ACG Research

ACG Research
We focus on the Why before the What

Thursday, July 21, 2016

Existing Skills Are Not Enough to Run Virtualized Networks

So you have got your network virtualized! What’s next?

If it’s business as usual, we would move to operation phase and start reaping the virtualization benefits.

But here is a point. It is not just about implementing a technology like SDN or NFV; rather, it’s about the skills to run a network that is virtual, elastic and not hardware centric. Isn’t it quite different from the physical networks we traditionally deal with on a day-to-day basis?

And this point emerged strongly when I talked to multiple executives of Tier 1 and Tier 2 telcos recently about how they foresee the operation of their virtual networks in the future. In particular, what are their big concerns about operating the software-based networks?

Click to read the blog.

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What DevOps Isn’t!

Future virtual networks will bring the much-needed business agility, network agility and service agility to telcos.

But this raises a question:

Are telcos’ operational structures, processes and operation teams ready to handle such agility?

And if not, what do telcos need to meet such challenges?

In fact, organizations need to evolve, one way or the other, to the DevOps model—the agile operational model effectively used by many cloud-based companies.

Click to read the blog.

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You’d Love to Have DevOps, But Don’t Know Where to Start!

O.K., so you have got your network virtualized! What’s next?

If it’s business as usual, we would move to operation phase and start reaping the virtualization benefits.

But here is a point. It is not just about implementing a technology like SDN or NFV; rather, it’s about the skills to run a network that is virtual, elastic and not hardware centric. Isn’t it quite different from the physical networks we traditionally deal with on a day-to-day basis?

For more information about ACG's services, contact

Wednesday, July 20, 2016

Webinar: Secure and Scale the Gi-LAN at 80% Lower TCO

Mobile network traffic is expected to increase 45% annually with video representing 60% of all mobile traffic. To meet the demand, networks will need to be intelligently and cost effectively scaled for secure services delivery, especially the Gi-LAN. As volumes grow, the number of concurrent users, connection rates, and throughput will all need to scale together. But how can operators evolve their architectures to support this growth while lowering TCO?

Join F5‘s Misbah Mahmoodi, and ACG’s Paul Parker-Johnson and register for this webinar to learn about:
  • The market and business challenges IoT devices, applications and the growing number of users are placing on mobile networks.
  • The key criteria to use when architecting for massive scale in application delivery infrastructures.
  • Three TCO sizing models you can reference to dimension our network performance needs.

Service Provider Transformation: Adapting and Adopting, ACG HotSeat Video

Pratik Roychowdhury, Senior Director and Head of Product Management for Contrail at Juniper Networks, and Ray Mota, CEO, ACG Research, discuss today’s constantly evolving competitive landscape; how and why service providers must transform their business, technology and organization to meet the demands and opportunities of the new virtual and cloud world. 

For more information about ACG's video services, contact

Tuesday, July 5, 2016

The Business Value of Agility

Infrastucture and service agility require the right tools, and one important tool is operations support system, which allows CSPs to reduce time-to-market and lower the cost of new service creation and deployment, operating in a hybrid infrastructure (traditional and virtualized) during CSP’s business transformation. The focus on this paper is on quantifying the impact of being agile. The paper first provides the definition of agility and then quantifies the time-to-market, service creation and revenue generation advantages of being able to create new services quicker and taking them to market faster. Robert Haim of ACG has determined that there is a 77% savings in labor cost, 13% differential in revenue generation per service launched based on a faster time-to-market advantage and a 47% increase in revenue level based on increased number of services that can be launched.

Click to download Economics of Agility_ACG.

Click for more information about ACG’s business case analysis services or contact

         Robert Haim

Tuesday, June 21, 2016

Are You Ready for NFV?

When it comes to network functions virtualization (NFV) and software defined networking (SDN), it is no longer a question of “if,” but rather “how” and “when.” Yet, surprisingly, much of the conversation around NFV and SDN is focused on technology, and very little is ever said about operational processes. A new white paper by Ray Mota, CEO and principal analyst at ACG Research, aims to put that right with an insightful analysis of how network operators need to prepare their operations for NFV and SDN.

Click for more information and to download the whitepaper.

For more information about ACG’s services, contact

Tuesday, May 3, 2016

Trends and Directions in Data Center Interconnect: A Survey of Optical and Packet Mode Networking Practices

This ACG Research report investigates the trends and directions that service providers are taking in the deployment of their data centers and specifically their interconnection. It provides insight into existing data center practices as well as future practices. The survey report connected directly with service providers utilizing data center interconnect equipment or planning to deploy such equipment to interconnect their data centers in the next 12 months. Respondents included Network Service Providers, Cloud Service Providers, Internet Content Providers and Inter-eXchange Providers in the APAC, EMEA, NA and LAC regions. 

