Lesson 5: Cost, Agility and Velocity

Lesson 5: Cost, Agility and Velocity

Server virtualization gained interest as a way to optimize costs. The processing capacity of servers had grown to a point where it was common to see very low utilization levels. Thus, there was enough processing available to add a hypervisor and run multiple workloads on a single server. IT departments could point to better server utilization and show actual savings. This extended to other savings as well. Doing the same with fewer servers means lower energy costs and a smaller data center footprint.
Lower cost makes it easy to build a business case – who doesn’t like saving money? In hindsight, enterprises saw key benefits from server virtualization that went substantially beyond cost-saving. One of the most important was that virtualization greater enhanced agility. Previously, IT would have to provision a server before they could bring up a new application. This was a time-consuming process and expensive process as well as a cause for frustration from the business unit that needed the application. With virtualization, the process was greatly simplified, and IT departments became much more responsive to the needs of the business.

Service providers are going to see a massive increase in the number of locations that require routing as the service edge changes and IP becomes ubiquitous. Crosshaul, DCSG, MEC and network slicing will drive a fundamental rethinking of the network which will mean more routing. As these locations get closer and closer to the customer, throughput can be, and cost must be lower. Certainly, virtual routers can greatly reduce costs. However, the reason service providers are investing in the new service edge is it provides a path to new revenue.

Moving away from the legacy router and its appliance model of management is critical to enabling greater agility which will be essential to getting new revenue. Not only is the CLI management paradigm uneconomical in this scenario, but there are not enough skilled technical staff to manage that way. Carrier-grade automation leveraging multiple virtual routers will be essential to drive new sources of revenue.

Increasing agility means that service providers can meet their customers’ needs faster while minimizing OpEx. This translates into service velocity. Time to revenue will be critical to capturing share in these new services.