The big themes for MWC 2018 in Telco cloud management software were focused on automation, cloud native readiness, and machine learning. The Appledore Research analyst met with 55 companies during the 4 day event including CSPs, incumbent suppliers, and new entrants. Our roundup of the event will be published in four segments. CSPs are deploying NFV and SDN in small scale deployments. In fact, making the business case and trying to change the culture are the two biggest obstacles now – not the technology itself. Unlike the POC days of NFV, CSPs need to focus on ROI justifications for virtualization and the next wave of technology deployments. This can be summarized into three buckets

  1. New revenue justification which today is appearing to look more like revenue substitution. Consider the case for SD-WAN which is technology substitution. The reality is CSPs are not moving at the speed of OTT or web-scale cloud providers so generating new lines of business rarely occur.
  2. Improve profit margins focusing on reducing OPEX. VNF deployments moves CAPEX cost down marginally so unless automation is increased, and manual processes are eliminated OPEX does not go down leading to no change in profit margins.
  3. Differentiate from core competitors with an increased focus on the customer. CSPs have been doing this for years mostly in the managed services and mobile market segments. The benefit of NFV and SDN is agility. That should improve CEI scores further if implemented correctly which means offering true self service, scale out network and infra fabrics to cut order to cycle times from months to minutes.

None of this is new. We have been espousing these tenets for 3 years but the CSP market is moving at a tenth of the rate of true digital platform providers.
Understanding the where and why to deploy edge computing and other technologies is more important than the how. Fiber to the traffic pole is a 5G business case we have heard but it won’t work if the local municipalities expect the technology to last 25 years. Sending a guy out for the next upgrade breaks the business model.

Check out our recent white paper on Automation in the Cloud Native Hybrid Network for more insight.


Image courtesy of Bowden

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