, that capacity is
actually procured upfront through you know capital expenditure and that service providerthen have to hope that they will have the right number of subscribers that will consume
that plan.
They don’t, they wind up actually having excess capacity that goes unutilized or wasted
investment, or if that product takes off all of a sudden they have capacity problem. Theydon’t have enough capacity to meet customer demands and ensure customer satisfaction,
and as you see in this graph here we see you know the traditional step function. I have abig upfront investment and as long as they stay within my capital plan, I will have
enough to support my customers’ needs, but come that day when one user over my
capacity plan, I have to make another big capital expenditure.
This graph compares against the cloud model which says “I have a generic unified
infrastructure that is available for different types of services when I need it”. So I make
my upfront capital expenditure, but its spread across lots of systems, lots of services andas I need that capacity for an application or a service, I am consuming from an existing
resource form, existing hold, so I do not have this step function when I have to rollout
new resources.
Now another major important aspect of dynamic scalability is time to market. If you
need to support new subscribers it’s a lot easier to leverage a cloud model like in software
wise, expand my subscriber base by bringing up more virtualized systems and then it is toactually procure additional hardware, install it in an environment burn it in and bring it
up. So time to market in a growing region or growing market is better supported and then
there is concept of multi-tenancy.
Basically if you look at today’s model of one product, one service, one infrastructure, you
have a very nice and simple model for deploying a service but on the flip side you wind
up having like we said before maybe not as good utilization of assets. So if I can havemore and more systems leveraging in assets say IMS and IPTV and enterprise managed
voice services, all riding on the same infrastructure, I gain significant savings over a
period of time because I run on a shorter, smaller number of spares. I only have toinventory certain amount of hardware; I have fewer teams to train in terms of support. So
overall there is some significant savings because I can better leverage and utilize more
generic infrastructure.
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Source: Bell Labs - The Value of Cloud for a Virtual Service Provider Study – October 2011
Years
Months
Traditional IT
FASTER time to market
Carrier Cloud
Time to market; most service providers we talk to are constantly challenged by theamount of time it takes to bring a new product or service to market. When we think
about cloud computing, the goal of leveraging a dynamic automated infrastructure was
always simplification. So if I can leverage this generic automated environment on board,complex telecommunication services, could I also gain the benefit of faster time to
market?
So we have seen in studies that depending on the kind of environments already availableinside of the provider landscape, a very cloud oriented service assuming that you have
you know the ability to, the capability of building forward and inventorying cataloguing
it in a cloud model versus a procured dedicated model is dramatic reduction in time tomarket, even as far as up to 70% faster, and I used an analogy before the process to go
and plan the services, the capacity plan I have to have to have a business model, they
want to target. I have an engineer and then deploy after procurement, I burn it in,
assuming it’s already built into my I/O with this BSS, I am ready to start bringing onusers. A number of service providers have actually said they can take up to 12 to 18
months for a lot of their more complex services.
Well clouds, I short-circuit the resources and the installation and the procurementplanning stages, I am actually placing those assets in a cloud environment to be utilized
by lots of systems. So if I am not Greenfield but I am already an established environment
I can actually assume I will have resource capacity to handle new services and then if thatresource capacity is there, if I am choosing an existing vendor where I already understand
their technology, really the challenge for bringing out a new service is actually on
boarding it on to that cloud, having those first few say calls you know first few voicecalls connected or first few video streams delivered, but the key point is I am validating
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the software provisioning and configuration as opposed to running a whole procurement
cycle, and then depending on how your business operates, the savings can be reallydramatic in terms of the time to market and the advantage you can have entering new
markets. So time to market is the key enabler point, enabling point of cloud.
• Create new business models, revenue,and profit while increasing agility
• Transform service provider, streamlineoperations, monetize current assets
The Carrier Cloud delivers:
• New enterprise and consumer computeand communications experiences
• Broad application and real-timeapplication support
• Open, dynamic, and easy to use
So to address these challenges what is Alcatel-Lucent doing? So we have this concept of
the carrier cloud, and the carrier cloud with service provider means that it’s a cloud thatyou will be able to create new business models out of. It’s a cloud that will also allow
you to create new products to generate new revenue increasing the top line. It’s also acloud that will allow you to better monetize the existing services you have in your
inventory or your catalogue.
So what does this mean in terms of actual what is the carrier cloud? Well the carrier
cloud is a service environment that combines the aspects of networks, program ability I
mean provision you know ease of provisioning with IT systems and cloud based
orchestration automation. The idea is we can create a canvas, a framework on which youcan build new services whether its, you know the traditional, things like voice and IMS or
IPTV, or new types of services like infrastructure-as-a-service and software-as-a-service
all leveraging that same infrastructure. Its also carrier cloud because not only are we
delivering this ability to deliver lots of types of services including traditional TELCOone, but it’s also carrier cloud because it’s also designed to adhere towards additionalprinciples of any service provider carrier grade five-nine highly available.
