Home North AmericaNorth America II 2015 Mobile, Cloud & Broadband – How operators can play a key role on the Networked Society innovation arena

Mobile, Cloud & Broadband – How operators can play a key role on the Networked Society innovation arena

by Administrator
Peter LinderIssue:North America II 2015
Article no.:6
Topic:Mobile, Cloud & Broadband – How operators can play a key role on the Networked Society innovation arena
Author:Peter Linder
Title:VP Strategy & Business Development
Organisation:Ericsson, Canada
PDF size:221KB

About author

Peter Linder is one of the global Networked Society evangelists for Ericsson. A networking executive focused on strategy, marketing and sales challenges of modern business life. He is passionate about bringing together mobile, cloud and broadband in shaping new network architectures. He describes himself as a versatile visualizer, alliteration aficionado, movie maker and kinetic keynoter. He contributes weekly to Ericsson’s Networked Society blog and has fully embraced digital channels as a way for thought leadership communication. Follow him on @Networked_Soc and @OneLinders for further insights on the Networked Society.
Peter joined Ericsson in 1991 and is currently based in Dallas Texas. Born and raised in Sweden with an extensive international experience. As an extensive road warrior he has visited 188 airports worldwide and is passionate about Formula 1 racing. Currently exploring advanced self-development ideas under a digital mentoring program you can follow via @TweeterLinder.

Article abstract

Most other industries lack the technology knowledge operators have. Operators lack insights about the business models other industries operate with. Innovations created by combining network capabilities with industry application knowledge have high potential. These innovations require leaps forward in both the technology and the business model dimension.

