Communication Networks: Compete or Cooperate?
Telco operator networks will mostly have a mix of equipment and software from multiple vendors. This was a deliberate choice to provide redundancy to avoid a single point of failure – we all understand the severity of communications network breakdowns, even a few hours of outage can create havoc and bad PR. The complex networking gear and software from multi-vendors throws up interoperability challenges for operators. Moreover, launching a new network service is becoming increasingly difficult & often requires yet another variety and finding the space and power to accommodate these boxes; compounded by the increasing costs of energy, capital investment challenges and the rarity of skills necessary to design, integrate and operate increasingly complex hardware-based appliances. Off-late, hardware-based appliances rapidly reach end of life, requiring much of the procure-design-integrate-deploy cycle to be repeated with little or no revenue benefit. Worse, hardware lifecycles are becoming shorter as technology and services innovation accelerates, inhibiting the roll out of new revenue earning network services and constraining innovation in an increasingly network-centric connected world.
Three major trends are heavily influencing the Telcos recently:
Network Virtualization
First and most important being the Virtualization “bug” – Network Virtualization (NV) is part of what can be termed as a revolution that is taking place in the Telco operator community. Everybody is busy exploring & exploiting software-defined networking (SDN) and network functions virtualization (NFV) concepts. It abstracts functions such as network connectivity and services that have traditionally been delivered via hardware into a logical entity. This concept of decoupled network runs independently on top of a physical network in a hypervisor environment which solves a lot of the networking challenges in today’s data centers & helps operators centrally program and provision the network, on-demand, without having to physically touch the underlying infrastructure. It involves implementing any network function in software that is traditionally sold with a physical box. Moreover, these virtualized software can run on a range of industry standard server hardware, and can be moved to, or instantiated in, various locations in the network as required, without needing new equipment installation. With NV, organizations can simplify how they roll out, scale and adjust workloads and resources to meet evolving computing needs.
Open Source Technologies
Second important development is the Open Source movement – a robust open source community that provides a melting pot for latest and the greatest tools, software and services for various stakeholders. For e.g. The Carrier Grade Linux (CGL) work group has two main functions. First, interface with network equipment providers and carriers to gather requirements and produce specifications that Linux distribution vendors can implement. Second, to take unimplemented requirements and foster development projects that will meet these requirements and assist in their upstream integration. Open Compute Project (OCP), Open Source MANO from ETSI, Open Network Operating System (ONOS), OpenDayLight (ODL), Open Stack Foundation et al are some of the key projects contributing to various pieces in the networking puzzle – right from Network Operating Systems to SDN Controller and Network Virtualization platforms to virtual network functions to Network Management software and applications.
Network Players Consolidations
Third key trend that is growing by the day is consolidations, M&A activity and various kinds of partnerships. Most notable one was the recent MOU signed by arch rivals like Cisco and Huawei. “Cisco Systems Inc., Ericsson AB, Huawei Technologies Co. Ltd. and Nokia Corp. signed off on a Memorandum of Understanding (MOU) to create the NFV Interoperability Testing Initiative (NFV-ITI,) which will support the Open Platform for NFV Project Inc. (OPNFV) project.” For more details check here. As technology continues to progress and standards evolve with time most OEM/NEM companies won’t have a lot of choice but to work together or be left out. It is not every day we get to see these companies co-operating for a greater good – more often than not they don’t always get along – unless it is either a question of survival or the opportunity is so large that these fiercely competing organizations are more than willing to work together. Any time a company tries to stay competitive while positioning themselves away from what they know the customer really wants, they’re setting themselves up to be flanked and shut out.
Every player in the telecom value chain – from silicon vendors to Network Equipment Manufacturers (NEM) and Independent Service Vendors (ISVs) to Service Providers – is trying to move beyond sustaining their existing portfolios to find new, durable and innovative revenue streams. Innovation, differentiation and disruptive ideas & business models are buzzwords across the globe. Operators’ networks are populated with a large and increasing variety of proprietary hardware appliances resulting in vendor lock-in. Integration of multiple virtual appliances from different vendors will be a challenge as operators may end up doing mix & match of hardware, hypervisor and software/applications from multiple vendors thus incurring significant integration costs.