While there has certainly been a lot of interest in what the next-generation infrastructure of operators might look like, there’s some indication that operators are thinking less about infrastructure these days. Transformation is still their goal, but more and more are setting their sights higher than the network, and this could have a major impact on network and service evolution over the next five years. There are ## critical aspects to the current trend, and I want to explore them briefly here.
The first big thing driving a higher-level view is an operator realization that mobile services are probably where their real opportunity for new revenues and significant cost reduction lie. There are still operators interested in more systemic infrastructure changes and in business services based on vCPE, but what I’m hearing is that more and more now realize there isn’t going to be enough money on the table for this kind of service to pay off in improved profits.
Mobile services, as I’ve pointed out often, are inherently contextual, something that ItsOn, a recent winner at Telefonica, highlights on its website. You can do a lot with mobile services by recognizing more things about the customer and then reflecting those new things as a contextual framework into which you could deliver ads and services. The beauty of this approach is that it’s a service overlay that’s loosely tied to IMS for customer information but that doesn’t require much integration with or changes to the rest of the mobile network.
A few operators are also seeing the natural connection between contextual mobile services and IoT. While operators are probably more guilty of being 4/5G-connection-revenue-focused in their IoT plans (I’ll bet we see that reinforced at MWC) than even vendors, a small number realize that heady forecasts of billions of new devices in three or four years is just smoke. This group is looking for the real value of IoT, and that real value is in IoT’s ability to enrich the notion of context.
Verizon’s interest in Yahoo might well be another indicator of this trend. If contextual mobile services are the way of the future, you need to be able to exploit them as directly as possible. Operators have wanted to get into the ad business, which is what funds the OTTs, for a long time. Context combined with Yahoo? Could be big.
The second big thing is that OSS/BSS has as big an inertia problem as the network does. Most operators have wrestled with the question of whether operations systems could be transformed or whether they should just be trashed in favor of something new. Some of the mobile-service contextual trends are showing operators that you can add web-like service overlays on mobile broadband in particular without even having much impact on operations systems. In fact, the current drive to contextualize mobile services seems largely disconnected from the OSS/BSS as well as from the network.
This opens a new vision of “transformation of operations”. Instead of trying to do a fork-lift there, which operators are finding is just as impractical as a network fork-lift, you surround your operations systems with a lot of service-overlay technology and let what remains wither on the vine. Whether the goal for OSS/BSS transformation is simplification or replacement, reducing the things you’re depending on these systems for in transformation terms makes the evolution of operations easier and less risky.
The third big thing is that integration of NFV based on the current state of the specifications is not going to be practical. It’s not that you can’t do it, but that the steps that are involved are much more work than operators had expected, and the results are likely to be a lot more brittle. The story I get on Telefonica’s much-discussed integration RFP is that the operator has been confronted with costs much higher than they had expected because the work involved is much more complicated.
Paying for integration isn’t unreasonable when you get something helpful, but the problem with NFV is that VNF and resource openness are simply not properly accommodated in the architecture. I think the operators themselves know this and are trying to drive the NFV ISG toward a different approach (intent modeling and a specific service-model-driven vision of management and orchestration) but by their own admission they can’t expect more than “significant progress” this year. That’s just not fast enough to help operators deal with their imminent revenue/cost-per-bit crossover.
Thing number four is that SDN and optical networking can combine to create a revolution of their own, perhaps a bigger one than NFV could. I’ve always believed that NFV could be the senior partner of the SDN/NFV pairing, but the limitations in the NFV model have limited the extent to which NFV can deploy and have rendered the support NFV might offer to SDN moot. In the meantime, operators are starting to see ways where SDN grooming can combine with agile optics to create a virtual-wire-network model that would itself be more agile and operationally efficient, and that this model might then create an opening for NFV to be used to deploy switch/router instances.
Two of the six vendors who could make an NFV business case are primarily optical network equipment players, and two more have optical capabilities along with other network elements. One of the signposts to watch for on the optical-and-SDN path is whether Nokia drops Alcatel-Lucent’s tendency to protect its routing/switching business at the expense of its (excellent) SDN product. If we see more optical/SDN-centricity in Nokia, it’s a sure sign that this is going to be a real driver for change.
We probably have the most disorderly Presidential political scene in living memory, and we may have a similar level of disorder when it comes to transformation. The casualty of all of these things/trends is the notion that a technology is going to change everything. I think that things like ONOS/CORD/XOS are going to offer pathways to unite a high-level vision of change with SDN and NFV, but I think the opportunity for SDN or NFV to drive the bus by themselves are gone. The network will not transform internally, but because of external pressures from the top—service revenue opportunity shifts.