As European operators face the prospect of a single EU market for telecom services (according to the Commissioner for Digital Affairs, Neelie Kroes) and most have already been having profit issues. It’s no wonder these operators are vigorously pursuing cost reductions and new services. It’s also not surprising, given their historical reluctance to be market-makers, that telcos would push cost reduction harder. But many are looking at new services, notably Telefonica, whose API programs are among the most successful globally.
Why haven’t more followed? Is it just “fearing competition more than seeking opportunity” as I’ve suggested telcos do? Or something deeper. After all, they’re seeing plenty of OTT competition now.
The biggest problem I see for operators is a lack of a service-layer vision that embraces IT and network equipment equally. Operators have IT people, but they tend to be on the OSS/BSS side rather than on the service side, and so where Google might have a bunch of web architects doing forward-facing projects, the operators’ vision of services is more introverted.
Operators have this problem, by their own reckoning, because of the second issue—lack of support for operator transformation among the big network equipment vendors. The operators have been critical of vendor support for half-a-decade now, and it’s reached far past the point of disenchantment to the point of active suspicion that vendors are pushing boxes instead of solving problems.
Obstruction is an issue, I think, but I’m not sure that the vendors should get all of the blame. Problem number three on the hit parade is operators are relying on traditional service processes to create non-traditional services. Pose a new-service challenge to operators and they think “Standards!” There may be standards involved in new services, but you can see a very significant difference between an OTT vision of standards and an operator vision. OTT/Internet standards tend to be viewed in a kind of “iterative” form, with prototype implementations and real-world testing creating refinements in the process until something is finally agreed on. In the operator world, you get a long series of discussions that almost never create anything that can be seen and run until the very end—if then.
Standards also create the final issue for operators, which is excessive focus on consensus-building rather than on innovation. Google or Apple would shy away from stuff that required consensus simply because you don’t get to lead a market while waiting for others to agree with your approach. Operators are used to trying to develop systemic services rather than innovative, distinctive, branded services. That means they don’t jump on opportunity, they try to develop it in a shared fashion.
The obvious question here, which is “How can operators fix these problems?” isn’t all that easy to answer. Clearly simply reversing all these problem areas would be a good answer, but that requires a level of systemic change in operator organizations that seems unlikely to come about. My view is that there are two critical things that could be done, and that would evolve into the future right answers.
The first thing is focus immediately on the creation of a true service-layer architecture, one that embraces the cloud, SDN, and NFV in one grand vision. What we have today among operators is a tale of three cities; cloud, SDN, NFV. The second thing is to start doing software projects and not standards. A software approach to cloud, SDN, or NFV would be top-down, would focus on functionality rather than interfaces, would presume the jumping-off points of cloud technology and web-service development…it would be a form of test and refine that would expose the right issues and offer the right answers by testing them in the real world.
Carrier cloud has advanced very little in two years, even though carrier deployment of the cloud has been impressive. Why? Because we don’t know exactly what it is. Carrier SDN has advanced little, despite the fact that there’s tremendous interest, because we’ve not taken the simple and logical step of presuming that it will target cloud deployments and focus largely in the metro. NFV gave itself two years to produce results when some of the founding operators had already noted their revenue/cost lines would cross in that timeframe. This isn’t the time to be looking back, gang. It’s the time to look ahead, then leap forward.