service assurance & virtualization investor relations€¦ · 08.04.2016 · instrumentation...
TRANSCRIPT
©2015 NETSCOUT ° CONFIDENTIAL & PROPRIETARY
Service Assurance & Virtualization
Investor Relations
Anil Rao, Senior Analyst, Analysys Mason Dr. Vikram Saksena, Office of the CTO, NetScout Systems, Inc.
April 8, 2016
April 8, 2016
Agenda
© 2016 NetScout Systems, Inc. 2
• NFV / SDN – Current state of play
o Key drivers of service provider interest
o Market outlook
o Opportunities and obstacles
• NetScout’s Perspective
o NetScout’s approach and capabilities
o Early use cases
o Supporting hybrid networks
o Summary
• Q&A
Anil Rao, Analysys Mason
Dr. Vikram Saksena, NetScout Systems
April 8, 2016
Safe Harbor
Forward Looking Statements:
Forward-looking statements in this communication are made pursuant to the safe harbor provisions of Section 21E of
the Securities Exchange Act of 1934 and other federal securities laws. Investors are cautioned that statements in this
communication, which are not strictly historical statements, including without limitation, the statements related to
product development plans and related customer adoption, constitute forward-looking statements which involve risks
and uncertainties. Actual results could differ materially from the forward-looking statements due to known and unknown
risk, uncertainties, assumptions and other factors. Such factors include slowdowns or downturns in economic conditions
generally and in the market for advanced network and service assurance solutions specifically; dependence upon
broad-based acceptance of the Company’s network performance management solutions; the presence of competitors
with greater financial resources than ours and their strategic response to our products; lower than expected demand for
the Company’s products and services; and the timely execution of key product development initiatives. For a more
detailed description of the risk factors associated with the Company, please refer to the Company’s Annual Report on
Form 10-K for the fiscal year ended March 31, 2015 and the Company’s subsequent Quarterly Reports on Form 10-Q,
which are on file with the Securities and Exchange Commission. NetScout assumes no obligation to update any
forward-looking information contained in this communication or with respect to the announcements described herein.
© 2016 NetScout Systems, Inc. 3
April 8, 2016
Key Investor Questions to Answer Today
© 2016 NetScout Systems, Inc. 4
• What is virtualization and why does it matter?
• How might service provider deployment of virtualized network architectures
evolve?
• What parts of the network will likely continue to require traditional
instrumentation for monitoring and service assurance?
• What is the current and potential spend on virtualized probes over the
coming years?
• What is NetScout’s approach to virtualization?
• What are the benefits of NetScout’s technology in supporting virtualization
initiatives and what are the initial use cases?
• Where can NetScout’s virtualization capabilities be applied going forward?
NBED Title in sentence case
© Analysys Mason Limited 2016
NETWORK VIRTUALISATION AND
SERVICE ASSURANCE:
STATE OF THE INDUSTRY
ANIL RAO
8 APRIL 2016
© Analysys Mason Limited 2016
Revenue growth expectations are fueling a focus on five areas
6
Trends behind CSP to DSP transformation Network innovation’s enabling role
Personalised, dynamic communication requirements Active identity, location, content, preferences management; matching services
Anywhere, anytime communications Elastic capacity where and when it’s needed; Cloud-based service delivery
Real-time, automated fulfilment and experience management Automated service and resource orchestration with dynamic service chaining and
integrated policy, security and analytics
Fast and flexible service innovation Automated, API-driven architecture open to third parties
CSP Communicat
ion
Service
Provider
DSP Digital
Service
Provider
Virtual
network
Existing
investments
New
opportunities
Physical
network
© Analysys Mason Limited 2016 7
NFV/SDN is the “Sixth Wave” in telecom networking
Physical to virtual, featuring:
Decoupled control & data plane
Decoupled hardware & software
Copper to fibre Synchronous
to IP/MPLS/Ethernet
Asynchronous
to synchronous
(for example, PDH to SDH) Analogue to digital
1960s 1980s 2000s 2015+ 1990s
Fixed narrowband to
mobile broadband
Source: Analysys Mason
Most CSPs
are here
Very
few
CSPs
are here
Development Early adoption Mass adoption Stable state Persistent legacy
Next wave
2-4 yrs 5-15 yrs
All physical Co-existence of physical and virtual All virtual
New waves tend to have long
development and adoption phases
7
© Analysys Mason Limited 2016
Drivers and inhibitors for NFV/SDN
8
Key market drivers and inhibitors for NFV/SDN
SHORT TERM LONG TERM
HIGH
SCN will provide a long-term flexible, scalable vNGN platform for existing and
new digital economy services. This will require long-term transformation
(process, people and systems).
