Sector Series: Software in Telecoms

This is the first part in a series of posts aiming to illustrate the opportunities of leveraging modern software in different sectors in the market. By understanding what is going on “under the hood” in these sectors, interesting differences and commonalities emerge.

Software is eating the world!

– Marc Andreessen, Wall Street Journal, 2011

With the risk of stating the obvious, our claim is that modern software is key to successful Digital Transformation. But we’re mindful this is (1) only possible with highly compelling hardware and cloud platforms and (2) it needs to be accompanied by other components such as building a good plan, developing skills and experiences and driving positive change with senior management support.

For us, at Ammeon, it is natural to start this sector review with telecoms. Collectively we have thousands of years of experience delivering software into this space

Telco & software – Isn’t it all about cell towers and racks of hardware?

From the outside, the telecom sector may seem slow considering regulatory requirements and standardization. But looking under the hood you realize how this sector keeps breaking ground by creating enabling technologies with critical scale, performance, quality, reliability and security characteristics. As consumers, we have come to expect that our connectivity must work. Always. And standardization has ensured interoperability and thereby scale. As well as significant cost efficiencies which in turn has enabled wide-scale adoption. The iPhone would not be what it is today without the innovations in telecoms providing such a high-performance network platform. Thus, as an industry, telecom has seen tremendous innovation for decades, to the extent a wireless connection now offers hundreds of Megabits Per Second of speed. Accessing the internet is often faster without a cable than with a cable!

Increasingly software is key to progress in this sector

Mobile Radio Network – moving to 5G

The mobile network has traditionally been heavily performance and cost-optimized given the requirements of large volume deployments of physical sites for coverage.

New developments in 4G and 5G bring virtualization technologies to the mobile network. Smart software makes better use of spectrum and ensures hyper-efficient network performance and network operations.

More recently the software-based radio network enables new deployments such as 5G for industries and manufacturing. The pace of innovation is increasing with the introduction of vRAN / virtual RAN (Radio Access Network).

Mobile Core Network – moving to 5G

The mobile core network has been at the forefront of embracing virtualization, with early consolidation of software functions in data centres and large-scale deployments using cloud technologies like Open Stack. The core network is now developing towards a “cloud-native” paradigm with unprecedented flexibility in development and deployment, powering further innovation. Software-based “network slicing” promises to offer even better Quality of Service (QoS) for critical enterprise use cases such as automotive and healthcare.

Fixed Network – deploying fiber and embracing SDN

The ‘fixed network’ has developed with step-function improvements over the past years. New last-mile technologies over copper and fiber now deliver gigabits of speed. Switching and routing networks have embraced increasingly sophisticated Ethernet, IP/MPLS and Security technologies in software on high-performance silicon. More recently software-defined network (SDN) technologies have become ready for commercial deployments. Software is instrumental in integrating and managing these networks.

At the far end of the fixed network, whether at home or at the office, we often find a Wi-Fi wireless network where advanced software ensures high performance and great user experience even when we’re in a congested, high ‘noise’ environment (Wi-Fi operates in shared spectrum environments). Some Wi-Fi deployments now experiment with advanced software technologies for indoor location, security and analytics in enterprise use-cases.

OSS/BSS systems

Across these networks that deliver high-performance connectivity, operators and enterprises require a software backend that delivers business support functions such as network monitoring and management, analytics and optimization as well as customer-facing functions such as billing. As operators merge across geographical boundaries and converge mobile and fixed networks, the need to consolidate data and back-end platforms increase to ensure efficient operations. Manual network management based on statistics and KPIs is replaced by sophisticated algorithms for self-healing and self-optimizing networks. The use of “AI” in network operations ensure performance and significantly reduces OPEX and to some degree CAPEX.

“Orchestration”

With all these legacy systems, new technologies, different vendors and services, the need for “orchestration” arises. Several proprietary, as well as open-source initiatives, aim to deliver seamless configuration and automation of disparate network infrastructure elements and services. One example being ONAP, going through a maturing phase similar to the early days of Open Stack. The jury is still out on what open platform will succeed beyond each major vendors’ network management system. But the consensus view is still that a high degree of software-based configuration (“programmability”) and automation is key to efficient telco network operations.

Services and Internet of Things (IoT)

Our networks have moved from providing basic connectivity services to offer more advanced services. NMT and AMPS had voice calls as killer application. GSM and CDMA introduced support for SMS messaging. 3G introduced compelling data services and 4G/5G essentially gives you ‘fiber in the air’ with throughput and latency suitable for anything from Netflix to remote surgery. These services are defined in the standardization of software and integration between providers or enabled by new service providers.

Adding to the complexity, some operators, equipment providers and cloud providers like Telenor, Vodafone, Ericsson, AWS and Microsoft offer compelling IoT platform services to facilitate end-to-end solutions for enterprises to connect devices to the cloud, be it cars, cattle or chainsaws. Beyond connectivity, the smarts of the solution offer significant value-add for companies and consumers in every niche, but software and solution integration are key.

OTT – Over The Top

The incredible power of the telco network platform(s) has enabled a large swath of Over The Top (OTT) services and applications. We now take Facebook, Twitter, Instagram, TikTok, Google Maps, Uber, mobile bank apps, Spotify and Podcasts for granted… But the reality is, none of these would reach us were it not for the ubiquity and reliability of the network. Most of these applications “live in the cloud”.

Devices

Apple iPhone and IOS. Google and Android. ’nuff said?

Common to all the above is a drive towards more modular software development, with defined integrations and APIs. And the aspiration to leverage cloud-native software design methodologies and tools. With software automation for integration and delivery from lab to live operations. Whether deployed on “bare metal” hardware optimized environments or to cloud environments. With the purpose of attaining speed and a better end-user experience.

In the next post, we will take a closer look at ‘financial services’. A sector which has been building software for decades. But where competitive pressures put new requirements on efficient delivery of much better customer experience. Where manual ‘paper’ based processes and the ‘outsourcing to India’ worked for some time to manage costs, but now hamper innovation and speed as financial institutions recognize tech is core and not just outsourced scope of work.

Stay tuned!

Stian Kildal Ammeon CEO

Author
Stian Kildal
CEO | Ammeon

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