It gives service providers the opportunity to again as we have evolved to software based
models, improves the overall operating margins and profitability by gaining more
efficiency and leveraging cloud computing to gain all the attributes we talked aboutbefore scalability, elasticity, better time to market but it also provides an opportunity for
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service provides to create differentiated cloud services, a differentiated public cloud
services by leveraging their network itself, its not just about selling infrastructure-as-a-service without serving an infrastructure-as-a-service offer that’s highly coupled todifferentiating ability of your network.
So how do we get there? So as I previously mentioned the idea of a carrier cloud is onethat combines the network with distributed cloud infrastructure. So when a service is
created, no cloud service can get to a customer without a network, so the first and
foremost the network is the cloud.
Now if I look at development of a platform that can handle both IT Services as well as
you know traditional TELCO or cable operator or mobile operator services, it needs to be
one with the environment, the management the provisioning, the OSS/BSS environment,understands the whole framework and could then develop a service environment that
combines all aspects of the networking clouds. So what does this give in terms of
attributes? Well it gives us dynamic capacity. When we talk about cloud assets or
computing assets or IT assets, we think of cloud as data centers that maybe centralizedbut it could be fully distributed. So capacity is put out throughout your environment and
it could be utilized both on the network side and the compute infrastructure side to meet
the demands of complex applications.
Resiliency; how a distributed frameworks or environments are inherently resilient and
leveraging traditional carrier type methodologies, whether its network or I should say
network high availability in conjunction with high performance, highly availablecompute, faith of platform for five-nines capabilities, things like service or governance
and security are inherent in the system where all components of a communication flow
are controlled. So in the case of a business services operator, that’s offering an IP/MPLS
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service, I can control that communications from the customer’s premises right up to the
working machine.
If I look at offering services I can adhere to the strictest government legislative mandates.
It requires one that would have completely controlled end to end. Now this framework to
give you these characteristics, the capacity, convergence, resiliency and then of coursegovernance and security requires systems that will be based on agility, reliability and
transformative ability. So what we are doing at Alcatel-Lucent is focusing on how to
make this network and cloud compute environment come together a holistically operateas a single system with general attributes that will promote both the creation of new
services, as well as the refinement of existing services.
So some differences and comparisons; so the term cloud, generally you know overuse
there is lots of different types of cloud. So when we think about conventional cloud here,
could be the private cloud an enterprise operates or it could say a public cloud service.
Today there is a number of Internet type providers that have large scale data centers thatthey provide services over. So when we think of conventional cloud, we think of those
large centralized environments, they generally don’t exploit things like distribution.
They are limited to compute, so Alcatel-Lucent in terms cloud node really equals the data
center or compute environment.
The performance is constrained generally by the physical capacity in and out of an
environment. So a large data center that happens to be operating in Montana has only asmuch capacity for most customers as what can come in and out. So you are trunks into
that site are constrained and then from the availability point of view, what we can do
things inside the same data center to create availability zones and security zones, but
again its still the same physical environment. It doesn’t provide for you know the highest
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level the physical availability and then sometimes depending on you know what kind of
provider you are looking at, there is also this concept of IT services that are very basic, its just another service.
When we think about the carrier cloud on the other hand we believe that service
providers can take advantage of this concept of distribution. So in some returns if someone say well its always easier for lower cost operated single data center with a
smaller team. On the flip side this idea as a service provider has generally a large
footprint of our central offices, head ins, you know point of presence environments.Most of these environments in and themselves are data centric grade and have lot of
capacity that could be physically exploited, highly distributed provides a couple of
different advantages.
One is you have you know better management of your back wall, you don’t have to moveeverything to a single data center that happens to be in Montana, if you have a calling
region or service region that spans the entire United States. It also provides an
opportunity to provide differentiated services by being able to coalesce services close toyour customers.
When we think of a carrier cloud, as I mentioned previously we also talked about thecloud and the network being integral to each other. So a carrier cloud is a network and a
cloud computing environment brought together to be able to deliver a combined service
of both compute and network, or an environment when you are operating real timetelecommunications applications, you really need high coupling with the network
applications that may have a few milliseconds latency requirement from point A to point
B, you can’t just do it on the best ever Internet type model, you need to environment that
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actually can guarantee SLAs, whether they are external or internal, so the network is a
key fundamental component of this carrier cloud concept.
