Networking for the Experience-First Era | Juniper Global Summit

00:07 Hi everybody.

00:08 My name is Brendan Gibbs.

00:10 I'm Vice President of Junipers Automated WAN Business.

00:12 Thanks for joining the Service Provider Session of Juniper's Global Summit.

00:16 Now I'd like to introduce Ray Mota,

00:18 who is CEO and Principal Analyst of ACG Research.

00:22 Ray's going to talk to us a little bit about what's happening today

00:25 in service provider networks.

00:27 -Thank you, Brendan, and welcome everyone to the summit.

00:31 As he mentioned, ACG focuses on service provider space, and we do a lot of

00:36 business cases from that area, and we talk to a lot of executives,

00:38 so I'm proud to be part of this event.

00:41 One of the things that I want to talk about initially is when we look at

00:45 where we're going as you can't have a discussion without talking

00:48 about where we were before in 2020.

00:51 We saw that, from a macroclimate point of view, global GDP was down about

00:55 almost 4%, but there are some great opportunities and a lot of lessons

00:59 to learn regarding simplification, automation, and how we manage

01:04 the system more efficiently because telecom allowed us to do a lot of

01:07 good things and stay communicated.

01:10 Moving forward, we see that GDP is projected to grow almost 5% in

01:15 a lot of different countries, and they're going to be moving fast.

01:18 There's going to be a lot of discretionary income and

01:21 service providers need to be prepared to handle that growth

01:24 and that speed of innovation.

01:27 As we look from a priority point of view and the challenges we see

01:31 that in 2020, the revenue was down 4%, which wasn't a surprise, right?

01:36 People were spending less, but what we're seeing is that if you stay with

01:41 the present mode of operation, doing things the way they were before,

01:45 it's going to be a challenge because capital intensity, which basically is how much

01:50 CapEx are you spending to be able to deliver this service is projected to go up

01:54 17% by 2023, which is an interesting area because that tells us that we need

02:01 to look at process in ways to challenge ourself to be able to solve that issue.

02:07 Then on top of that, what we see is ratios like OpEx divided by

02:11 revenue is continuing to go up.

02:14 That means we're spending too much finding operations to be able to

02:18 deliver that type of service, and that impacts our profitability.

02:23 Present mode of operation is not sustainable.

02:25 Doing nothing, there is a cost of doing nothing because

02:29 these metrics don't apply.

02:31 Again, I'll keep mentioning some key areas about ways

02:34 to simplify your networking.

02:36 A key way to do that, that we see is, understand what the priorities

02:41 are from the executives, and ACG meets with a lot of service provider

02:45 board levels at a bunch of different carriers from regional, national,

02:49 and global, and we're seeing from a top priority point of view is that

02:53 they're still finding challenges about creating differentiated service,

02:58 or finding ways to be innovative, but one of the key points that I hear,

03:02 especially from the CEOs is that they spend so much money in customer

03:06 acquisition costs that a top priority for them is retaining customers.

03:12 They don't want to lose that customer, but they want to get deeper and wider.

03:17 Good measure is looking at

03:19 what are your ARPU,

03:20 what additional services could you offer,

03:23 but one that ACG has been talking a lot about is what we call APPU

03:27 or APPS, which is average profit per user, or average profit per subscriber.

03:35 That's some measure that you want to look at to see is it

03:38 moving in the right direction?

03:40 Then from a goals perspective on top of innovation, the number two

03:45 area was about growing revenue.

03:47 To my surprise, it was interesting to see that number three was all

03:52 related to customer experience.

03:55 In that area, service providers need to look at that

03:58 from a board-level point of view,

04:01 customer experience, it's top of mind for a lot of these board levels.

04:05 Then the obvious ones like reducing costs, flexibility, and time to market.

04:10 What we see is that primarily the three types of priorities is that,

04:16 and don't get stuck just on one.

04:18 We see a lot of discussions when we meet with service providers, just

04:21 focusing on network agility, you need to be able to map network agility

04:26 to service agility to business agility.

04:29 When you think that mindset you're able to look at holistically in that area.

04:34 I always get the question of, "Well, how do we get there?"

04:36 Well, there needs to be a transition, there isn't just a switch you

04:40 turn on and there needs to be phases associated with that.

04:44 If we look at today, I do have discussions with a lot of these

04:47 board levels or executives, and I hear the term is we have

04:52 automation, and we have simplicity.

04:55 What I see is that there's way too many silos of automation,

04:59 they're doing way too many scripts, and these types of ways of doing it creates

05:05 redundant types service that the network is to tie to the service,

05:11 and it is inefficient, they aren't getting the benefits that they need.

05:16 I recommend that you look at a hybrid approach and then go into a

05:19 full digital service provider, where you're able to start transitioning

05:23 and putting in these new hardware applications, to be able to integrate

05:28 to the department more effectively, to be able to deliver virtualized

05:32 services in the right area but start the roadmap to digital service provider.

