The new generation of 5G mobile services place stringent requirements for cellular network operators in terms of latency and costs. The latest trend in radio access networks (RANs) is to pool the baseband units (BBUs) of multiple radio base stations and to install them in a centralized infrastructure, such as a cloud, for statistical multiplexing gains. The technology is known as Cloud Radio Access Network (CRAN). Since cloud computing is gaining significant traction and virtualized data centers are becoming popular as a cost-effective infrastructure in the telecommunication industry, CRAN is being heralded as a candidate technology to meet the expectations of radio access networks for 5G. In CRANs, low energy base stations (BSs) are deployed over a small geographical location and are connected to a cloud via finite capacity backhaul links. Baseband processing unit (BBU) functions are implemented on the virtual machines (VMs) in the cloud over commodity hardware. Such functions, built in software, are termed as virtual functions (VFs). The optimized placement of VFs is necessary to reduce the total delays and minimize the overall costs to operate CRANs. Our study considers the problem of optimal VF placement over distributed virtual resources spread across multiple clouds, creating a centralized BBU cloud. We propose a combinatorial optimization model and the use of two heuristic approaches, which are, branch-and-bound (BnB) and simulated annealing (SA) for the proposed optimal placement. In addition, we propose enhancements to the standard BnB heuristic and compare the results with standard BnB and SA approaches. The proposed enhancements improve the quality of the solution in terms of latency and cost as well as reduce the execution complexity significantly. We also determine the optimal number of clouds, which need to be deployed so that the total links delays, as well as the service migration delays, are minimized, while the total cloud deployment cost is within the acceptable limits.
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