End-to-end SLAs provide public service, public cloud customers the opportunity to
leverage cloud computing services is really appealing and a lot of these cloud operators
can offer SLAs in their data centers. So if you want to put your virtual machines in yourERP software in a data center, I as the data center operate guarantee an SLA up to my
door and then you the customer, well there is a couple of providers of Internet or let’s say
networking services that you can leverage or call upon and then they can build you anSLA. You as the customer though what you really concerned about is that ERP system
operating in that cloud environment.
So for carrier grade cloud, the carrier cloud the opportunity is they have a service
provider to have SLAs that are compound or unify all the aspects of what an enterprise
needs to run a service, and so the enterprise is service equals ERP. Its one of the bunch
of the different computers and maybe couple of different data centers for disaster
recovery link to that enterprises offices and locations via a five nine fully resilient MPLSservice network, and so your SLA of the CIO is composite, its encompassing everything
that partner of yours can actually provide.
There is no finger pointing, there is no call service provider A if you are having a
problem with something operating in service provider B data center, no finger pointingone that is strangle and for a customer has a lot of appeal and then actually a carrier cloud
should not just be about selling infrastructures-as-a-services as SaaS or software-as-a-
service, but it should be a vehicle for the service provider to reliably evolve the way it
runs its service environment or deploys new services and technologies in an environment
now that’s actually a canvas for running multiple systems in parallel. It should be able toallow a service provider to knock down walls between businesses. It should be able to
give the provider agility, to bring new services to market and most importantly its one
that will be as robust, the operators your bolder legacy systems that will havedramatically better cost in terms of operation.
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So what is Alcatel-Lucent doing to bring this vision to reality? So we are focused on
development of cloud orchestration and automation systems that can dynamically controlnetworks and data centers of all types and simultaneously on board complex
telecommunication systems, we call this virtual TELCO instead of thinking about today
buying IPTV on dedicated hardware what if it was purely software and it can go on acloud that was designed to be five nines and carrier grade, simultaneously I can also on
that same platform offer you know traditional cloud services.
So we also look at cloud as improvement on overall time to market. So if you think
about building a platform that makes this network and cloud computing environment
operating together seamlessly, and we know we can have on board different types of applications, whether its traditional IT or complex telecommunications applications,
could this environment also become a, could we make this environment one that is
further enables service provider to create new services that leverage aspects of different
types of services which say maybe silent, can they bring together different technologies,different products and different offers to create new types of services that have never
been seen before?
Think about the speed at which the Internet providers come up with new service offers.Well if I could again break down those walls between different groups I could cross
pollinate ideas of service concepts, push that out into an environment that physically from
a CapEx expenditure point of view is already there, you already mean investments in datacenters and compute and network technology, evaluate it where I physically evaluate
when the technology works or actually innovate more simply focus on how do I test the
new service in some test markets. If I have to go out and build a big CapEx expands orplan for big CapEx expands in installation, burn it in an operation just to test project x in
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a region that time that the way that it takes you to stand up in an environment for just the
evaluation of a test concept is a significant way in terms of time to market and moreimportantly forces capital expenditure for an idea that may not pan out.
So the idea of coming up with an idea across different silos, being able to test on a single
environment that already probably exist has you know significant advantage because youcan tell relatively quickly whether it would work, what’s your take right and once you
know that its got a good take rate you can hit the full launch button and then start rolling
you out on other regions, because you have already built on a standard framework and astandards software environment that happens to run on a standard compute, and network
platform that the provider already has in most of its regions. So the time to market for
So the carrier cloud is also one about end-to-end quality of service. Now today quality of
service or quality of experience are usually defined based on the narrow silos of the
individual function that make up an environment. So an example before I talked aboutenterprise who has pushed an ERP system into a cloud computing environment. Quality
of service metrics or guarantees is usually siloed into each area while I am interacting
with different department in a service provider or I am interacting with different service
providers. For an enterprise or for even a service provider consuming its own resources,the idea that a service stops at different boundaries really is not with that customer wants.
It wants to have the end-to-end experience. It cares about running of the ERP system,
you run; it cares about ensuring that his IMS environment is there just for his customer.
So carrier clouds are ones that link inherently you know quality of service metrics across
multiple technology domains. So the customer role has a quality of experience or qualityof service characteristic for the service that matters in the case of IT organization or the
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ERP system, not the individual silos and the quality of service commitment on the
IP/MPLS circuit and the quality of experience requirement on the first mail broadbandGPON environment, and I also have another data centric quality of service experience for
me on the CIM, my quality of experience is defined by my customers using that service
that’s my enterprise end users and it should be from edge to data center virtual data
center. That should be one environment because that’s what I care about.
