Communications networks are changing at an unprecedented clip. Proprietary systems within the network designed with a single capability are starting to give way to those constructed on compute platforms built on open standards, thus allowing for interoperable products and the flexibility to provision multiple services through software. This technology shift represents nothing less than a sea change in how networks are being designed, built, and run. But just as significant—and perhaps no less dramatic—is the shift in business models for the service providers and OEMs, and systems integrators. Telecommunications executives need to evolve their business decision making to embrace the possibilities of cloud and software-based services in this new paradigm. For more detailed information on this topic, tune into the Network Transformation podcast series. For more detailed information on this topic, tune into the Network Transformation podcast series.
New business models
Service providers are increasingly looking to lower the costs of acquiring new technology. What’s been learned from the world of IT is that a greater number of vendors reduce the cost of technology acquisition. There is also a requirement for systems integration between the actual network and networking equipment based on these underlying platforms. That’s changing the landscape as classic IT vendors are taking a more deliberate stance in the provisioning of networks, while OEMs are looking for opportunities to apply their assets in the enterprise network and the data center from a networking perspective. The lines between the data center and the public network have blurred.
The business model shift is seeking greater return on capital investment because of lower cost of technology acquisition, and shifting services away from mere capacity and connectivity to ones that benefit from more granular data that can be tailored toward the experiences provided to the end user.
Obstacles to overcome
Perhaps the greatest challenge facing telecom service provider executives today is maintaining the high degree of service availability and reliability that they’ve staked their reputations on, whilst embracing a new set of technologies that provide much promise to address cost and revenue challenges. This is a pronounced shift. To mitigate this challenge, I recommend these executives embrace the developing ecosystem, and work with the suppliers and purveyors of technology taking significant leadership roles in proving the quality, interoperability, and flexibility required in new platforms. Collaboration is needed to develop the proof points and really show what’s possible in this new paradigm.
China Mobile and Korea Telecom, for example, have been very progressive in implementing a new form of radio access network called CRAN, or Cloud Radio Access Network. They’ve pooled the baseband processing from the base stations to a central location on the network to get a much greater economy of scale in the processing capacity required at each of their base stations. To do that, they are working with us and other technology providers, infrastructure suppliers, and software companies to realize what can be achieved in a new deployment.
This partnering and collaboration on the part of a mobile operator, and the embracing of new suppliers of different elements of the network is key as multiparty development effort is required to allow this level of change to occur.