What would an open networking model really mean? I don’t mean from the perspective of the finances of operators or vendors (that’s obvious at the high level, and complicated enough to warrant a special blog at a lower level). We need to think about what would happen to networks and services if operators had open platforms and greater control over the technology behind innovation. That’s what’s likely to impact users, and also to shape the broader competitive environment to the point where we can then think about that side of the question.
If we had truly open devices, things like the white-box nodes that AT&T’s dNOS and ONF Stratum envision, it would offer three symbiotic benefits to operators. First, this sort of technology would cut the capital cost of network devices by about half, according to my model, and in some cases even more. Second, the software-driven approach would offer a more agile response to service opportunities that required some form of network technology change, and finally the operations model would be lower-touch and thus improve margins on services overall. The future is likely the sum of these forces.
Cheap boxes are important because they facilitate the transformation of infrastructure. If a new device is a bit cheaper than an old one, then the differential won’t cover much in the way of write-down cost. You’d need to depreciate the old gear to zero. On the other hand, a massive benefit in capex could justify faster displacement, which means that you’d see the other fruits of an open infrastructure quicker. Think of this as a “facilitating force”.
The pie-in-the-sky value proposition for openness lies in the second point. Operators have been complaining for literally decades that vendors stifle innovation and discourage change because they fear loss of near-term revenues. Even a fat 2019 won’t satisfy companies when the Street wants results in the second quarter of 2018, so nobody trades much of the present for a rosy future. Thus, new service models tend to be framed in old-infrastructure terms, and that obviously limits how revolutionary the services could be.
The third point is the bridge point, the thing that creates the near-term momentum that the first point needs in order to reach the value proposition of the second. It’s nice to have “agility” if you know you want to dance or swim or climb, but without a specific mission to do any of these things, it’s hard to put a specific dollar value on the feature, or even prepare for a specific application of it. Operations costs, on the other hand, are a right-now problem whose solution yields right-now benefits.
I think that the first and last of our value propositions for openness would be enough to drive operators in that direction, but the appeal of the future revenue opportunity story is undeniable. You cannot postulate cost reduction below zero, but with new revenue the sky’s the limit. The only problem is that we’ve spent decades postulating new revenues from new services and always end up with either nothing useful, or with a service that’s useful to the extent that it’s cheaper, earning operators less rather than more. Or suppose you had a service that connected on demand, people ask. Well, you’ve just invented dial-up telephony.
New services are likely to be overlays on more traditional transport models, though eventually new models like optical/SDN tunneling will emerge. The problem with these new models leading the charge is that they don’t deliver anything really different except, perhaps, cost. We already know users will buy cheaper stuff, but also that sellers aren’t interested in modernization based on losing revenues. The overlay models may or may not use classic protocol-overlay tunneling, but they’d be logical overlays in that they could represent special feature sets built on top of connectivity.
SD-WAN-like services are a good example of a future opportunity. With the open framework of networking, you could host SD-WAN functionality as-is in edge devices, but you could also conceptualize a new model where interior features and elements work with edge elements to create the service. An example of this would be by-name routing, where users and application components register their presence by name (with proper authentication) and are then connected that way, without the need for an “address” in a conventional sense.
You could also do distributed publish-and-subscribe services that way, and of course there are literally hundreds of potential event-and-IoT-related service opportunities. In fact, the notion of a connection service that’s built starting with what gets connected instead of what does the connecting would be a refreshing and probably compelling broad model.
It’s also very easy to imagine the new service layer being aimed at what could be called “logical distribution”. Hosted features and hosted content are two sides of the same (hosted, obviously) coin. If pathways and cache points are simply missions for whatever devices happen to be in a given place, then you can compose content delivery in a completely different way, with better results.
Or 5G and some of 5G goals? Think about logical connectivity and its relationship to roaming, to jumping between WiFi and cellular, or cellular and satellite. The fact is that 5G introduces a lot of complexity in the name of simplicity. You don’t need a lot of the layering if all the networks have the same agile framework, and if there’s a logical-connection overlay. One layer fits all, and in the broadest sense what we’re talking about is an open model to build that one layer.
There are an enormous number of possible ways that higher-layer services could evolve in an open model, including of course the way that leads to nothing evolving at all. I’m doubtful that will happen, because the SDN community, the SD-WAN community, and the IoT community will all be thinking about what’s happening here. Vendors, including Amazon, will be pondering the fact that a framework where content and network features are co-equal is also a framework where hosted functions and network features are co-equal. If transport is the only secure service for network operators, if everything else is up for grabs from every quarter, somebody will get greedy.