So understanding some of these concepts we wanted to go out there and validate whether
these you know technical and strategy visions that we have developed at Alcatel-Lucentreally would resonate with customers. So we actually invested in pretty comprehensive
study of IT decision makers and their buying criteria, their concerns and challenges about
how they would look at cloud-based systems. So the idea was we went through 33,700plus enterprises ranging from the mid size business, say 100 something users up to the
very largest Fortune 100 or Global 500 type companies, companies with tens of
thousands of employees and oh yes then were you know questions around “What would
really drive you to adopt cloud computing?” They all, all CIOs look at cloud computing
as a great opportunity to you know minimize costs, add agility to what they do and bringout these services for their end users but they all have concerns.
Source: Alcatel-LucentGlobal Cloud IT Decision Maker Study | September 2011
ENTERPRISEIS READY FOR THE CARRIER CLOUD…
AT THE TOP OF IT DECISION MAKER CONCERNS
Performance Data Security Ease of Use Cost
So in the slide we talk about you know what are the biggest concerns of IT decisionmakers when they look at cloud systems and this is public cloud systems and their
willingness to adopt could be that infer from it, so as we see here you know security is
always a front end sensor issue for any IT organization and you know adjacently, they arerisk management department you know they all look at what is it you know by not have
absolute control, and so security is always up there but actually interestingly when you
look at the sub components of this concept or performance, actually overall all thingsrequired for good customer experience actually generally average higher as a concern
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than security and so performance of things is simple as, “Will my end user who used to
have that server sitting inside of the data center in the building he works still have thesame quality of experience you know the experience that users used to you know go
away?” What about overall performance from server to server, how do I ensure high
availability because performance degradation through failures is just as bigger concern?
So in general this idea of public clouds with lesser degrees of guarantee performance
quality of service, availability generally lead to low overall performance and for the
customer, their concern is again always governed by that end user you know CIO’s enduser will they have the same quality of experience or performances front and foremost in
their minds?
Now if we think about a service provider, service provider controls that network control
the data center they can build them out. It could also put data centers throughout their
physical infrastructure. So instead of having data center in Montana servicing a customer
in Miami, Florida, from a service provider that happens to have a point of presence in say
Tampa Bay, St. Petersburg maybe I may make that available to my customers in thatregion. So the latency to go couple of hundred miles is dramatically lower than the
latency to go a few thousand miles, and that latency actually translates into customerexperience. So again there is a benefit to having performance as a key concerns of IT
decision makers because its one that service providers can exploit because they have
control over the entire experience from the data center all the way through the network.
Source: Alcatel-LucentGlobal Cloud IT Decision Maker Study | September 2011
ENTERPRISEIS READY FOR THE CARRIER CLOUD…
AT THE TOP OF IT DECISION MAKER CONCERNS
Performance Data Security Ease of Use Cost
We took this idea of you know key concerns then asked another question which said.
“Would you be willing to pay more for a public cloud service from carrier or serviceprovider, I should say communication service provider versus what you would pay for
any of the public cloud service offers out there in the market?” So of course customers
always wants you know better performance, better high availability better… you know
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overall experience but they are generally not willing to pay more for that general you
know that plain vanilla virtual machine that cost to infrastructure-as-a-service offer.
So in reality you can’t charge more, so you still have to have the same you know
economies to scale and the ability to have a cost effective compute virtualization
environment, but when you ask the question will you pay more for things like latencyguarantees, availability of bandwidth, rapid VM installation where you can basically on
board from your data center into a service provider environment maybe even you know
that entails having dynamic bandwidth contracts to open big pricing copy the data into
the provider’s data center, all these attributes become attributes customers want and theyare willing to pay for you know willing to pay for more.
So what we have seen is the carrier has, the communication carrier has a far greater
revenue potential than just selling virtual machines. They, we in the study we saw up to
ten times more revenue significant, significant advantage and then in general when you
ask these customers you know which is the more appealing environment, one that’s just
the virtual machines or one that is environment that combines the network, combines thesingle point of support, combines the network attributes like low latency and high
bandwidth they are starting to generally many multiple more appealing to them to
procure that kind of service in today’s over the top you know Internet delivered nonguaranteed services.
DEVELOP ANDDEPLOY DIFFERENTIATEDSERVICES THAT ATTRACT
CUSTOMER LOYALTY
Source: Nielsen, Citi Investment Research and Analysis, comScore, IHS Screen Digest, eMarketer, Crunchbase, Apple, Hulu
Annual Revenue for Online Content and Conversation Providers
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So one of the things that’s also a key point about carrier cloud is this idea of attracting
customer loyalty. So if you can define a service that is fully available all the time, it hascharacteristics that cannot be displaced, things like having more latency because of
network proximity, or because they have bundled it in with my IP/MPLS service or I
have the ability of dynamic bandwidth to control that first mail regional access. For acustomer enterprise customer the ability to you know find the value from this kind of
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environment versus over the top environment it most certainly creates a stickiness and
just something others can’t give you know attritional cloud service provider cannot offer the level of services that a network service provider can.
