After virtualization and cloud, what’s left on premises?

Extreme virtualization leaves just switches, access points, secure routers

cloud computing data center

How much of an organization’s IT capabilities – including processors, storage and network – can be virtualized and moved into the cloud?

Quite a bit, according to Craig Mathias, principal at advisory firm Farpoint Group. The enterprise network of the future will consist of access points, switches to provide interconnect and power, and routers that combine security functions, traffic optimization and related capabilities. That’s it. Everything else will be provisioned as services in the cloud.

So-called “extreme virtualization” will enable continuous access to appropriate computing and information, even as requirements evolve over time, Mathias says. Economics will drive the transition, as enterprises look to better manage IT costs and curb spending on traditional capital investments and ongoing maintenance.

The transition will occur over the next decade, Mathias says. It’s already underway, with significant adoption of cloud services for compute, storage and network functions. Some network management and operations platforms have also shifted to the cloud.

Read on to see how we got here and what comes next.

With virtualization hard at word across essentially all of IT, we’ve begun to explore the next phase in the evolution of this powerful and versatile approach to provisioning computation, storage, networking and more.

But while the technical benefits are close to overwhelming, we need to begin our discussion with the kicker that will place an evolved definition of virtualization at the heart of future IT strategies across organizations of all sizes and missions.

And with that, it is, as they say, all about the money.

Many IT practitioners are constantly reminded of a very stark truth: IT budgets in general never recovered from the effects of the Great Recession of almost a decade ago. A commonly restated rule of thumb is that every year brings a demand from senior management that IT accomplish 10% more with 10% less funding. While the situation may not be as dire as that in every IT shop, we have nonetheless seen an overarching emphasis on cost control, affecting both capital expense (CapEx) and operating expense (OpEx) budgets. No surprise here, really; IT is usually considered to be a cost center, not a profit center, and the performance of the IT function overall is gauged by the (admittedly, rather vague) metric of benefits accruing to end-user productivity, and not, of course, by the degree of adoption of cool new technologies.

CapEx v. OpEx

A general strategy for dealing with this challenge that was recommended in the early days of the recession was to increase CapEx so as to decrease OpEx. CapEx includes the physical gear, software, and non-recurring engineering (NRE) required to get any given installation or upgrade planned, purchased, installed and configured as optimally as possible. CapEx, owing to the faster/better/cheaper tradition in IT, benefits from both manufacturing economies of scale and the higher performance, in terms of both product functionality and operations-staff productivity, inherent in the technological advances central to the introduction of innovative new products.

OpEx, on the other hand, is labor intensive, with the associated cost curves often moving quite opposite to that of CapEx. No matter how good a given IT professional’s skills, human productivity has limits – you know, sleep, the occasional weekend off, and the ever-present possibility of all-too-human error. So, the strategy at the time was, simply put: Invest in newer technologies so as to increase the productivity of IT staff, thereby limiting OpEx and gaining from the benefits of upgrades to the newer technologies and products that would more often than not be in the planning pipe regardless. Simple.

Except now it’s becoming clear that such a strategy also has its limits. CapEx upgrade cycles have stretched significantly, because of the above-noted slow growth in CapEx budgets, but also perhaps due to a decreasing overall rate of innovation in high tech itself. And while enhanced operations-staff productivity is often easy to observe, maintenance costs in many cases now constitute a major component of OpEx, often compensating vendors for up-front purchase discounts but limiting savings on the OpEx side. Fortunately, a reexamination of OpEx enabled by a new strategy we have been calling “extreme virtualization” holds great promise for managing IT costs, this time by shifting costs back into the OpEx domain, but with an interesting twist in the form of another key technology trend: the cloud.

Extreme virtualization

The concept of extreme virtualization began with several longer-term planning exercises that Farpoint Group participated in over the past few years, and at the root of each of these was a single question: What does IT infrastructure look like in 2025?

The past three decades of CapEx spending have been dominated by performance enhancements (to today’s minimum of 1 Gbps Ethernet, for example), coverage and capacity improvements for wireless LANs, specialized hardware for performance management (for example, accelerators of various forms), and, of course, a broad range of security solutions. The mix-and-match interoperability central to networking made it possible to build highly customized solutions via incremental enhancements as required, but unfortunately often accompanied by complexity that clearly has a negative impact on OpEx. As point-product innovations consolidated into more comprehensive and manageable offerings, however, the 10% rule could still be respected.

This consolidation was followed by an even more important set of innovations with corresponding cost reductions: the rise of the cloud as a platform for networks. While many if not most definitions of virtualization have focused on virtual machines and similar technologies, a more contemporary and appropriate definition of virtualization can also include functions and capabilities that have historically been based in locally provisioned hardware and software, but which are today available as services in the cloud. We thus today suggest a strategy that moves costs in the opposite direction from what was previously applied, this time from CapEx to OpEx, but in this case by virtualizing as much of IT infrastructure as possible into cloud-based services.

