Telcos look to turn themslves into ‘cloud-natives’

By VARINDIA - 2020-04-03

Telcos look to turn themslves into ‘cloud-natives’

The Indian telecoms market is proving to be a tough place to operate. Carriers are burdened with high spectrum licensing costs; operating costs continue to grow and there is a constant demand for investment in new infrastructure. And compounding this, ARPU (Average Revenue Per User) in the Indian market is unlikely to significantly increase anytime soon.

 

Nowhere is this more prevalent than in the broadband Internet market. Subscribers are consuming more and more data over their Internet connections, from online TV to accessing cloud-based applications. Users expect telcos to deliver all of this traffic, but they don’t want to pay any more for their broadband connections. Much of this traffic is delivered using CDNs (Content Delivery Networks) that hold copies of popular content in servers embedded around the network. This mitigates investment in the core of the networks but it doesn’t help in the access networks, which are consuming ever more investment.

 

So, the business of delivering a profitable telecoms service is getting harder. Restructuring, reorganisation and efficiency drives can only get Indian network operators so far. Something has to change. Fortunately, it is about to.

 

The telcos have seen how the giant ‘cloud-natives’ have found new ways to operate their businesses. For example, AWS can add as much new infrastructure in one day as it had in its entire operation when it was a $7B revenue business. A single ‘cloud-native’ engineer can operate 10,000 servers. And they can drop a new service onto their platforms with relative ease – like adding Facebook Chat for 2 billion existing users. These are metrics that have seemed unattainable in the telco space – until now, that is.

 

Unlike telecoms providers, these cloud-natives build their infrastructure using open off-the-shelf hardware, running independent software, and deployed using zero-touch-provisioning systems. Conversely, the only way to deliver the levels of throughput required by carriers has been to use monolithic systems from a single vendor, based on custom silicon with integrated software. That’s why, in high-scale networking, software and hardware have always been intrinsically linked. Consequently, telcos find themselves in a perpetual hardware replacement cycle, as each element of the system is upgraded in turn, without the ability to break-out of the system investment that they are locked into. They can’t select the best hardware and the best software independently – equipment selection is always a compromise between the two. And investment in equipment is escalating faster than revenues.

 

One solution to this problem, analogous to way the cloud-natives build their data centres, is known as network disaggregation, which in simple terms means buying network software separately from the hardware.

 

This shift has been enabled by the arrival of so-called merchant silicon. Silicon vendors now have the equivalent capabilities on their high-volume, low-cost networking chips that the traditional network equipment vendors used to have in their customized systems. This merchant silicon is being used to build a new category of powerful low-cost ‘bare-metal’ switches, often constructed on the same outsourced assembly lines that manufacture the traditional router systems. These switches are a fraction of the cost of conventional telco switches and routers, but just as powerful.

 

That’s all very well for the hardware, but what about the software? Well, that’s where a host of new companies are entering the market. They provide routing software that turns these bare-metal switches into IP/MPLS carrier routers, often specializing in different areas of the network, such as broadband access, edge and core. The approach that most of these new software providers is taking is very much like those used by the massive cloud-native IT giants. It offers carriers the potential to turn their operations into something that resembles those inside the cloud-native companies, rather than a traditional telco. This new generation of telco software runs in the same environment as data centre infrastructure - inside a software container on a Linux operating system on the switch. Both hardware and software can be deployed using zero touch provisioning. Now, operations staff can deal with a single homogeneous equipment and operating environment, regardless of the software running on it, instead of being trained in multiple vendors’ systems and processes.

 

As well as reducing costs, the service providers now have the opportunity to mix and match hardware and software vendors. This makes it possible to upgrade the capacity of any dimension of the system, within minutes, without throwing away the existing infrastructure. It also accelerates innovation for new services and additional competition from vendors will drive down costs even further.

 

So, as the operators deploy these new network architectures and disaggregating hardware from software, they will start seeing some huge benefits:

 

· They will have access to much lower cost hardware – per port costs are a fraction of those of traditional systems.

· A bigger choice of software and suppliers will make it faster to deliver new features and services, as well as driving down costs

· Open standards and Web2.0 tools make the whole system easier to automate and to operate at larger scale without increasing staff

 

These disaggregated network systems can replace many functions within a telco network, from core and edge routers to Broadband Network Gateways. And, along with a cloud-IT toolset to operate the networks, disaggregated systems are a fundamental part of the way telecoms operators are set to transform their operations to match the agility, simplicity and cost-levels of cloud-native infrastructure.

 

So, whilst the revenue outlook for Indian telecoms operators may remain cloudy, there is at least some good news on the horizon when it comes to costs. Expect to see telco’s everywhere talking a cloud-native approach to their networks.

 

Pravin S Bhandarkar
Founder and CEO, RtBrick


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