NFV and SDN COTS software immaturity is driving in-house development and
inhibiting scalable operationalisation of these technologies.
LOW
PRODUCT IMMATURITY
LOW
HIGH
TIMEFRAME IMPACT
DR
IVE
RS
IN
HIB
ITO
RS
NEW DIGITAL SERVICES REVENUE
Source: Analysys Mason
SERVICE AGILITY
COST OPTIMISATION
EXISTING INFRASTRUCTURE
UNCERTAIN BUSINESS BENEFIT
vNGN-OSS automation and operational flexibility will reduce opex, time to market
and capture revenue faster.
Hardware, data centre and disaster recovery cost savings will be short term, but
support tactical cost-reduction business cases to secure SCN budgets in the
near term.
CSPs need to get a return on their investments in existing network infrastructure,
and everything will not be virtualised.
SCN spend will continuously compete mainly with sales and marketing for
budget and will need business case support for increasing spend (for example,
for large deployments, replacements and upgrades).
Source: Analysys Mason
© Analysys Mason Limited 2016
Service agility enabled by increased OSS automation is the long-
term driver for vNGN
9
15%
5%
CSPs’ NFV deployment strategy
Service-led strategy Greenfield implementation of a
new service
Lifecycle upgrade
strategy
Upgrading end of life infrastructure with
virtual network functions
Platform migration
strategy
CSP migrates infrastructure and services
onto the new NFV enabled platform
© Analysys Mason Limited 2016
Exponential traffic growth with flattening CAPEX Network virtualisation includes:
• Network function virtualisation (NFV) – Use of cloud
computing technologies to run telecom network functions;
(eg: commercial hardware, hypervisors, virtual machines
etc)
• Software defined networking (SDN) – new architecture
enabling network programmability to dynamically route
network traffic
Network virtualisation is expected to break the Traffic –
CAPEX correlation; but the evolution to virtual networks will
take ‘many years’ (atleast 10 yrs)
With slowing CAPEX, CSPs will need service assurance to
increase network and operational efficiency to support the
growing traffic, enhance customer experience and reduce
customer churn
Service assurance spend will be driven by the need to increase
network efficiency; NFV/SDN will create new SA requirements
10
Exponential
growth of data
traffic
Flattening
CAPEX
• Network
virtualisation
• Demand for
service
assurance
© Analysys Mason Limited 2016
2014 – Service assurance market
• The market forecast presented here is for the period 2014
– 2019;
• For the period 2015 – 2020, we expect the growth rate to
moderate to about 3% to 4%, with the SA market
accounting for about USD 3.68 billion in 2020.
[ ESTIMATE ONLY; NOT PUBLISHED]
• NFV/SDN associated spending will account for about
5% to 8% of the total SA market in 2020.
• Historically, the probes systems segment has accounted
for about 40% of the overall service assurance segment.
2019 – Service assurance market
SA for NFV/SDN is a small portion of the overall SA market
11
3081
8
Physical
Virtual
4161
94
Physical
Virtual
CAGR: 6.6%
© Analysys Mason Limited 2016
vNGN-SA for a hybrid telecoms network Key takeaways
• The NFV evolution will be a gradual process, and the
physical network will not perish overnight
• As more network elements virtualise, new assurance
capabilities must be introduced to monitor the virtual
domain (vProbe); but end-to-end assurance is critical
• Commercial SA contracts for NFV is starting to emerge,
and more announcements are expected in 2016
New SA must provide e2e monitoring of the physical and virtual
network, and assure services delivered over the hybrid network
12
© Analysys Mason Limited 2016
NetScout’s 5 Stages of Growth
13 ©2015 NetScout Systems, Inc.
Innovation, Belief, Staying Power, Customer Focus
1984-1991
$ 0-1 M
NetScout .1
Consulting
Projects
2001-2006
2006-2015
Next 5 yrs.
$1-$100M
NetScout 2.0
Survival
Enterprise
$100-$450M
NetScout 3.0
Leap Frog
Service
Provider
$450-$2B
NetScout 4.0
Pervasive
Mainstream
Service Assurance in the Era of Virtualized, Software-centric Networks
Dr. Vikram Saksena, Office of the CTO NetScout Systems, Inc.