“We confirmed our previously held belief that the number of data centers will grow approximately 60% between now and 2019,” says Tim Doiron, principal analyst, Intelligent Network Services. “We determined that the types of products (SFF or multi-slot chassis) and desired product attributes differ based upon the service provider segment. Data center optical reach demonstrates a bimodal distribution with maxima below 30km and above 600km distances. Traffic drivers for DCI bandwidth also differ by service provider segment.”

Contact to purchase the report and 30 minutes of analyst time.

     Tim Doiron

Wednesday, April 20, 2016

It’s about APPU and QoE, not ARPU

Traditionally, average revenue per user  has been one of the key metrics used to measure service providers’ financial performance. Increased competition has been putting downward pressure on ARPU, resulting in declining earnings before interest, taxes, depreciation and amortization. In parallel, the volume of data traffic transmitted over wireless networks is increasing exponentially. Global mobile data traffic grew 74 percent in 2015, reaching 3.7 Exabytes per month at the end of 2015, up from 2.1 Exabytes per month at the end of 2014 . This is driven not only by the increase of new mobile applications, but also by the sheer number of connected devices. Smartphone subscriptions passed the billion mark in 2012; the four billion mark is expected to be reached by 2016. There will be more than 20 billion mobile-connected devices by 2020, including machine to machine modules, which will exceed the projected global population of 7.8 billion.

Current cellular networks may not have the capacity to meet this demand and the further expansion of coverage and densification will only add additional capital expense and operation expense without improving ARPU. To improve financial results, SPs must focus on the average profit per user  and look for ways to reduce operating costs while providing additional network coverage.

ACG Research conducted a business study of different technology penetrations on SPs’ networks. The scenario integrated untrusted Wi-Fi, trusted Wi-Fi, and small cell into the cellular network, which includes 2G, 3G and VoLTE voice traffic. The scenario compares different penetrations to identify the optimum plan that will optimize SPs’ APPU. The study found that this is only possible by increasing the amount of trusted Wi-Fi traffic and VoWi-Fi penetration, resulting in higher EBITDA margins and APPU, up to 9 percent, saving $3.83 billion for a 35.5 percent monthly increase of APPU over five years.

Read the entire article at RCRWireless News.

For more information about ACG’s services, contact

Monday, April 18, 2016

PAM-4 or Coherent DWDM for DCI?

At the March 2016 OFC conference, Inphi announced its delivery of a 100G, QSFP28, PAM-4, pluggable transceiver with 80km reach. PAM technology has been utilized for 100G transmissions (Inphi is a specialist in this area) before but at much shorter distances. Pulse-amplitude modulation (PAM) is an analog transmission scheme similar to NRZ but with multi-level signaling, with PAM-4 utilizing four levels to signal one of four possible symbols (2 bits per symbol). During the announcement, Microsoft also publicly announced that it will begin sourcing the pluggable PAM-4 technology from Inphi for interconnection of its regional, metro-distributed data centers, which by definition are within 70km of each other. Coherent technology will continue to be used elsewhere. The metro-distributed data center deployment model builds and interconnects a number of smaller data centers within a metropolitan area instead of deploying a single hyperscale data center in the region. Microsoft also divulged that it was their intention to turn up all 40, 100G wavelengths at one time (4Tb/s with each carrier occupying 100GHz channel spacing) on a fiber pair, utilizing all available colors in the fixed-wavelength portfolio. 

Some at the conference reacted to the Inphi/Microsoft announcement by declaring the obsolescence of existing optical DCI/coherent DWDM solutions. Although the Inphi/Microsoft announcement is exciting news, ACG thinks the PAM-4 technology is far more complementary to existing coherent DWDM solutions than competitive for multiple reasons. 

Figure 1. Optical Reach for 100G Technologies 

Reach. The PAM-4 solution covers a portion of the optical reach needed to interconnect data centers. Below 10km, IEEE 802.3ba 100G pluggable optics are readily available with 100GBASE-LR4 supporting 10km reach in a QSFP28 package for cost-effective point-to-point connectivity. The 100GBASE-ER4 specification for 40km reach has been more challenging for optics suppliers to deliver and remains either in larger packages (example, CFP, CFP2) or in nonstandard formats, meaning non-interoperable across vendors. So where does the PAM-4 technology fit? In general, its initial fit appears to be in the <40km range as an alternative to existing, suboptimal pluggable solutions. We believe there is limited overlap with coherent DWDM solutions in this range. The solution also plays in the 40–80km range as an alternative to optical DCI/coherent DWDM solutions for some deployment scenarios. 