Additionally, if you combine services, so your IP/MPLS service becomes a vehicle to
deliver, also data center services and so that data center services right on the backbone of that enterprise customer because its running a nail wind. Again you know less likelihood
to find a reason to leave that provider because you always give a more secure and better
level of service for the connectivity of your virtual data center, if you are coming in overyour core corporate backbone as opposed to over the Internet.
So turning back to this concept that the network makes the cloud, I talked about conceptsalready of distribution and that the cloud needs to have a high control with the network or
I should say be tightly coupled with the network to give you the service provider the
ability to more, to with more agility bring on new services, leverage your historical skills
and engineering very highly reliable systems to both offer a new kind of cloud servicethat is end-to-end, to customers looking for public cloud as well as leveraging
technologies and methodologies that you used to engineer your services on a more
broader scale, so taking that engineered IMS service paradigm, applying it to a cloud
environment where that IMS function now lives you know this carrier cloud has to takeaccount all the aspects of what it takes to operate its service. So again reliability is again
key attribute of what the network linkage to cloud provides.
Then lastly the transformative; you know as you move from dedicated systems to
software definable systems, systems that are more agile and they are provisioned,
provision, the ability to provision or agile in the way that they actually can test in yourregions, I create new avenues and new opportunities to create new business models that
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didn’t exist before. So longer about procuring you know significant enough environment
to handle ex-millions of subscribers is now an environment where maybe I basically planto have some high margin, high value of services in a region where it makes sense, but
not necessarily have to build a global you know environment to get economy as a scale.
Also from a transformative perspective, one customer talked about one of the big Internetproviders, and they talked about the way they operate the network, they talked about
having 1000 that Internet base provider with that searches, they have roughly 1000
devices in spares inventory, this wireless operator has 40,000 spare devices andinventory. So now the opportunity is not even just to transform the way you self services,
in the way you operate services from general perception or it’s the general model, but its
also transformative in actually how the way in the way you maintain your environments,troubleshoot your environments interact with your providers. The cloud becomes the
network to cloud and because of that high connection, you reinforce its ability about
agility to bring services to market that are highly reliable that delight your customers and
transform your operational models to maximize your profitability.
So Alcatel-Lucent what are we doing to actually make this real? So Alcatel-Lucent isdeveloping software systems and technologies that will enable this unified networking
cloud infrastructure. Alcatel-Lucent is also developing computing blue prints, so it’s
computing storage systems that are optimal for deployment in service providerenvironment. Alcatel-Lucent is well knows as a company that builds network
communications equipment. So exploiting new functionality and features in hardware
infrastructure elements that are optimizing the cloud services delivery, as well as building
software tools that allow us to evolve our traditional services products and move theminto a cloud environment as well as enable service providers to bring in any new
technology whether its you know CRM-as-a-service, UC-as-a-service, the infrastructure-
as-a-service, and leverage that same infrastructure that delivers a voice service and of
IPTV service as one that delivers say the next generation CRM-as-a-service or office in abox.
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There is architecture we call cloud band and cloud band has as I said before a couple of
key elements. The first one is this cloud band management system. It’s a multi cloud
orchestration system one that’s designed to interact with lots of different IT infrastructureenvironments whether its open stack, whether its cloud stack, whether its working with
HP and cloud system service provider, its one that’s designed to understand the resourcesthat are available on a distributed service provider environment, composed of different
types of systems and one that also knows what an IP/MPLS infrastructure is, what is a
photonic infrastructure, how do I link those services together.
7/31/2019 What if There Were a Better Class of Cloud
• Integrated cloud hardware andsoftware designed for serviceproviders distributed cloud
• North bound API with the cloudmanagement system
• Delivered in predefined form factors(small, medium, large)
• Different packaging from rack-mounted servers to fully validatedshippable containers
BASIC CLOUDBUILDING
BLOCK
• Pre-integrated, mounted, testedbefore delivery
• Using 3rd party available cloud stacks
• Network equipment
• A logical cloud node that can be inany existing cloud outside the serviceprovider (e.g. Amazon)
The cloud node; we recognize that service providers have large IT organizations that are
very skillful in building cloud systems or it’s the computing systems. They alsorecognize though that there is place for loop prints that opt or are optimal for
deployments in non traditional IT data centers, think of the special challenges related todeploying IT infrastructure systems in a central office. You may not have fully, I should
say, fully certified IT support personnel or personnel that you probably have to from
traditional TELECOM personnel.