April 8, 2016
April 8, 2016
NetScout Today
• Acquisition of Danaher Communications assets in July 2015 positions NetScout as the market leader in service assurance
• Global footprint in top mobile, fixed, and cable operators in 50+ countries
• Long history of software deployments in Enterprise Datacenters
• Advancing development of an integrated probing solution that brings together the technology differentiators of both NetScout and Tektronix Communications
• Successful track record in helping customers evolve through complex transitions driven by IP convergence, fixed/mobile broadband, cloud, and now .. NFV/SDN
© 2016 NetScout Systems, Inc. April 8, 2016 14
April 8, 2016
Adaptive Service Intelligence (ASI) One Software, Delivered on Multiple Platforms
SUBSCRIBER
NETW
OR
K A
PP
LIC
ATIO
N
• Real-time metadata and Key Performance Indicators (KPIs)
• On demand session trace for subscriber troubleshooting
• Optimized workflows for service triage and root-cause analysis
• Complete hardware independence
• Common data set across all platforms
Appliance COTS HW NFV vCPE
PLATFORMS
© 2016 NetScout Systems, Inc. 15
April 8, 2016
Four Pillars of a Software-centric Network
Virtualization Abstraction
Assurance Orchestration
• Efficiency • Elasticity • Lower CapEx
• Service Velocity • Innovation • Differentiation
• Agility • Automation • Lower OpEx
• High-class user experience
• Real-time Analytics
© 2016 NetScout Systems, Inc. 16
April 8, 2016
Enterprise Virtualization Engagements
© 2016 NetScout Systems, Inc. 17
• Server Virtualization
– Proven NetScout deployments on hypervisor virtual server environments
– Provides visibility into server to server communications and access to packets for detailed troubleshooting
• Network Virtualization
– Primarily in evaluation phase (e.g., labs or prototype deployments)
– Some production installations where NetScout instrumentation is deployed in the PoD or MicroSegment
• Next-Generation IT Environments
– Combined server and network virtualization will drive automation and agility in the continual deployment of services and applications
– The continuous deployment model will require continuous monitoring in real-time to ensure success
April 8, 2016
Service Provider Virtualization Engagements
• Service providers examining a range of use cases
– Mobility (IoT, e.g., Connected Cars)
– IP Voice (Voice over LTE, Cable Voice)
– Carrier-to-Carrier SIP Peering
– Business Services
• SIP trunking, Hosted VoIP
• vCPE, Managed Services
• Hosted Application Services
© 2016 NetScout Systems, Inc. 18
April 8, 2016
Our Software Strategy Delivers Exceptional
Value to Customers
• Delivering the lowest total cost of ownership (TCO) with an
optimized hardware footprint
• Providing service assurance continuity across physical and
virtual infrastructures to enable disruption-free evolution
• Extending the monitoring to the edges of the network for end-
to-end service assurance via pervasive deployment
• Improving service delivery automation
Greater Service Agility with Lower Capital and Operational Expense
© 2016 NetScout Systems, Inc. 19
20 April 8, 2016
ASI Technology Delivers Lowest TCO Optimized Hardware Footprint
Smart Data Recording
Smart On-board Processing
Smart Acceleration
5-15 times compression for longer retention, faster retrieval, and lowest storage costs
Process-then-Store model as opposed to Store-then-Process model minimizes the number of back-end servers
Intelligent I/O and packet processing technology minimizes the number of CPUs required
Least amount of hardware resources, power consumption, and rack space (Green Technology)
© 2016 NetScout Systems, Inc.
April 8, 2016
Service Assurance Continuity Seamless Monitoring across Physical and Virtual Networks
IP Backbone
Physical Gateway & Probe
IMS Core
• Consistent end to end visibility for effective service assurance
• Common ASI metadata from all probes to facilitate seamless integration at the application level Virtual
Gateway & Probe
nGeniusONE
Service Assurance
End to End Voice Call over 4G/LTE
© 2016 NetScout Systems, Inc. 21
22 April 8, 2016
Pervasive Instrumentation Extend Monitoring to the Edges of the Network
Metro Ethernet
Small/Medium Business vCPE
vPER Fabric Switch
Operator Edge
IP Core
vFW
vDNS vPER
nGeniusONE
Service Assurance
• Software probes can be deployed in places where it was not feasible to instrument before
• Expands the addressable market for NetScout
Existing Infinistream
New Soft Probe New Soft Probe
© 2016 NetScout Systems, Inc.
New Soft Probe
23 April 8, 2016
………………….
Critical Feedback for improved Automation Drive Lower CapEx and OpEx
VNF VNF VNF
Service & Network
Controllers
Service Orchestration Real-time
Alerts Powered
by NetScout
Service Request • Real-time performance alerts drive the Orchestration layer
• Network auto-configures without any human intervention
• Network resources can be scaled up or down dynamically to adapt to changing traffic conditions Software
Probes
nGeniusONE
Service Assurance
© 2016 NetScout Systems, Inc.
