ANALYSIS & OPINION

How can telecoms companies adapt to a changing market?

At the OFC in San Francisco, Robert Roe heard concerns about IT and the back office figuring almost as large as issues of high technology.

Although the 12,700 visitors to OFC 2014 saw all manner of technology on display from the 550 exhibitors, it was something less tangible – software – that became a dominant theme of the event.

The ‘Optical Fiber Communication Conference and Exposition’, to give it its formal title, took place from 11 to 13 March at the Moscone Centre in San Francisco, during which attendees heard that ‘The “IT-isation” of telecoms has begun’.

The development is being stimulated by the growth of ‘the cloud’, which opens up new business opportunities but is also creating demands on network operators to offer new applications and services, and new infrastructure. The networks serving the cloud need to mirror the flexibility, scalability, and programmability of the resources within the data centres themselves. Hence the emphasis on ‘IT’.

In his keynote address to the whole conference, Gary Smith, president and chief executive officer, Ciena, envisioned a future in which networks will be virtualised, just as servers in data centres are today. An ‘open’ network will have the ability to run services and functions as applications and will be able to adapt to use network resources as efficiently as possible as the needs of users evolve.

According to Smith, underpinning the new architecture will be an ‘intelligent photonic layer’, which will carry all the network services and be able to ‘see and optimise network traffic’. In this new world of optical fibre communications, he suggested that a combination of ROADMs, coherent receivers, DSPs and software-enabled control at the optical layer, in addition to Ethernet and OTN traffic management, will achieve the ideal packet optical solution for software-defined networks.

Dana Cooperson, VP and Practice Leader for the telecoms analysts Ovum, took up Gary Smith’s theme during a press briefing, and stressed that the industry must think beyond the hardware: ‘Things are getting more real-time and the network is having to adapt to services. We can’t be buried in the infrastructure anymore, we need to be focused on the services and service creation.’

The demand for novel services such as the cloud is changing the role of the telecoms companies themselves. Windstream Communications, which is headquartered in Arkansas, offers broadband, phone, and digital TV services to individual consumers primarily in rural areas. It also provides advanced network communications, including cloud computing and managed services, to businesses across the USA. Randy Nicklas, the company’s CTO, said: ‘Telecoms service providers like Windstream have long been in the business of outsourcing the activities of an IT department. Nowadays a service provider is expected to be also able to do things like sell computer storage and maintenance, maintain cloud pods and data centres, and so forth.’

Ihab Tarazi, CTO of Equinix, explained that similar changes were taking place in the nature of his company’s role as a service provider. Equinix, headquartered in California, operates International Business Exchange data centres in 31 markets across 15 countries in the Americas, EMEA, and Asia-Pacific. ‘The way people buy services from us has changed, we have a lot of cloud customers and they all want to have automation and programmability,’ Tarazi continued. ‘What more can we do to be a trusted partner for the IT department? -- that’s an ongoing discussion within the industry, I think.’

It is to address this changing world of dynamic, virtualised, high-bandwidth applications and services that Coriant has introduced its newest offering the Dynamic Optical Cloud, representatives of the company explained in a briefing with Fibre Systems. The system is designed as an end-to-end, programmable infrastructure solution to provide service providers with a scalable environment that can adapt to increasing traffic loads in wide area networks. It features application-driven TaaS/bandwidth on demand, multi-layer defragmentation, network analytics, and workflow management, dynamic mobile backhaul resiliency, and cloud-bursting.

Cloud bursting is just one feature that could be key instrumental in alleviating pressure on the network, in the case of future on-demand services. All the features address the need for a scalable network where demand can quickly increase at peak times. In this way, the DOC system provides an open framework that helps service providers reduce operating expenditure and capital expenditure.

Cost control was a theme very close to Randy Nicklas’ heart, as CTO of the telecoms provider Windstream. Indeed, he seemed as concerned with the commercially important issues of ensuring that the companies can control the costs, and make money out of the services they provide, as with the technology of upgrading of network infrastructure. He said: ‘I think the path to integrate networks is fairly straightforward with all the technical issues. I think it is a lot harder in the back office. We have multiple inventory systems that are used to maintain all of the elements and all the services that are provisioned across all of those elements. How do you condense and coalesce all those things down?’

Smith agreed: ‘I think the big challenge certainly for the major carriers is the “back-office”, it is really the IT systems for a lot of the tier 1 carriers.’ He went on to say ‘. We can come up with the network architectures and be able to have the intelligence out there, but if they can’t translate that into billing and all the rest of it then it is a real challenge. I think that is being recognised but I think that is actually, at a macro level, the biggest challenge.’

Tarazi also worried about the complexity of upgrading the back-office: ‘You might have a plan to do all that. It is kind of a brutal job to do those things and then in terms of the opportunity, I think that there is a natural time to leapfrog ahead.’

Nicklas explained that there will still be a ‘vestigial tail’ of services and elements that are left over. ‘This legacy must also be managed correctly,’ he went on to say, ‘and yet they are sitting there spinning off money and they have to be maintained and so forth. So what do we do with those systems? Probably we just ignore them.’ As with other legacy systems, they will be left to run until a time comes when they are not efficient enough to be economically viable.

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