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This document is intended as a companion to the Appledore Research Group (“ARG”) report, released in August 2016, “The Economics of Virtualized Networks”, which lays the groundwork to fully understand the business demands that underlie our subsequent work, beginning with “The Role of Closed Loop Automation in Virtualized Networks”. It is intended as a faster-to-consume summary or first read for those who would benefit from the highlights of the report, but are pressed for time. Our intent is to summarize the essential findings of the report, without taking the reader though the useful, but time consuming supporting and explanatory information. Many readers may wish to later read or refer to the full report.
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abstract
Virtualization is an exciting technology that promises to transform networks, services (products) and operations in Telcos. Yet we at ARG believe that success will derive from understanding “first principles” – the underlying cost structure and economics of networks, how virtualization can change these economics, and what they demand operationally and strategically.
This report investigates the high level costs and revenues of CSPs, and then at the changes that virtualization enables. It defines opportunities and quantitative objectives, and draws inferences for business strategy, operations and technology / software selection and deployment.
In particular, Appledore Research Group will outline the various cost savings and revenue opportunities offered by virtualization, and outline the complicated inter-actions between them. For each, we will document the operational (process, functional) requirements for success. Finally, we provides a set of summary findings on how virtualization technology changes the underlying cost and revenue structure of CSPs, and the changes it suggests for operations and business models.
We expect that this will be an invaluable tool for management, operations, software suppliers, and strategists to use. We believe that it is a unique analysis in that it derives, independently, objectively and from first principles the characteristics that will define successful operations, CSPs, software products and suppliers. It is an invaluable tool to anyone who values objective input and validation.
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