So the idea with the cloud band know it is that come up with blue prints that create and
optimal footprint for optimal revenue generation based on that idea before that your
customers don’t want to pay more than they would pay for the over the top providers. Sohow can you have economy to scale on the cost effective, but at the same time greatly
reduce the complexity of rolling out a system in a non traditional environment, things like
self commissioning putting a node into a central office, plugging it into the network,
plugging in the power, plugging in USB key that happens to contain the baseconfiguration and then allowing the system to auto mission over you know few hours
what would take many IP providers leak switch service consultants time operating in the
region we are trying to focus on how do we streamline this process so that takes hours
with minimal IT consulting or service support.
So at this point I would like to summarize what we talked about so far and why Alcatel-
Lucent leaves the carrier cloud offering significant advantages to carriers and theircustomers. So we talked about this dual ability to leverage cloud for dual benefits. One
is the transformative effect of cloud, the ability to see the evolution of traditional systems,
traditional service systems evolving to offer the same types of services, but in a new agilebetter utilized software definable environment, the private cloud as a carrier and then we
7/31/2019 What if There Were a Better Class of Cloud
also talked about this idea that cloud can offer differentiated value for a carrier when it
offers that service that combines both public cloud infrastructure elements that customersare willing to pay a specific amount for with the network that creates differentiated
performance guarantees and security guarantees.
So this idea of cloud being able to basically fix or improve the bottom line by makingyour operations more productive and efficient while at the same time creating a new top
line benefit by creating new differentiable products, we believe that carrier cloud offers to
service providers a significant opportunity across all areas of their business become morecompetitive in the market. To achieve this, Alcatel-Lucent believes in this concept of a
carrier cloud which is one that has highly coupled the network operations with the
compute and storage IT infrastructure availing for a service provider offer compoundservices and systems, one where there is no wall between different organizations, one
where a high availability five nines SLA can be defined all the way from the virtual
machine running in a data center all the way to a customer’s premise where that
customer’s demark is located, and this creates you know multitude of advantages for the
service provider both in differentiation as well as in the ability to offer new services.
To achieve these things we talked about what’s cloud bands, the portfolio is inside of Alcatel-Lucent cloud band is focused on enabling both of these double benefits that the
social provider can receive and enabling these operators, service providers to maximize
their overall ability to bring new products to market quickly. We define solutions tosimplify the chore of running and developing a new cloud and most importantly provide a
tight linkage between the network and the cloud to allow providers to innovate and come
up with new solutions on their own at a pace that is competitive with the market they are
in and with that, I like to pass it back to Alex, thank you very much.
Alex Speir: Thanks David. I would like to take this time to remind everyone that you
are participating in the presentation; “What if there were a better class of cloud?” brought
to you buy Alcatel-Lucent. We are now going to move on to the Question & Answer
portion of today’s presentation. You can answer your questions by clicking on the “Ask a question’s” box in the lower left hand, lower right hand corner of your screen and click
“Submit”. We will respond to as many as time allows. So I already see a few come in, Iwill just go with the first one off the top head. This person asks; why does the enterprise
need carrier grade cloud services?
David Frattura: So Alcatel-Lucent has always believed that the cloud opportunity
would be significantly greater if enterprises could have an environment that loses up to
what they are already used to in terms of how they interact with service providers. Today
the wide area network is five nine service most enterprises you know take advantage of that five nines environment is the life blood or the nervous system of these companies
without that they can operate. So as you look at the opportunity for enterprises to
leverage public cloud services what we see is a disconnect between what is generallyoffered out there by the Internet class companies and what companies or CIOs are used to
in terms of how they consume service provider based services. We went out and did the
study that I mentioned before that validated that some of their key concerns about
7/31/2019 What if There Were a Better Class of Cloud
adoption of cloud based on things like security, high availability, overall performance and
these inhibitors are really impeding their ability to consume public cloud services.
So the need is there, the desire is there, all CIOs have pressure from their CFOs about
saving money, lowering costs, they are giving more, creating more positive support for
the business. So if the need there but the environment is not really capable of meetingtheir requirements, they don’t take advantage of. So we believe that the carrier grade
cloud is absolutely in need by enterprises because most of them definitely have a
financial incentive to leverage cloud computing but they are, have a risk adverse and if that, if those risks were mitigated through a carrier grade type model which has already
improved in the wide area, products that have been offered you know all throughout the
world enterprises more certainly would gain the benefit of leveraging sharedinfrastructure while at the same time be assured that the services they put out in the
environment maintain the same level of quality experience and availability that they have
in their own environment.