So, based solely upon reach, a logical question is how much of the optical DCI/coherent DWDM market is covered by 40–80km? ACG Research recently completed a worldwide survey of data center service providers, including network service providers, cloud service providers, Internet content providers and Internet eXchange providers. This research will be available in a published report later this month (April). One of the questions we asked the service providers was the proportion of optical reach needed to cover their data center interconnections today and in 2019. What we found is that service providers on average believe that 30–80km optical reach is needed for approximately 30% of their data center interconnections. The results indicate a modest increase between today and 2019. Based upon this preliminary research, we have a sense of the addressable optical DCI market for this technology. However, we also believe that service providers will consider at least three other factors in making their DCI deployment decisions.

Figure 2. Data Center Interconnect Optical Reach 

Operations. Every data center deployment is not like Microsoft’s plan for metro-distributed data centers, which is to turn up all 4Tb/s of connectivity in a point-to-point fashion on day one of data center activation. By deploying all 40 wavelengths at once, Microsoft could reduce the incremental cost per wavelength of deploying dispersion compensation on the fiber, which is required for PAM but not for coherent DWDM solutions. Dispersion compensation costs include both the capital equipment as well as the operational costs associated with installing and tuning the compensators. Microsoft also avoids the operational complexity of deploying fixed wavelength pluggable optics incrementally, where inventory and on-site resources are required every time a change or a wavelength addition is needed. 

Other service providers that have existing metro optical networks may not want to deploy in this manner. They may not want the added complexity of dealing with dispersion compensation for PAM deployments. Some may want to utilize existing metro optical infrastructure and/or deploy in a mesh architecture. Still other service providers may not have the same visibility as Microsoft with regard to their data center connectivity needs. They may need to be more agile and utilize a pay-as-you-go/pay-as-you-grow deployment model where they add interconnection capacity over time and in alignment with their data center compute/storage capacity and revenue generation. An incremental deployment model is just more operationally complex with fixed-wavelength pluggable optics. 

Fiber Scarcity. When fiber is scarce or expensive, fiber optic transmission efficiency (bits per Hz) increases in importance. The PAM-4 solution delivers an efficiency ratio of 1 with 100Gb/s transmission occupying 100GHz channel spacing. 16-QAM coherent DWDM modulation offers 200Gb/s in 50GHz channels or an efficiency ratio of 4. Recent flexible grid implementations have an even greater efficiency ratio approaching 7. If more than 4Tb/s of connectivity is needed and incremental fiber is scarce or expensive, service providers may need to utilize the more efficient coherent DWDM system to squeeze more bandwidth through their limited fiber resources.

Programmability. Fixed-wavelength pluggable optics do not advance the broader drive toward a programmable, agile, SDN enabled optical underlay. SDN and NFV are changing all aspects of the ICT industry, including optical solutions. Service providers are looking to utilize intelligence, automation and programmability to reduce operational costs and ensure that network resources adapt to changing business and networking conditions across protocol layers, including optics and IP. Many demonstrations at OFC utilized SDN control and service automation combined with a programmable optical layer to showcase network efficiency and adaptability. The ONS 2016 conference had similar demonstrations with ONOS and ODL controllers programming in near real-time optical and IP networking infrastructure. 

Figure 3. Example of a Mixed Technology DCI Deployment 

The Inphi PAM-4, QSFP28 solution is an exciting achievement and addresses a very real need in the sub-80km 100G market. We believe the solution is actually far more complementary than competitive to existing optical DCI/coherent DWDM solutions. Most service providers will utilize an all-of-the-above approach to their 100G DCI deployments just as they did before with dark fiber, IEEE pluggables and coherent DWDM options. PAM-4 meets the needs of data center operators, such as Microsoft, that intend to turn up 4Tb/s of transmission capacity in a point-to-point fashion between data centers in a ~70km metro-distributed network. However, if a provider needs longer reach or more than 4Tb/s per fiber pair or an incremental growth operational model or if a service provider is looking to advance its programmable, SDN enabled network, then a tunable, coherent DWDM solution is a better fit. PAM-4 or coherent DWDM for data center interconnections? Yes!

Click for more information about Tim Doiron and his recent articles.

     Tim Doiron