April 8, 2016
Summary
• Software-centric Networks is the next major evolution in networking
– Operators gain control of service creation and are able to innovate faster in response to customer and market needs
– Networks become more agile and elastic, better managed and orchestrated, lowering the total cost of ownership
• This evolution will take place over many years as operators wrestle with a myriad set of technology, operational, and organizational challenges
• NetScout is well-positioned to help customers make this transition
– ASI technology is optimized for lowest TCO
– Seamless service assurance across physical and virtual network infrastructures
– Instrumentation points can be extended to the network edge where it was not previously feasible thereby enabling end to end service assurance
– Real-time feedback for service delivery automation and just-in-time resource management to drive lower capex and opex
© 2016 NetScout Systems, Inc. 24
NetScout’s 5 Stages of Growth
25 ©2015 NetScout Systems, Inc.
Innovation, Belief, Staying Power, Customer Focus
1984-1991 1984-1991
$ 0-1 M
NetScout .1
Consulting
Projects
1991-2001
2001-2006
2006-2015
Next 5 yrs.
$0-$1M
NetScout 0.1
Consulting
Projects
$1-$100M
NetScout 1.0
Invention
Early
Adopters
$1-$100M
NetScout 2.0
Survival
Enterprise
$100-$450M
NetScout 3.0
Leap Frog
Service
Provider
$450-$2B
NetScout 4.0
Pervasive
Mainstream
Q&A SESSION
NetScout’s 5 Stages of Growth
26 ©2015 NetScout Systems, Inc.
Innovation, Belief, Staying Power, Customer Focus
1984-1991 1984-1991
$ 0-1 M
NetScout .1
Consulting
Projects
1991-2001
2001-2006
2006-2015
Next 5 yrs.
$0-$1M
NetScout 0.1
Consulting
Projects
$1-$100M
NetScout 1.0
Invention
Early
Adopters
$1-$100M
NetScout 2.0
Survival
Enterprise
$100-$450M
NetScout 3.0
Leap Frog
Service
Provider
$450-$2B
NetScout 4.0
Pervasive
Mainstream
THANK YOU
NetScout’s 5 Stages of Growth
27 ©2015 NetScout Systems, Inc.
Innovation, Belief, Staying Power, Customer Focus
1984-1991 1984-1991
$ 0-1 M
NetScout .1
Consulting
Projects
1991-2001
2001-2006
2006-2015
Next 5 yrs.
$0-$1M
NetScout 0.1
Consulting
Projects
$1-$100M
NetScout 1.0
Invention
Early
Adopters
$1-$100M
NetScout 2.0
Survival
Enterprise
$100-$450M
NetScout 3.0
Leap Frog
Service
Provider
$450-$2B
NetScout 4.0
Pervasive
Mainstream
APPENDIX
April 8, 2016
About Our Speakers
28
Anil Rao (Senior Analyst) is the lead analyst for the Service Assurance research and is part of the Telecom software
research team within Analysys Mason. He has published research on real-time network analytics, NFV service
assurance, assurance in SaaS model, IP probes and the importance of service assurance in improving customer
experience. He also works with clients on custom consulting engagements such as market sizing, marketing support,
sales enablement and strategy workshops, and has delivered public speeches on latest industry topics such as digital
transformation, CEM and operationalisation of NFV/SDN. He holds a BEng in Computer Science from the University of
Mysore and an MBA from Lancaster University Management School, UK.
Dr. Vikram Saksena is NetScout’s CTO, Cable Markets and also serves as the chief solutions architect for NetScout’s
virtualization initiatives. Dr. Saksena has been at the forefront of technology innovations in the wireless, Internet, cloud
and data analytics industries, holding senior leadership positions in a number of small and large companies. He began
his career at AT&T in the early days of packet switching and made fundamental contributions that led to the
commercialization of Frame Relay and Internet Protocol networks. He was named an “AT&T Fellow” in 1997 for his
contributions to the growth of AT&T’s data networking business. Subsequently he was part of the founding team of two
broadband start-up companies, MaxComm Technologies and Narad Networks. Later on he became the CTO of two
public companies, Sonus Networks and Tellabs, where he led the technology strategy and development of new
products in voice over IP, mobile backhaul, mobile packet core, mobile video, and mobile security areas.
© 2016 NetScout Systems, Inc.
NBED Title in sentence case
© Analysys Mason Limited 2016
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