uCPE/vCPE and the network: You are in me, I am in you

IDC believes that the acceptance and adoption of SD-WAN by enterprises will become more and more widespread. As virtualization, cloud management, SDN and other emerging technologies continue to develop throughout the enterprise network, uCPE/vCPE will benefit from this paradigm shift and receive more and more attention. This article will first briefly introduce uCPE/vCPE, and then focus on the inseparable relationship between uCPE/vCPE and the network.

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First, let’s get to know uCPE/vCPE

Typically, service providers want to simplify on-site deployment by replacing dedicated equipment with virtual network functions (VNFs) running on a single general-purpose platform, as shown in the figure below. For maximum flexibility, uCPE should leverage a pure general-purpose server architecture without the assistance of proprietary extensions or dedicated hardware.

vCPE is a virtual customer premises equipment that provides network services such as routing, firewall security, and virtual private network connections to enterprises by using software rather than dedicated hardware devices. By virtualizing CPE, providers can greatly simplify on-site deployment and accelerate service delivery, remotely configure and manage equipment, and allow customers to order new services or adjust existing services on demand.

Therefore, whether it is uCPE or vCPE, its purpose is to provide enterprises with routing, firewall and other functions without the need for dedicated hardware devices, simplify user on-site deployment, and accelerate service delivery.

Will vCPE and SD-WAN functions converge?

For service providers, virtual customer premise equipment (vCPE) and software-defined WANs are meant to achieve the same goal: to provide managed services to enterprise customers, but with different technologies. As a result, providers face a trade-off: whether to value the speed of SD-WAN deployment or the flexibility of vCPE platforms (vCPE is custom-built, so development time can be long). However, soon, there will be no distinction between the two. As capabilities merge, the lines between the two technologies are starting to blur.

Many leading service providers are currently deploying SD-WAN and virtual CPE services to their enterprise customers. Over time, these capabilities will converge, either integrating SD-WAN capabilities into vCPE platforms or extending SD-WAN as a platform for vCPE services. Many service providers, including AT&T and Verizon, are deploying SD-WAN and vCPE as managed service offerings. Others, such as Telefónica, are deploying platforms centered around vCPE. Other service providers, including CenturyLink, Sprint, Vonage, Hughes Network Systems LLC, Masergy Communications Inc and Windstream, are leveraging SD-WAN products to deliver business services.

A closer look at SD-WAN and vCPE

SD-WAN simplifies the process of WAN service delivery using software-based and cloud technologies. Software-based virtualization enables network abstraction, thereby simplifying network operations. Using SD-WAN, service providers can quickly deploy managed hybrid WAN services - for example, using internet and MPLS connections.

Leading service providers are currently deploying a variety of SD-WAN services to provide managed hybrid WAN connectivity to their enterprise customers. SD-WAN vendors including VeloCloud, Versa Networks, Riverbed Technology, and Cradlepoint are continuously expanding their platform capabilities such as enhanced security, WAN optimization, routing capabilities.

For service providers, vCPE is a leading use case for deploying network function virtualization - where network intelligence is abstracted into modular software for easy deployment on standard hardware platforms. Service providers are deploying vCPE to provide a more flexible service approach to enterprise customers. These services virtualize CPE functions, residing functions such as routing, network address translation, VPN or firewall at the service edge or in the data center.

What are the roles of vCPE and uCPE at the network edge?

In the past, providers needed dedicated hardware to deliver a set of network services. The hardware was typically a branch router, which sometimes included one or more standalone firewalls, a distributed denial of service defense device, or a WAN optimizer, all of which were deployed in the branch office.

Now, our goal is to use common hardware at the branch and have the vCPE/uCPE provide some or all of the software required for all services. This shifts the burden from hardware development to software development, providing flexibility and agility to vendors.

1. VNF: Making services more modular

Traditional software delivery of network functions focuses on virtual appliances, which tend to fully replicate the functionality of hardware devices in a single unit. The network function virtualization approach divides the device into smaller functional packages - virtual network functions (VNFs), which work together to provide network functions. Service providers can dynamically push VNFs to CPE platforms, and VNFs can be run in locations such as the client, the provider's server resources at the edge, etc.

2. Change WAN

Virtualization, uCPE and vCPE create new opportunities for providers and customers, and users can adopt new services and try new platforms to transform their IT infrastructure. Enterprises are now very interested in software-defined WAN, and many providers use the vCPE model to provide SD-WAN.

Some providers adopt a fully managed edge model, where a uCPE box can host a complete SD-WAN package (one that can run on dedicated hardware). Others deploy a hybrid edge or cloud model, where the SD-WAN relies on services provided by cloud providers to some extent. Still, other companies have fully cloud-managed models, such as network service providers offering SD-WAN as a feature set service.

Regardless of which model a service provider uses, the number and breadth of vCPE deployments are exploding as the SD-WAN market continues to grow.

IDC predicts that the global vCPE infrastructure market (hardware and software) will exceed $3 billion by 2021. The vCPE software market will grow from $145.7 million in 2016 to $2 billion in 2021, a compound annual growth rate (CAGR) of 68.3%. The vCPE hardware market is expected to grow from $67.8 million in 2016 to $1.16 billion in 2021, a CAGR of 76.4%. These forecasts will once again drive hardware and software vendors in the networking industry to increase their investments to capture a large share of this lucrative market. But in the world of uCPE/vCPE, there are still many challenges.