Blog » Software and Cloud are catalysts for Innovation in Telcos
Monolithic hardware-centric communications networks are passé. Several upcoming technologies, like 5G and Internet of Things (IoT), demand an agile, flexible, and programmable network that is easily scalable and adaptable in line with the evolving needs of the new-age customers.
The traditional approach of just adding the new components on top of the network’s existing infrastructure is no longer sustainable in the face of ever-increasing demand and a new range of services, like video streaming and driverless cars. The legacy hardware-driven networks are incapable of executing new and innovative use cases, like Virtual Reality, Augmented Reality, Smart City, and Industry 4.0.
Software is all set to be an active participant and enabler of network transformation to meet the new increasingly complex requirements. Increased network efficiency and agility are crucial to ensuring network economies of the future and delivering on the customer experience promise.
Growing consumption of video and multimedia services and the increasing dependence on the internet for conducting several professional and personal tasks means that the legacy infrastructures which were primarily designed for voice traffic are unable to address these changing requirements.
In the present-day scenario, the telcos are recording a surge in the consumption of data significantly because of increased adoption of online platforms to prevent the spread of COVID-19 pandemic. With the growth in the number of subscribers and the usage per subscriber, the telcos must transform the networks to support new-age use cases and services. There is a strong need to transform their traditional networks with open software-powered technologies.
Taking this thought a step further, it can be said that software and Cloud is an enabler of innovation in the communications networks. Here are a few ways that software and Cloud promote innovation in the Communications Service Providers’ (CSPs) network:
The Cloud Story
Last year, AT&T entered into a landmark deal with Microsoft, wherein the two companies will apply technologies, including Cloud, 5G, and AI. As part of the agreement, AT&T will migrate “most non-network workloads to the Public Cloud by 2024. This initiative will allow AT&T to focus on core network capabilities, accelerate innovation for its customers, and empower its workforce while optimizing costs.”
Typically, the communications networks are based on service dedicated platforms and tight integration with vendors. The changing economic model is driving the service providers to use Cloud for better operational efficiency and improved quality. The Average Revenue Per User (ARPU) is forever declining for telcos in most geographies. Further, the growing use of data services demands an increase in capital and operational expenditure, which brings down the margins and profitability.
Besides, the pace of technological innovation has gone up significantly, which means that the telcos are constantly under pressure to introduce newer services and products. Originally, the networks were designed to offer just voice services. The changing ecosystem means that the adoption of telco clouds is imperative to ensure that the service providers are able to take full advantage of the new opportunities.
Cloud enables telcos to transform their network for greater agility and bring down the cost and also allows them to efficiently work with multi-vendor solutions. Cloud architecture will enable telcos to create new synergies and opportunities between telcos and enterprises, creating a stage for innovation.
Software-Defined Networking (SDN) and Network Functions Virtualization are an intrinsic part of the network transformation and promise to fundamentally change how networks are planned, build, and managed. It transforms the network for a more flexible, scalable, and open network.
Decrease OpEx and CapEx by reducing dependency on proprietary hardware and providing virtualized network functions on standard, high-volume hardware, as well as through automated and simplified operation of load-based resource allocation, fault avoidance, and recovery.
Overcoming Vendor Lock-in
The traditional networks are expensive and thus are not sustainable and scalable in the new era of connectivity that includes adding 50 billion devices to the network. For this reason, service providers are moving towards networks that are based on open reference architectures from a multi-vendor ecosystem.
By default, software-driven networks are open networks, interoperable, and avoid vendor lock-in. What this means is that the telcos use the best gear instead of being forced to use the solutions from a particular vendor because of vendor lock-in.
The Auto-scaling Angle
There has been a growing adoption of cloud computing because it leads to improved efficiency, accessibility, and scalability. Autoscaling is a crucial component of cloud computing, allowing communications service providers to automatically scale their computational load up or down as per the customer’s demand.
As the number of subscribers increases, there is a growing element of uncertainty about the usage. The sudden popularity of a new game or an app, like Houseparty or Zoom, can see the data usage skyrocket. Lockdown to prevent the spread of COVID-19 can lead to an unanticipated increase in data consumption as people move to online platforms to carry out several personal and professional tasks. It is tough and, more importantly, expensive to plan for these peak demands. On the other hand, with the Cloud’s auto-scaling capability, the telco can pay for what it needs. This way, the service provider can provide for a growing number of users without investing a considerable amount. It is a win-win proposition.
Apart from considerable cost-benefit and ease of network management, increased use of software and Cloud helps the telcos in setting the base for innovation. Being out of vendor lock-ins and with interoperable and agile network infrastructure allows CSPs to include open-standard, open-platform solutions, and services. The use of software and cloud will allow operators to leverage virtualization to add new revenue streams and to transform themselves into Digital Service Providers, especially in the wake of upcoming new technologies, like 5G and IoT.