Alex Speir: Great thank you. Someone else writes into, what is the advantage of this,does the communication service provider have that can be leveraged to support superior
cloud services?
David Frattura: Okay. So earlier in the presentation we described this concept of
distribution that most certainly is one. Usually I use example of a big Internet data centerin North America. So say you are in Silicon Valley or the Bay area and you are servicing
customers all throughout the United States, depending on the kind of application, you
wind up with potentially significant latency issues or bandwidth issues. So service
provider, servicing a customer in Miami who has to access his data in the Bay Areawould find that maybe the performance of that application is not particularly good, if its
an Infrastructure-As-A-Service to offer most certainly that cost of bandwidth would be a
big inhibitor for the customers to take advantage of the environment.
So have a communication service provider that happens to have you know very well
distributed footprints, and I can put service environment close to where my big markets
are, I can most certainly have differentiation ability by exploiting latency. It’s a lot easier to service a New York City customer from a central office or a mini data center in a pop
in New Jersey than it would be across the country. I can also exploit the fact that I have
lots of bandwidth in regions and I can sell it for dynamic access.
So again the service provider’s you know strength is you know distribution and the
network and the way they can exploit the network whether its better dynamic bandwidth,
lower latency guarantees and five-nines we will create you know superior advantage forthat service provider over providers that have static environments that are centrally
located and that are bandwidth resource constraint.
Alex Speir: Excellent and I see a few more questions coming in, maybe we should take a
couple more. This one asks; what types of differentiated cloud services can the service
provider offer through the carrier cloud?
7/31/2019 What if There Were a Better Class of Cloud
David Frattura: Okay. So this definitely builds on that last question. We talked a lotabout latency and dynamic bandwidth before. I think if you look at the landscape or
potential differentiation you actually quite a few but let’s start of with the basic mundane
one which is, you know differentiation to single cloud network infrastructure would
allow me to have bundle services. So me as a service provider could offer singleenvironment, single support organization, an SLA that is composite, that overlays both of
the service that are being offered. I can offer enterprises low latency services, so if I am a
New York City financial institution and I wanted to do financial simulation I could offera low latency service that says I will allow you to point or provide, I will provide you
compute assets that will meet you know very structured and fixed low latency guarantee.
If I am in Europe or in regions where there is an obligation for geo-fencing where you
can say data lives only in this region, it can’t be exploited outside of here because theservice provider has control of where traffic or communications traffic is allowed to flow,
it can even control actually where that data gets to go even within the business and then
you know there is lots of other things like bandwidth on demand the ability to allow sayseasonal need to be supported beyond the average. So if I think about Christmastime in
the United States retailers may need more network capacity and more data centercapacity for what is essentially three months of the year and the rest of the year its pretty
much quite time.
Service provider could actually allow for dynamic bandwidth during those times of the
year that operators such as you know Internet based ones would not be able to allow
because you have to have a separate contract with different service providers to get that
bandwidth. So again a lot of the advantages will come through the exploitation of theirnetworks and if you can couple the systems together to create blended services with
single points of contact, with single support organizations and single SLA, you will have,
you will cover the spectrum of opportunities for differentiation versus single product
offer companies like Internet based cloud service providers.
Alex Speir: So why should a service provider look to Alcatel-Lucent for help with their
cloud strategy?
David Frattura: So Alcatel-Lucent has a wide array of capabilities to enable service
providers to bring to market, an advanced cloud service environment. Traditionally manywould focus on the IT type providers to you know well known and have lots of skills in
terms of bringing together compute applications and storage. We also could look at
things like OSS and BSS providers and they had to bring together different types of
provisioning in management frameworks and there is networking vendors course fornetworking and service, network switches and routers. Alcatel-Lucent combines all those
attributes. We have the ability to provide a top down infrastructure that allows you to
build any type of network that is anywhere capable of delivering services. It’s like guys I
need to redo this question because I didn’t actually expect this one. So let me think aboutthis…
7/31/2019 What if There Were a Better Class of Cloud
Alex Speir: Do you want to answer this question or do you want to answer a different
question? I think they have, we are about an hour into it so don’t want to ask too manymore questions?
David Frattura: We are 59 minutes, I don’t have easy answer of the top of my head andthis one just could go really long. I could talk about my specific products but then that
doesn’t address Alcatel-Lucent, so I would rather actually probably skip this question.
Alex Speir: Great and we can do that which other question would you want to answer?
