SDN Could Save Operators $4 Billion in Capital Expense by 2017
Software Defined Networking (SDN) could save mobile operators more than $4 billion in capital expenses by 2017, according to a study commissioned by Tellabs.
Savings stem from 5 key SDN applications for mobile backhaul networks. These savings can help close almost half of the $9.2 billion "backhaul gap" identified in a previous Strategy Analytics report. The "backhaul gap" is the difference between required backhaul investment and planned spending.
The earlier report found that a capacity shortfall in backhaul networks has already begun to build. The "backhaul gap" may reach 16 petabytes globally by 2017.
To evaluate SDN's impact on mobile backhaul investment, Strategy Analytics researched 5 SDN applications. Strategy Analytics anticipates these areas are where SDN will have the most impact: Metro Aggregation/Load Redistribution, Local Breakout/Internet IXP, Small Cells, Cloud RAN and Wi-Fi Offload/Video Redirect.
The largest single saving in capital expense value terms will come from Metro Aggregation/Load Redistribution. This application could contribute savings of $96 million in 2013, rising to $1,116 million in 2017.
Across the SDN applications, the value of capital expense savings by 2017 is forecast to be:
- Metro Aggregation/Load Redistribution - $1.11 billion
- Local Breakout/Internet IXP - $1.08 billion
- Wi-Fi Offload/Video Redirect - $1.02 billion
- Cloud RAN - $777 million
- Small Cells - $202 million.
Asia Pacific is the region facing the most significant backhaul funding shortfall. Asia Pacific will also be most likely to benefit from SDN.
So far, SDN has been used to optimize data center resources and service platforms in the cloud. Recently, operators have tested SDN applications for operational network elements. Applying SDN to transport and backhaul optimization is so new that standards work began only recently.
"Until now, we've seen too little quantification to support SDN business cases for service providers," said Dan Kelly, Tellabs CEO and president. "The Strategy Analytics report provides solid evidence and examples to demonstrate SDN's true value to customers."
"Based on customers' input and the compelling business cases we've identified, we plan to incorporate SDN functionality into the Tellabs 8000 intelligent network manager, and into Tellabs 8600 and Tellabs 7100 products, early in 2014."