05:38 Ideally, the goal is and when you do this right, is that you create

05:41 what we call a borderless network, where the network is agnostic

05:47 to the service, and when you can get to that area where you're moving

05:50 CEOs to data centers, that's a transition to get more benefits.

05:55 Present mode of operation is not sustainable,

05:58 you need to create something.

06:00 Now, ACG does a tremendous amount of research and surveys associated

06:06 with automation and edge services.

06:09 Mark Mortensen and PJ on our team actually just did something recent,

06:15 and there were three areas that came out of what the

06:17 benefits were from their survey.

06:19 Initially, number one was about what we call operational costs.

06:23 It's about what we call cost optimization.

06:27 How do I look at the process that I have in place, and reduce in continuous

06:32 to do constant cost optimization?

06:35 Then the other part which was interesting is what we

06:37 call operational agility.

06:40 That says, "How long does it take for present motor operation with

06:45 the new operations to be able to deploy services much quicker?"

06:50 Then the business agility, "How do I onboard these services much quicker?"

06:55 In this survey, what they found out is that, and this is why I think it

06:59 was a surprise to me after seeing that customer experience is that 72% said

07:05 that a key driver for automation was increasing customer satisfaction,

07:11 which relates back to that ARPU question.

07:14 You spend so much money to acquire that customer, a key priority

07:18 is maintaining that customer.

07:20 Then 56% said is all about developing and creating new services much

07:26 more efficient, and 35% said it was about improving OpEx.

07:31 Process optimization is a key driver when you look at that.

07:36 On top of automation, another key area that we see is that traffic

07:41 is becoming somewhat unpredictable.

07:44 It used to be that traffic was very predictable, you could have a cloud

07:48 application connect to an end-user, and we were able to model and build

07:53 the traffic somewhat efficiently, but the reason it's becoming unpredictable

07:58 is because you have a lot of 5G devices being deployed,

08:01 you have a lot of sensors being deployed.

08:05 Those sensors and devices are being connected to the network,

08:08 which is creating an environment for this unpredictability of the traffic.

08:13 What's happening is traffic is shifting more and more

08:17 to the edge, and service providers need to have in store an environment

08:22 that addresses that shift in traffic.

08:26 As we look from a distribution point of view, we see that mobile traffic,

08:31 as well as broadband traffic, is increasing almost at a factor

08:36 of the most four in some cases.

08:38 We see that subscribers from a mobile point of view from 2020 to 2025,

08:44 are increasing to about 25 gigabits per month, and we see from a broadband

08:50 almost 1.4 terabits per month.

08:53 The edge is where all the traffic's moving, but I also say that on top of

08:59 the traffic, there's opportunities there and I think the opportunity is huge.

09:04 With a lot of service providers, they are always coming to me about,

09:06 "Ray, help us develop a business case for 5G, we don't see

09:10 the premium on the consumer side."

09:13 What we're finding is that until there's that killer application

09:17 for that consumer 5G, there's other ways to recoup and be able

09:22 to justify the spending in the 5G.

09:25 That's related to things like edge, private 5G MEC because a

09:30 lot of these verticals have a need to be able to solve this issue.

09:36 With all that spending going on, one of the top mind questions I get

09:40 is like, "I get it that I need to create an enterprise-type solution

09:46 for 5G, but how do I fit in?

09:49 What are the revenue opportunities?"

09:51 ACG created what we call a Industry 4.0 Business Architecture that's

09:56 developed into four layers and this is a complex issue, but we're

10:00 trying to simplify for you to say, "Where are you in the layers?

10:05 What areas do you want to get revenue?

10:07 What areas do you want to optimize?

10:09 What areas do you want to simplify?

10:11 What areas do you want to automate?"

10:13 If you look at Telco Cloud, which is a capacity in compute layer,

10:17 that could be a revenue area.

10:19 You look at the connectivity area regarding private and public 5G with eMBB

10:24 and all the different types of protocols connected to that area.

10:28 Then there's other layers.

10:29 What we call the edge services layer, where you have AI, machine learning,

10:34 analytics, and visualization.

10:36 Then there's an application layer, which could be video surveillance.

10:40 In some cases, service providers might have to partner and they are,

10:45 but this creates a good entry point

10:47 when you're working with your vendor to say,

10:50 "These are the areas we want to optimize.

10:52 These are the areas we're going to partner with.

10:54 These are the areas that we want to be able to develop revenue and create

10:58 a revenue and cost optimization thing and see what areas are

11:02 impacted by the edge and what areas could be impacted by automation."

11:08 With that, I'd like to kick it over to Brendan.

11:11 Brendan, back to you.

11:14 -Wow. That was a really fantastic update, Ray.

11:16 Thanks so much for giving us that insight.

11:19 Now you heard Ray directly.

11:21 What we're hearing is that applications are shifting dramatically into

11:24 the Metro ever closer to end-users.

11:27 We're seeing edge compute being stood up as essentially a distributed

11:30 data center, hosting such compelling applications such as video caching

11:34 with CDN or 5G user planes, as well as even distributed security gateways.