David Frattura: Customer shift transitioning cloud actually what are all the bigger
challenges services providers face in moving their service delivery environments and
operations to cloud, I should say enterprise service grade, move out to the first four.Actually how about; what kind of, what kind of internal optimization and cost savings
can a service provider achieve through the implementation of carrier cloud across theirown businesses? Now I can answer this and I actually want to put up a slide that’s not onthis one. Yes I have which gives me details on this.
Alex Speir: Okay.
David Frattura: So I can actually read some stats you know off the top of my head.
Alex Speir: Do you want to ask or answer this question and then another if you want to
me ask like that and about that question.
David Frattura: Let’s ask; let’s go on this question because this I think we are supposed
to sit now for an hour right so…
Alex Speir: Roughly I mean there is no hard stop where it could go actually it’s only aquestion of how long will people stay engaged.
David Frattura: Yes. So Cindy are you there, you have been on mute or did you hangup?
Cindy: Yeah I am here, I am here.
David Frattura: Yeah and actually got to bring up the Dell Lab Study and I am just
going to quote some numbers off of this one.
Cindy: Okay that’s fine.
David Frattura: Okay.
7/31/2019 What if There Were a Better Class of Cloud
David Frattura: And let me just put that up, okay. So the question was, what kind of
benefits and savings right?
Alex Speir: What kind of internal optimization cost savings?
David Frattura: What kind of internal optimization cost savings in a service provider,okay good?
Alex Speir: Okay so I am going to ask this as this is the last question.
David Frattura: Okay.
Alex Speir: Great. What kind of internal optimization and cost savings can a service
provider achieve through the implementation of carrier cloud across their own business?
David Frattura: So the savings will vary slightly from type of service provider whetheryou are a quad play large operator or MSL or mobile operator. What we have generally
seen on average as I mentioned earlier in the presentation was that there was at least 80%
impact and what that means is of the environment that makes up a service providerenvironment which includes the operational as well as the capital expenditure side, 80%
of that investment could be positively impacted through the use of cloud.
So from that what do we really derive in terms of cost savings? So we see on average onthe operational side, we certainly use more than the capital expenditure side. On the
OpEx side we see anywhere from 50% to 60% of that operators expenses being impacted
positively by cloud and on the network side even up to 70% as we evolved from
hardware only platforms to in the future down the road we will see more and moreproducts become software.
So what does this give you in terms of real world savings you know like the virtualizationas example of customer premise equipments and CPEs or set-top boxes could yield 30%
savings. The investment in capital or incremental capital investment to adding
subscribers I used that example before of step function where I basically go through myfirst invested environment for say x amount of subscribers have to do big CapEx expense
that I can go around involve, do leveraging cloud you are into flattening out that
investment that investment window and overall because you are using the same
infrastructure that’s leveraged by lots of different products, you get better productivitywhich will role helps to reduce the overall cost of adding new subscribers. You can add
subscribers based on the actual number not big step functions in terms of you know large
hardware to support the next phase.
In terms of maintenance, you know depending on how your partners provide maintenance
contracts on systems, you can see reduction just in maintenance charges because
7/31/2019 What if There Were a Better Class of Cloud
obviously if you are going away from you know large model with the hardware systems
to software based systems you will see a reduction in terms of the maintenance charges toget hardware because you will have less hardware types, but then even additionally their
savings you have seen up to 45% in the reduction of you know the operations and support
of an existing infrastructure, things like spares fewer number of spares, more educated
workforce you know fewer number of components in the hardware inventory means youget to consolidate your core organization.
We have also seen that you can have significant savings in terms of just overalloperations of you know data center. So by moving away from just IT silo to a cloud
environment that provides both the internal IT or virtual provider environment the virtual
TELCO environment and the environment that can also deliver cloud services byconsolidation we have seen even your IT data center operations can be reduced by 40%
and then overall you know there is things beyond savings.
So we think about time to market increased market share because the ability to enter
market is significantly increased or the ability to delight a customer by being able to scaleup more quickly when they need to increase their overall demand on your environment
those are harder to measure but they will you know they all are recognizable facts thatyou know customer to actually translates in the customer satisfaction which translates
into you know customer stickiness and the ability to get into a market before another
customer because you have you know all these things we talked about before savings,dynamic environment, automation means that you are actually prepared to enter markets
more quickly when your services and you know the first vendor that enters the market
usually is the one that retains the most market share. So it’s more than just cost savings,
its actually its also the opportunity to grow market share and grow customer seize that.
Alex Speir: Great. That ends our Question & Answer time. I would like to thank
today’s speaker David Frattura for taking the time to join us today, and I would also
like to thank today’s sponsor Alcatel-Lucent for making this event possible and as alwaysthank you the audience for taking time to join us. This is Alex Speir, have a great day.
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