How Network Operators Do Prepare for the Rise of the Machines

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1 Internet of Things and the Impact on Transport Networks How Network Operators Do Prepare for the Rise of the Machines Telecommunication networks today were never designed having Inter of Things use cases in mind. What will be the effect on operator s networks when 26 billion things will be connected to their networks by 2020? 56 Detecon Management Report blue 1 / 2015

2 W hen we discuss about the Internet of Things (IoT), the understanding of which devices are actually considered things and respectively the number of things connected to the internet now and in the future widely varies. In this article we will focus on the innovative IoT use cases, covering things such as heart monitoring implants, biochip transponders on farm animals, automobiles with built-in sensors, smart thermostat systems, etc. Therefore we will exclude the user devices such as smart phones, tablets, laptops. This article will cover the network requirements which the IoT use cases will impose on the transport network, such as addressing, security, traffic and quality of service. Operators should prepare their networks well ahead for these requirements in order to leverage the revenue potential that the IoT use cases promise. Addressing the Internet of Things The current widely used Internet Protocol version 4 (IPv4) was created long time ago and its addressing capabilities are already exhausted today. There are no more unallocated IPv4 subnets in the world. To adopt the growing number of devices in the internet the Internet Protocol version 6 (IPv6) was created. IPv6 offers a * Part of the internet under control of one network operator. vast addressing space of about unique IP addresses, and even if we take out all addresses reserved by standardization bodies we will have about addresses that can be used for end systems connected to the Internet. Even if in the year 2020 the global population will reach 8 billon humans, each person on the Earth will be able to get around 575 million IPv6 addresses. Therefore we can see that the IPv6 protocol is the protocol of choice for the Internet of Things. But the problem today is that internet providers only adopt IPv6 very slowly. RIPE statistics show that today only about 18% of the autonomous systems* already adopted IPv6. And from Figure 1 it can be clearly seen that after a growth phase of IPv6 adoption in the years 2010 to 2012 pushed by the close exhaustion of IPv4 operators slowed down their effort of IPv6 adoption. Latin America is currently the only exception due to the fast internet growth and the absence of free IPv4 resources. Moreover, the real situation with IPv6 adoption is even worse because RIPE statistics shows only the amount of IPv6 subnets acquired by organizations, while Google s statistics show that only about 4,5% of Google s web-site visitors are using IPv6 addressing. Therefore it obvious that telecom operators and internet service providers must increase their efforts in the IPv6 protocol adoption to make their network ready for the IoT era. Figure 1: Percentage of networks (ASes) that announce an IPv6 prefix 28 % 26 % 24 % 22 % 20 % = EU = United States = Latin America and Caribbean = Asia-Pacific = Africa = All countries 18 % 16 % 14 % 12 % 10 % 8 % 6 % 4 % 2 % 0 % Source: RIPE 57 Detecon Management Report blue 1 / 2015

3 Security implications While the addressing challenge can be solved with the IPv6 protocol, the use of IPv6 requires at the same time a stronger, more reliable and complex security model than the one used today. In this chapter we will talk about security provided by the network, not by the application layer. Today s limitation of the IPv4 addressing space created the following common approach used in client networks: the provider gives the client a public address while inside its home behind the internet access device (IAD) the client uses private IP addresses on its devices. A network address translation (NAT) function in the IAD dynamically translates private into public IP addresses when packets pass through the IAD. While NAT has been developed as a mechanism to overcome the IPv4 address space limit, it is also by mistake seen as a security tool because it hides the topology of the client s private network and limits connection from the Internet into the client private network. This perception of NAT as a security tool is incorrect but due to its ubiquity and simplicity operators and users prefer NAT to firewalls that are more reliable but also more complicated to manage. Another issue of NAT is that it creates problems for all protocols which demand direct connectivity between internet hosts (e.g. Voice over IP bearer and signaling, internet Video calls, different Cloud synchronization protocols, etc.). And deve lopers of internet applications have to spend a significant effort to develop different methods for overcoming those barriers of the NAT. This makes their solutions more expensive, less scalable and less reliable. When the IPv6 protocol was designed the concept of NAT was removed because IPv6 brings enough public addresses for each user. No NAT means simpler applications design for many IoT use cases but at the same time is requires a better security concept to control connectivity to and from the things connected to internet. This is in particular important for many IoT use cases as they enable the control of critical infrastructure (smart city, smart energy) or monitoring of sensitive data (ehealth). IADs with IPv6 support already have built-in firewalls today, but their configuration and management for each home device (e.g. lamp bulb, coffee machine, refrigerator, climate control, security camera, etc.) is too complex for the typical user. It is an opportunity for the internet service provider to remove this burden from the user and manage the network security rules for the client s home network. In order to do this the provider must know which devices are deployed in the client s network. On the other hand the typical client does not know all technical details about his devices because he simply wants to use, rather administrate them. But today there is an emerging technology which can break this loop and let the client to connect his device to the home network in a plug and play way, and at the same time allow the internet service provider automatically to receive all the necessary security requirements for the installed device and implement the appropriate security rules on the client s IAD and/ or the operators network edge devices. This technology is called software defined networking. Traffic growth and quality requirements Based on all forecasts it is clear that the number of devices connected to internet will exceed the number of humans that are online very soon and in 2020 approximately five times more devices than users will be connected, taking into account the growth of the world population and the optimistic assumption that 75% of the population will be online by But this impressive growth of connected things will not be the main driver of internet traffic growth until 2020 as a simple calculation shows: Most IoT use cases include sensors or actuators that transfer traffic in the range of 5 to 15 Kilobytes per minute whereas the average peak hour traffic per internet user is in the range of 100 to 200 Kilobit per second. Figure 2 shows the development of connected users, things and traffic based on these assumptions. IoT use cases may not accelerate the growth of internet traffic in the next years but they raise the quality requirements for transport networks: Use cases like monitoring of heart pace makers, forest fire or early earthquake detection, monitoring in energy or gas industry have high requirements on network quality parameters in particular packet loss or latency. Current networks are designed for broadband users and mainly for best effort traffic and cost optimization. Whereas for video streaming or voice applications a latency of 100 milliseconds may be sufficient, many IoT use cases require a latency in the order of only a few milliseconds. When evolving their networks, operators should have these enhanced quality requirements in mind and include for example edge clouds that means localized network, compute and storage resources into their future network 58 Detecon Management Report blue 1 / 2015