Such a strategy is already hard at work in many organizations today. Just for starters, computational infrastructure (servers in the traditional sense) are now available, even on-demand, as cloud-based services. IT organizations see no difference in capabilities; these virtual servers (and virtual machines on cloud-resident physical servers) can be used in a manner identical to that of local hardware. Ditto for storage, with WAN performance often the only factor currently blocking a transition to cloud storage as primary and not just for collaborative or backup applications.

virtualization features benefits Farpoint Group/Network World

We’re even seeing significant application of network virtualization, particularly with respect to network functions virtualization (NFV). While much of the emphasis here has been on carrier and service-provider solutions, the possibilities of moving what formerly required local network hardware into the cloud, again with service and capacity on demand, can be broadly applied by individual end-user organizations. The continuing transition to software-defined networking (SDN) provides further motivation here, with computation in the cloud (SDN controllers, for example) replacing dedicated local networking components in the interest of enhanced flexibility, security, performance – and, again, cost reduction.

In addition, significant portions of the management and operations arsenal are also moving to the cloud. Management consoles (wired, wireless, security, other IT, and beyond) are now widely available provisioned in the cloud, with service charges – including maintenance and enhancements – billed monthly. The cloud brings unparalleled convenience, including anytime/anywhere/any-device access, along with easy scalability, to IT shops of all sizes and missions. VMs on servers in the data center dedicated to network management requirements? Nope – no longer required.

What’s left on premises?

Examining just the networking requirements of IT going forward, we find the need for only a very limited set of functionality, as follows:

  • Wi-Fi access points (AP)
    With the majority of client devices now connecting to organizational networks wirelessly, the coverage and capacity provisioned by contemporary Wi-Fi is today critical. Advances in basic technologies as a result of enhancements to IEEE 802.11 standards yield greater security, faster (with higher overall capacity) and more reliable connections, lower prices resulting from functional consolidation into chipsets as well as marketplace competition, and also drive a corresponding evolution of the wireless capabilities of client devices. Given advances like Wave 2 of 802.11ac, which features multi-user MIMO (MU-MIMO), the upcoming 10 Gbps 802.11ax, and the 60-GHz. technologies, 802.11ad and .11ay (the latter of which might even reach 100 Gbps!), there appears to be no significant upper bound on overall WLAN capacity, essential for organizational success irrespective of mission.
  • Ethernet switches
    Interconnecting and powering all those APs, as well as providing the occasional wired drop and implementing security and traffic policies across the network value chain, is the otherwise transparent Ethernet switch. There is some debate as to the long-term viability of the 2.5/5-Mbps products now relatively common, with 10 Gbps a safer (if, for now, somewhat more pricey) bet given the above-noted evolution of Wi-Fi technologies. We expect that hierarchies of switches ranging from edge to core will remain the preferred architecture and implementation strategy, with increasing levels of provisioned throughput continuing their traditional outward migration to the edge. And while we expect more distributed and cooperative WLAN control-plane implementations, Wi-Fi controllers, where required, will disappear into the resulting hierarchy of switches – or the cloud.
  • What used to be a router
    This element provides essential interface functionality for the connection of organizational LANs to service-provider WANs. We have, of course, moved quite a distance from the multiprotocol router of 30 years ago (remember IPX/SPX, NetBEUI, and Burroughs Poll/Select, among others?) and have in fact now returned to the roots of the single-protocol Interface Message Processor (IMP), reasonably described as the router of the ARPANET – the direct ancestor of today’s Internet – and also arguably a precursor of today’s software defined networking (SDN) technologies as well.The router going forward will of course provide IP addressing and routing functions (NAT and etc.), VLANs, and other familiar capabilities, but also the vast array of security functions, traffic optimization (including class and quality of service as well as load balancing), and related capabilities. Its functionality, though, while highly-configurable in software via the management console, is straightforward and the device will essentially be transparent in operation. Of particular interest, however, is the provisioning or overlapping of redundant WAN connections, again for performance optimization (moving functionality to the cloud always highlights the need for more capacity here regardless), but also for the resilience that derives from the elimination of single points of failure.

Everything else as a service

The above rather limited premises-based arsenal, however, leads to the central feature of extreme virtualization introduced above: Essentially all other networking functionality is resident in the cloud and provisioned and purchased as a service. This includes, of course, servers and their supported applications (and of course virtual machines), storage (even primary storage in many cases), and, via network functions virtualization, major elements of organizational networks as well. Also included in cloud-provisioned form are unified wired/wireless management consoles, network analytics, and related capabilities.

The advantages of this almost “everything-as-a-Service” (EaaS) approach are numerous:

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