Digital Transformation: Private Optical Networks and the ‘Third Platform’
In order to remain competitive in today’s all-digital world, enterprises are embracing digital transformation (DX). Cloud applications are now a vital component for how organizations develop products, reach the market and control costs – covering everything from supply-chain to customer service.
The overriding goal of DX strategies is leveraging cloud applications to stay ahead of customers’ escalating connectivity needs. Meeting these demands is sometimes difficult through a traditional service provider’s shared network. For widely distributed enterprises, it often means negotiating with multiple service providers.
Enterprises must be able to meet industry standards and expectations quickly and economically and with a high degree of flexibility, scalability and security. For these reasons, many enterprises are currently relying on their own private optical networks.
Computing platforms have gone through three major evolutions since the late 1950s as processing, storage and networking power experienced exponential innovation. IDC describes today’s distributed, cloud-based computing as “the third platform” in this evolution; leveraging digital tools such as social media, mobile connectivity, data analytic applications, virtualized resources and billions of interconnected, IP-addressable devices. The third platform has disrupted organizations by changing the way they develop products, service customers and communicate with stakeholders. At first, most third platform use was project-based and specific problems were solved through technical solutions, such as migrating data storage to a cloud provider or using remote sensors to monitor a process.
Moving forward, the third platform is becoming a fundamental component in enterprise strategy — a re-tooling to reach organizational excellence for the next 10 to 20 years. That means heavy investment in related systems and networks. IDC estimates that by 2019, the third platform will drive 75 percent of all IT spending.
Private Optical Networks
DX requires enterprises to decide how best to provide WAN connectivity to operational sites, data centers and cloud or internet service providers. Traditionally, an enterprise would simply order additional capacity or new services from a communication provider. The services and solutions would then be delivered over a network shared with hundreds or thousands of users; which typically worked well in a relatively static environment where capacity growth was slower and the need for enterprise control was low. But DX requires enterprises to have firm control over its digital systems and the networks that support them. Control implies the network must be highly flexible, reliable and secure, yet at the same time, simple, easy to operate and cost-effective.
A private optical network uses enterprise-dedicated hardware and fiber plant to connect specific points essential to enterprise operations. The network can be wholly owned and operated by the enterprise itself or by contracted third parties. Most often, an enterprise will lease dark fiber connecting end-points, such as between a company’s headquarters and a colocation data center. In some areas, where fiber is not available, too expensive or has low bandwidth, leased services can complement the private optical network. The dedicated nature of a private optical network yields benefits of flexibility, security and scalability that are hard to achieve over a shared network. As a sole tenant and owner, an enterprise can coordinate network needs with DX requirements and adjust the capacity or service types accordingly.
In recent years, private optical network implementation has become more practical. Data Center Research recently reported that since 2008, global colocation data centers have grown from 850 to 4,000. In the same time period, fiber-lit buildings in the US have reached 50 percent. These trends are expected to grow as the adoption of enterprise digital transformation increases. Other trends, such as 5G wireless networking, webscale data center interconnect and ubiquitous broadband service access, will contribute to demand for dark fiber. Together, proximity to data centers and availability of dark fiber are accelerating the trend toward private optical networks.
Also driving adoption are simplified optical transport systems. Optical transport equipment, including SONET, DWDM, OTN and packet-optical systems, were traditionally built to support very large networks with widely distributed users. The networks were adapted for packet transport from a telephony background. As a result, optical transport systems are generally complex, requiring careful engineering and significant capital expense.
For enterprise private optical networking, the transport equipment must be easy to configure, deploy and operate. It also must be reliable, scalable, secure and yet affordable — with a modest capital investment. These requirements point to a disaggregated optical transport solution, separating functions, such as wavelength transponding or optical amplification into discreet devices. This allows the enterprise to select only those pieces that are needed, while excluding unwanted components and their associated cost.
The concept differs from solutions typically used by service providers where components are combined into platforms intended for many end-users on a shared network. For a typical enterprise, the challenge is deciding whether disaggregation is practical. Most will not have the expertise needed to design, build and operate a component-level, disaggregated optical transport solution typically used by service providers. Only larger enterprises and multi-agency government entities will find value in building shared networks using these kinds of converged solutions.
Most enterprises building a private optical network will find that simple, modular optical transport solutions offer the best combination of control, simplicity and financial return. Either way, any organization is capable of fully embracing private optical networks as part of its digital transformation towards enterprise excellence.
Chris Janson is senior product architect, optical, at Nokia.