11:40 What we're finding is that Metro is really the hot

11:44 place to be at this point.

11:45 We're seeing what used to be a fairly static port aggregation model

11:49 in the Metro becoming a pace of dynamic change where the distributed applications

11:54 need to fundamentally have an any to any type of communication flow.

11:59 This drives new traffic patterns.

12:01 It also drives new network architectures.

12:04 One of the things that Ray's ACG Research has found is that

12:08 by 2025, we're expecting a 4X increase in bandwidth capacity

12:12 in the Metro, because of all of these distributed applications.

12:17 As a result of all this, we fundamentally believe

12:19 this becomes the new edge.

12:20 The Metro becomes the place for service launch points.

12:24 With all of that capacity, we fundamentally need a new scalable IP fabric,

12:29 net new networking platforms that have the capacity and the new

12:33 protocols to accommodate this type of any to any communication flow,

12:37 but because these are distributed services,

12:39 these Metro platforms also need to have

12:41 high degree of service intelligence.

12:44 We need to have the ability to differentially recognize and

12:47 steer all these different services to wherever they may be hosted.

12:52 One of the things you heard from Ray was that in a survey they've done of service

12:56 providers, 72% of providers polled found that what they're really most focused

13:01 on is customer satisfaction, assuring a high quality of experience for their own

13:07 users and the way they wanted to deliver those services is with automation.

13:11 72% of SPs believe that automation is key to customer satisfaction

13:16 for their own businesses.

13:18 Taken together, this is a dramatic change in the Metro environment.

13:22 Juniper has a name for this.

13:24 We call this the Cloud Metro.

13:26 What we've done is we've taken some lessons from hyper scalers who have

13:29 built some of the biggest cloud architectures in the world with massive

13:33 scalability and always-on application usage, but we've translated this with

13:38 a uniquely service provider flavor.

13:41 Now, what Cloud Metro requires and what Juniper delivers with

13:45 our new services and solutions is unprecedented capacity and architectural

13:50 flexibility for the infrastructure layer for that IP scalable fabric.

13:54 This is where we support new emerging protocols, such as EVPM,

13:59 Segment Routing, and SRv6, as well as new timing protocols to

14:03 be able to support new latency-sensitive services.

14:08 Because the whole point of this is distributed services and distributed

14:12 applications, what we need then is also the ability to have transport

14:16 slicing and slice awareness built into the entire architecture.

14:20 One of the other key metrics of this Cloud Metro is of convergence.

14:25 The idea of having a converge network architecture, whether it be

14:28 for wireline or wireless services, whether it be consumer or for business services,

14:34 all on one infrastructure, one Metro, built at massive scale,

14:39 built for distributed services.

14:40 That's a Cloud Metro.

14:43 You heard it, automation is key to making all of this work.

14:47 What Juniper has introduced is the Paragon Automation Suite for helping

14:51 simplify and automate the operational life cycle, starting from planning

14:56 and design to configuration and implementation, to ongoing operational

15:01 assurance and ultimately optimization, Paragon is the easy button for service

15:07 provider networks for the Cloud Metro.

15:10 Now, what we're doing is we're pairing best of all of this together.

15:14 We're pairing a scalable IP fabric with the Cloud Metro

15:18 new infrastructure platforms that are slice-aware and service-aware.

15:22 We're pairing those as well with the Paragon Automation Suite to deliver

15:26 end-to-end transport network slicing.

15:29 This is up to service providers to decide for themselves but a slice

15:32 could be, for example, for low latency services, compared to, say,

15:36 best-effort services or it could be to separate best-effort traffic,

15:40 internet traffic, latency-sensitive rich media.

15:44 It could be for wireline or wireless.

15:47 It could be anything that a service provider might decide.

15:50 What Juniper is offering is the tools to have the end-to-end

15:53 slicing with the application and service awareness, end-to-end

15:58 throughout the entire architecture, infrastructure and automation combined.

16:02 As I've said, part of the Cloud Metro and part of the new pace

16:06 of change for the Metro is of having new architectural tenets.

16:10 We're supporting what other provider might require,

16:13 whether it's traditional scale-up service delivery platforms or whether it's a

16:18 new scale-out architecture with new spine-leaf style class fabric designs.

16:23 Juniper has best-in-class brand new platforms to offer

16:26 for this scalable IP fabric.

16:28 From the access and the aggregation ROM with our ACX platform

16:32 to the service gateway or the service node with our MX routing platforms.

16:38 Just to summarize, what we have done is we are recognizing as we said,

16:42 that the architecture is fundamentally changing,

16:45 applications are getting distributed.

16:47 We believe providers need fundamentally change to adapt to this new normal,

16:51 to build up a new scalable IP fabric for the Cloud Metro,

16:55 to build unprecedented levels of service intelligence,

16:58 and new automation framework for

17:00 Experiencing-First Networking.

17:03 So thank you, I appreciate you listening to my session.

17:05 And I'd like to invite you to attend the next sessions for this service

17:09 provider spotlight series hosted by Andrew Vaz and Mats Nordlund.