4 architectures. As IoT use cases require a high level of flexibility of the transport network in general, also network quality needs to be provisioned flexibly and on demand. Additional quality requirements are resulting from the evolution of traditional broadband services for network operators, too. Cloud based TV or gaming services require a high level of interactivity and low latency therefore transport network quality is already high on the operator s agenda and they can leverage synergies when enhancing transport quality for broadband services and IoT use cases. Providing quality in their own networks will not be sufficient to support the requirements of IoT use cases though. Sensors are distributed worldwide and connected to networks of different operators. If operators want to leverage the revenue potential of quality-guaranteed transport for smart city, smart environment, industrial control or ehealth applications, this network quality needs to be provided end-to-end. This need for end-toend quality from IoT use cases could be a new driver for interoperator agreements on network quality. Over the last decade inter-operator agreements to provide end-to-end quality have not been overly successful: For example the challenge to provide transport quality for video streaming applications has been solved by CDN providers and not by network operators. But especially for application sensitive to packet loss that do not generate a large volume of traffic, inter-operators quality agreements can be a good solutions. Operators should move quickly in the area of end-to-end quality though otherwise application level mechanisms will provide a solution. Providing network quality for IoT use cases is both a requirement and revenue opportunity for operators, providing additional network services is another. Since many IoT use cases include sensors or actuators with restrictions on energy consumption and functionality, operators can provide several services such as location, synchronization or emergency calling services to support various IoT use cases. If these functions are provided from the network the sensors can be simplified (e.g. remove GPS modules) optimizing cost and energy consumption. Internet of Things and Software-defined Networking So how shall an IoT network look like? To summarize, the network that is capable to match the requirements of the Internet of things has to be agile to enable the plug-and-play set up of connectivity, management and control of multiple Figure 2: Growth of Internet connected things and users Internet connected user/things (billion) = Internet connected users = Internet connected things = Part of device traffic Part of IoT Traffic 10 % % 8 % % 6 % 5 % 4 % 3 % 2 % 1 % 0 % Source: Gartner, UN, Detecon 59 Detecon Management Report blue 1 / 2015

5 diverse things connected via different access technologies and the deployment of new services. In addition to the increased number of end points (IPv6 capable), the connections between the end points have to be established flexibly and on demand using different communication models from hub and spoke for thin clients, through local preprocessing to peer-to-peer for smart clients. Another key aspect of the IoT network is interoperability to enable the integration of devices by different vendors being connected using various protocols. Some of the IoT use cases impose additional requirements on the network such as higher reliability and increased security and privacy (e.g. health and safety use cases). Are the operators networks ready for Internet of Things? Existing networks are lacking the flexibility to adapt swiftly to the requirements imposed by changing network demands and innovative service offerings as well as the consistent endto-end view to manage the entire network. New network technology alternatives have to be explored to turn the Internet of things into reality without creating an impossible burden on the existing networks. Software-defined networking (SDN) can deliver the required flexibility, interoperability and network programmability. Software- defined networking is characterized by the separation of network forwarding and control, the existence of a logically centralized network management, and the exposure of the network to an application layer via open APIs. The centralized vendor-independent control of the entire network from a single logical point enables significant simplification of network design and operation. Furthermore, the end-to-end network view allows the provisioning of services end-to-end with the required security and quality of service (QoS) parameters in contrast to the device level configuration which is currently predominant. The constantly increasing number of IoT use cases will create new revenue opportunities for Telcos and even more if the operators are able to deploy innovative services in a timely manner. SDN provides a mechanism to configure, manage, and optimize network resources very quickly via dynamic, automated SDN applications which can be reused or created on demand to serve best the operator s needs. A complementary technology of SDN which can contribute to optimizing operator networks to meet the demands of IoT is Network Function Virtualization (NFV). NFV is applying evolved IT virtualization technology to network functions thus enabling industry-standard servers, switches and storage to be used instead of closed vendor-dependent platforms. It allows the effortless scaling of network function capacity as well as the mobility of network functions. This flexibility in the sizing and location of network functions will be a powerful tool for operators to support the needs of the internet of things. Dr. Stefan Schnitter, Partner, is in the unit International Telco. He has had years of international experience in the field of IP-based networks and services as a result of his activities as consultant and of the management positions he has held for network operators. He currently focuses his consulting activities on strategies for broadband expansion for fixed and mobile network operators and on architecture, planning, and implementation of networks for telecommuni cations companies worldwide. Vera Markova and Alexej Gumirov are Senior Consultants in the unit International Telco. 60 Detecon Management Report blue 1 / 2015

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