1 | © 2015 Infinera Network Evolution – What is happening to our metro networks and why? Sten Nordell CTO Metro Business Group

2 | © 2015 Infinera The metro today  Increased bandwidth 1G to >100G 100G Accelerates  Dynamic architectures L0 to L3 Fast moving towards SDN architectures Fronthaul/Backhaul/FTTx Cloud based services  Cost optimized solutions Purpose build hardware White label boxes Management solutions  Scalability Platform and commercial aspects  Multi Layer Management Ability to manage L0 to L3 Access/ CPE Metro Core/LH Cloud Service & Caching Provider(s)

3 | © 2015 Infinera Cloud Networking Dynamic / automatic / virtualized hardware and networking NaaS / IaaS / CaaS / SaaS / PaaS / NFaaS Programmability Hierarchy of data centers Mega data centers Enterprise-oriented data centers Distributed data centers Communication data centers Cloud-RAN data centers Traditional local exchange becomes a data center Ethernet Cloud Carrier(s) Cloud Service Provider to Cloud Customer Cloud Service Provider(s)

4 | © 2015 Infinera Growth in Capacity, Users and Connections  Annual IP traffic is expected to reach a record two zettabytes by 2019, growing at a compound annual rate of 23%.  The number of Internet users will jump from 39% of the global population in 2014, to 51% in  There are expected to be 24 billion connected devices by 2019, or just over three connected devices per user.  IP video will make up 80% of all global IP traffic by 2019, an increase from 67% in  Cellular connections will make up more than 14% of IP traffic in 2019, while WiFi connections will account for 53% globally. Cisco Visual Networking Index 2015 Metro-only traffic will grow nearly twice as fast as long-haul traffic from 2014 to Metro-only traffic (traffic that traverses only the metro and bypasses long-haul traffic links) surpasses long-haul traffic in 2014, and will account for 62% of total IP traffic by 2019.

5 | © 2015 Infinera Optical Trends  Optical software revolution – SDN/NFV Programmable optical networking  Faster adoption of 100G than expected driven by long haul and DCI  Expected rapid adoption to 200G/400G and beyond More coherent networks Broader range of modulation formats  New optical networks are being built Mobile (Fronthaul/Cloud-RAN) DCI networks (cloud operators)  Changing dynamic in the optical industry Web 2.0, mobile… SDN/NFV 100G 200/400G C-RAN DCI Web 2.0

6 | © 2015 Infinera Operating Expenses (Persons per Server) Time to Revenue Operational Complexity (Number of Configurations) Why SDN / NFV? TELCO: Thousands configs seconds TELCO: Months 1 per 10,000 TELCO: 1 per configs

7 | © 2015 Infinera Changing Service Providers’ Opportunities  Business models are changing  Consolidations in the industry  Pressure on telecom business model Different business options need to be evaluated Source: Telco 2.0

8 | © 2015 Infinera More traffic stays in the metro CentralizedDistributed Source: Bell Labs Report  More local services available  More bandwidth in the metro  More local services available  More bandwidth in the metro Content closer to the users – distributed metro with distributed cloud

9 | © 2015 Infinera Cable – NGN Remote RF SDN / NFV Controlled Network  More 10G Ethernet in the aggregation network  Video content moving out  Virtualization of control and communication services Source: Gainspeed  RF modulation moving out – becomes Fronthaul like  DOCSIS processing is moving out  Shorter cable runs/fiber closer to the customer  Fewer users per segment/more bandwidth per user

10 | © 2015 Infinera Fixed – What if we move the BNG functions to the OLT?  Move data plane of subscriber management to a distributed point in the network  Core and metro aggregation networks becomes closer  Multiple connections of higher bitrate  Flattened aggregation network  Meshier metro aggregation network  Central office consolidation  Virtualizing the services Source: KJP

11 | © 2015 Infinera vOLT  Everything but the MCs can be virtualized  And moved to NFVI running over standard:  Fabric Switches  Storage  Servers vCPE  CPE replaced with a simple switch  Functionality that existed on CPE virtualized and moved into the Central Office Source: AT&T Central Office goes Data Center

12 | © 2015 Infinera  1-10 Gbps connections to end points in the field (i.e. not theoretical maximum)  1 millisecond end-to-end round trip delay (latency)  1000x bandwidth per unit area  90% reduction in network energy usage Mobile – 5G Technology Requirements Source: GSMA Internet Core Network 5-10ms if in the same country as the customer 1-2ms4ms Content > 0.5ms LTE – min 10ms 5G service sub-1ms

13 | © 2015 Infinera Macro to Micro Data Centers for MobileCloud Ref: mcn DCI networking Fronthaul DCI networking (Backhaul) DCI Longhaul Source: MCN

14 | © 2015 Infinera NFaaS (Network Function as a Service)  Simplified architecture  S pecialized middle boxes are replaced with common hardware i.e. uniform infrastructure  Reduced CapEx  Specialized components are replaced by common hardware and open source software  Decreased OpEx  Through automation  Flexibility  Through infrastructure virtualization and the ability to manage functions at the service level Source: ONOS Infinera

15 | © 2015 Infinera Metro Network Evolution NPO 3.0

16 | © 2015 Infinera Service Provider Networks are very alike Ring, hub and spoke, or mesh topologies Access Carrier Ethernet Over Fiber Metro WDM Carrier Ethernet Over Fiber Access specific technology  Wireless Carrier (CPRI, or Ethernet Over Copper/Microwave)  MSO (HFC)  Telco (Copper/Microwave) Fiber all the way to the home, building, tower or proprietary stuff in between Virtualize as much stuff as possible via NFV (Routers, Switches, CPE), virtualize control plane via SDN

17 | © 2015 Infinera Metro networks are changing in the way they need/will need to be built Metro Network Evolution  Converged cable, broadband and mobile architecture  Higher bandwidth in the access means more 10/100G in the metro  More traffic stays in the metro  More switching/flexibility/aggregation (L0/L1/L2/L3)  Diverse/new application sets  SDN with separation of data-plane and control-plane  NFV for services (virtualization)  More open source/collaboration in the Industry  More/new business models developing around software  Packets (IP/Ethernet) is dominating Introduce the NPO 3.0 network architecture

18 | © 2015 Infinera Objectives of NPO 3.0  Centralize Continue to decouple software capabilities from the network elements Ease migration to new hardware architectures  Virtualize Continue to expand upon our SDN strategy Simplify standardization and addition of new applications  Automate Continue to elevate our network awareness from L0-L3 Consolidation of network control into single unified control plane  Advance Continue our move to next generation Optical architectures Move beyond 100G and to next generation network architectures

19 | © 2015 Infinera Key components of NPO 3.0

20 | © 2015 Infinera Thank you