JNT Visual - Fotolia
Virtual customer premise equipment provides significant advantages to communications service providers who offer managed business services. By leveraging network functions virtualization and vCPE, providers can rapidly introduce new services without deploying new hardware at customer locations. vCPE can also improve remote management capabilities and reduce operations costs.
Enterprises use customer premise equipment (CPE) to connect to the telecommunications network and access services delivered by communication service providers. Virtual CPE is a new way of delivering broadband services to business customers in that most of the CPE functions -- e.g. routing, NAT, VPN or firewall -- are virtualized, with the functionality residing in the service edge or the communication service provider data center. vCPE for business is a subset of the larger NFV market opportunity.
Traditionally, communication service providers have delivered WAN services like routing, firewall and virtual private network (VPN) to business customers by installing one or more network equipment boxes at the customer site. The promise of vCPE is to leverage virtualization on general purpose hardware to simplify the delivery of network services. vCPE allows providers to migrate the majority of WAN functionality to software residing in a remote data center. Hardware -- either a low-cost server or switch and router -- is still required at the remote, or branch, location. Then communication service providers can remotely configure and manage a variety of WAN features, and customers can gain access to their network services via a portal that lets them change these services on demand.
vCPE market opportunity
Business customers spend more than $45 billion annually on wide area services like MPLS, VPN and Internet. As business requirements shift and security threats increase, communication service providers need to adjust their WAN services to meet customers' needs. For example, the increased interest in sending network traffic directly to the Internet -- as opposed to branch-to-data center -- is creating a new market for SD-WAN services. Communication service providers are leveraging vCPE to rapidly deliver new services -- e.g. SD-WAN and security -- to allow customers to easily adjust their services mix and to reduce their Capex and Opex. According to Doyle Research, vCPE is one of the largest drivers of NFV deployment and will account for more than 20% of NFV-related services by 2018.
Like many new, complex technologies, vCPE has some significant implementation challenges. Most communication service providers have existing legacy services -- e.g. MPLS -- that rely on specific hardware implementations -- e.g. routers -- at the customer site. Deploying NFV services with virtual network functions (VNFs) is challenging, given the relative lack of standards and poor interoperability between a large number of network software suppliers. Providers must carefully select network partners to deliver WAN functions, service automation, management, analytics and security. These newly designed services must then be integrated with their existing operational and business support systems (OSS/BSS).
Large number of vCPE suppliers
In addition to the option of internal development, communication service providers have a large number of vCPE suppliers to choose from including:
- Active Broadband Networks
- Edgewater Networks
- Hewlett Packard Enterprise
- Juniper Networks
- Overture Networks
- Versa Networks
These are just a handful; many other suppliers exist, including dozens of network security providers.
Recommendations for communication service providers
vCPE is one of the leading business cases for NFV deployment by communication service providers. New services -- e.g. SD-WAN and security -- driven by vCPE can be rapidly deployed to business customers with limited impact on the traditional, non-virtualized network. Many leading communication service providers will deploy vCPE during 2016 and 2017. Communication service providers deploying vCPE and NFV will continue to be challenged by the lack of NFV standards, multitude of suppliers, and inability to easily link to existing OSS/BSS platforms.
Juniper introduces Cloud CPE, a software-based router
Everything you need to know about NFV
Ten ways to leverage NFV