Full Article

The transition to a networked society has large implications for operators. Mobile, cloud and broadband are the technologies shaping most industries’ technology agenda today. Industries innovate into a networked and digital transformation by leveraging these technology shifts. Innovative operators have a key role to play.
Mobile, Cloud and Broadband were the foundation for the most successful innovations this decade. Sophisticated mobile smartphones leveraging cloud based apps delivered via a broadband connection. Most of these innovations connected to each other in the networking industry. An industry where operators play a key role and the underlying foundation is solid. 3GPP outlined network architectures and evolution as an anchor point in the ecosystem. Business models for wireless connectivity are clear and proven both for WiFi and 3G/4G.
The next mobile, cloud and broadband wave will extend into a broader range of industries. Industries shaped by different market logics and ecosystems. Connecting the network ecosystem to all other industries ecosystems is a major innovation scene. Some ecosystems are global in nature and shaped by the global leaders in each industry. Others are more regional or local in nature where operators can play a key role in connecting industries.
An area of major innovation is the transformation of operator roles. Operators have three choices for the future. Continue to be a Service Creator with own service offerings. Refocus to become a Service Enabler, and provide a platform for service innovators. The third option is to become a Network Developer, focused on a strong connectivity proposition. All these roles require an innovative approach to be successful. In the most recent wave all operators operated as Service Creators. The next wave will call for larger change and a higher level of innovation as operators transform.
Mobility and Broadband are well known to operators. But the cloud represents a new field for most network operators. The data center arena has seen a high level of innovation over the last ten years. Major web service providers have created large data centers. These players have made an innovative leap to cloud infrastructure defined and designed in-house. Built on own hardware and own control software, based on extensive use of open source components. This type of cloud infrastructure can serve as a role model for innovative operators. Aggressive targets for cloud data center KPIs and technology choices beyond classic IT will be common.
Operators can consolidate their own IT operations. Using new infrastructure to free up capital tied to existing platforms. Two areas stand out as causing the largest pains. The first one is low utilization levels in own IT data centers. The second innovation area is to attack high financial burden from life cycle management of IT software. This is caused by custom design and extensive integration efforts. The cost of supporting the increasing and dynamic capacity demand need to decline. Consider consolidating own IT data centers to fewer locations with modern cloud based infrastructure. With standard refresh cycles of three to four years the majority of the installed base can be phased out during this decade.
The transition to Virtualized Network Functions (VNF) opens up new opportunities for operators. A software centric world designed for daily builds rather than yearly upgrades. Resulting in an ability to upgrade networks in smaller steps and shorter intervals. This evolution path creates a strong innovation platform. Operators can transform their business systems and become an agile partner other industries need. This transformation affects the networks as well as the OSS/BSS systems. You do not become innovative by becoming fast but you can never be innovative and slow in the new world.
VNFs use distributed data centers, different from today’s centralized IT data centers. The performance critical nature of these applications will not go away overnight. Operators can use the same modern cloud infrastructure to get synergies between different clouds. The proximity to users is vital for data centers hosting VNFs. VNFs require a more robust platform than plain OpenStack implementations. Therefore the OPNFV initiative has been created to enable a robust platform for VNFs. A high level of innovation takes place where IT and network technologies meet. All driven by the most demanding applications, i.e. network functions.
The IT and network industries have been operating on remote ends of the spectrum in a few vital areas. Standardization on network/architecture level is the norm for networks, e.g. 3GPP. Smaller well defined blocks are the norm for IT. A mix of commercial and open source software is the foundation for IT. Networks rely on commercial software. US$1 of integration services for every US$2 of software can be a thumb-rule for networks. IT is more integration heavy with up to US$10 in integrations services for every US$2 of SW deployed. Networks are upgraded once or twice per year, where the DevOps model used in IT is operating in shorter cycles. The innovation required to bring these two worlds together is a major innovation field. Operators and their partners define the transformation path to this new architecture.
Half of all data assets in the world were created in the last two years. And the pace is accelerating as we move from data to video centric and big data assets. This is the third area where we can expect operator innovation. This innovation is about storage intensive cloud applications. As for internal IT and Network Functions, the storage innovation arena is a possible area for operators to address. So far most of us see the cloud as consumer centric for application access from smartphones and computers. The expansion of visual and industrial internet applications changes the demand on the cloud. The expanding dynamic data volumes and their need for a higher level of security are game changers. The icing on the cake will be the transformation of our office environment from a hybrid fixed and mobile to a mobile only game.
The fourth and final area of cloud innovation operators can pursue is the creation of mega data centers. A strategy realized as a complement to the three options above. Mega data centers are transforming the cost of cloud capacity from the ground and up. This is less about operators driving innovation and more about leveraging existing cloud innovations. Hyperscale architectures focused on maximizing price/performance ration. And not forgetting how the created capacity competes with established commercial cloud alternatives in this field.
Most other industries lack the technology knowledge operators have. Operators lack insights about the business models other industries operate with. Innovations created by combining network capabilities with industry application knowledge have high potential. These innovations require leaps forward in both the technology and the business model dimension.
A lot of the innovations will be born in a collaborative environment. Collaboration across ecosystems is a central part of the innovation efforts. Operators selecting a Service Enabler or Service Creator strategies will rely on collaborations. The nature of these market shift and breadth of opportunities is big. Even for large multi-national companies. Both extensive inter- and intra-company collaborations are vital to succeed.
An interesting conundrum is to build innovations and new businesses in an existing company. This challenge is not unique to operators, but applicable to any large organization. Other industries need to transform their core business to become networked and digital. In the same way operators need to transform to be an attractive partner in serving them. Other industries have a large hurdle in understanding the technology shifts. Operators sit in the middle of the technology shifts with first hand insights. With this knowledge operators become an attractive partner and sounding board to other industries.
In this scenario operators build up their front-line innovation and business development capabilities. Operators leverage their network partners to design and evolve networks towards high performance goals. The complexity in evolving the network is evolutionary in nature. The evolution to 5G is a radio expansion rather than a new overlay. Broadband is moving from hardware centric to software defined capabilities. And data centers are moving towards cloud based hyper scale architectures. The balance between operator innovation and network transformation ambitions are central. Innovation and the front will come at the cost of less people building and running networks.
A high level of network automation creates an agile network with low need for humans operating it. Operators plan for an evolution with reduction of current staff levels. And on top of that a significant re-distribution of capabilities and skill-sets. This is a large effort in itself as the network will go through a large transformation cycle.
This new innovation agenda requires human capital injections. It also needs lean start-up inspired business systems inside operators and their partners. The biggest challenge for any business in the networked society comes down to you and me. Are we ready to embrace and drive our personal change? How do we best mix current staff with injections of external competence? Are we ready to work with innovations and work ourselves through the grey-zones towards clarity? Consider so, the future journey in the Networked Society is an exciting one based on change and innovation.

Related Articles

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More