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    Defining a Major IT Transformation Now Happening in Telecoms

    Written by

    Chris Preimesberger
    Published December 14, 2014
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      SAN JOSE, Calif.–IT evolves by modernization or by transformation–or both, depending upon the size of the system.

      Modernization is generally about upgrades and incremental improvement to legacy data center equipment, generally for performance purposes; transformation is about improving IT systems to solve new and more complex problems, Persistent Systems CEO and founder Anand Deshpande recently told eWEEK in succinct definitions.

      The telecom industry, one of the world’s largest gulpers of IT products and services, is going through both types of transitions right now, thanks largely to a few major factors. These include: a) the continuing deluge of data, and how and where to store it for analytics purposes; b) the steady improvement in both performance and power savings in the new generation of processors; c) the rapid development of cloud services; and d) vastly improved network bandwidths and data movement speeds.

      Transformation a Key Topic at TM Forum Event

      These and other topics were top of mind this past week at the annual TM Forum Digital Disrupt conference, held at the San Jose McEnery Convention Center (“I’m a Disruptor” T-shirts (pictured) were popular items). About 800 representatives from the telecom and IT sectors gathered to make deals; obtain up-to-date market information, new tools and best practice lists from the host industry group; and mingle with industry thought leaders.

      Patrick Kelly, founder of Appledore Research in Boston, has been analyzing the industry for more than a decade. His primary focus is the transformation now going on in many network operator environments. For example, network and software systems need to prepare for new services to come, such as mobile banking, machine-to-machine communication, cloudification, and cloud-based services. Examples of the latter include PaaS (platform as a service), IaaS (infrastructure as a service) and other services deployed over virtualized infrastructures.

      The industry first-movers–such as AT&T, Verizon, and Comcast–are already on to these changes. But by and large, the majority of small-market and regional operators are now making key IT decisions on investments that will impact their enterprises’ business success patterns for years to come.

      “One of the things I’m looking at as operators go through this journey is that this is a cycle that will take between 10 and 15 years,” Kelly told eWEEK during a break at the conference.

      “Most operators have a high capital expenditure structure–they have a lot of high sum costs in the infrastructure–and they’re not going to abandon that. What they are trying to do is take advantage of opportunities in the digital services economy to compete against the over-the-top providers, mostly because their core businesses are under attack.”

      How OTT Competitors Are Changing the Business

      In broadcasting, over-the-top content refers to delivery of audio, video and other media over the Internet without the involvement of a multiple-system operator in the control or distribution of the content. The Internet provider may be aware of the contents of the Internet Protocol packets but is not responsible for, nor able to control, the viewing abilities, copyrights, and/or other redistribution of the content. This model contrasts with the purchasing or rental of video or audio content from an Internet service provider (ISP), such as pay television video on demand or an IPTV video service, such as AT&T U-Verse.

      The core business of most telecom providers is still voice communications, messaging and data services, Kelly said. “But that’s being shifted to become all IP (Internet protocol), and everything will become a data service, if you will.”

      Defining a Major IT Transformation Now Happening in Telecoms

      That would include VoLTE, an acronym for Voice over LTE, which is based on the IP Multimedia Subsystem (IMS) network. This approach results in the voice service being delivered as data flows within the LTE data bearer. This means that there is no dependency on (or ultimately, requirement for) the legacy circuit-switched voice network to be maintained. VoLTE has up to three times more voice and data capacity than 3G Universal Mobile Telecommunications System (UMTS) and up to six times more than 2G GSM. Furthermore, it frees up bandwidth, because VoLTE’s packets headers are smaller than those of unoptimized VoIP/LTE.

      Why VoLTE is Playing a Key Role

      So VoTLE is a clear challenger — and an ultimate replacer — of status-quo voice services supplied by conventional telecoms.

      “VoLTE is just another data service,” Kelly said, “but it is rich communication that includes voice, video and messaging. Operators are now trying to determine how to deploy it. What they’re faced with now is a business model predicated on selling data service packages. Most services offer all-you-can-eat voice and messaging — it’s free. What you pay for is your data consumption.

      “As operators look to roll out new services like VoLTE, video and others, what they’re doing is looking at ways to monetize them. So there’s this transformation within their infrastructures, where they say ‘OK, we need to move to deploying application-based services based on the value of that content. So if it’s video, you’re actually aligning that service to the value that’s being delivered to the consumer and the enterprise customer,” Kelly said.

      “What that means is, you have to change your systems. You have to change your billing systems, your delivery system, how you assure those systems — it’s a full lifecycle change that they go through,” Kelly said.

      These aren’t forklift upgrades; they are migrations that continue to support existing services on existing infrastructure. But they need to be migrated to support new digital services like VoLTE, Kelly said.

      NFV, SDN Two Hot Topics

      The hottest topics at the TM Forum conference were NFV (network function virtualization) and SDN (software-defined networking), which take the intelligence out of management control in the switch and move it into a software layer. Operators want to know how to reduce their capital investments by virtualizating as many hardware components as possible.

      “And they still want to be able to scale up and support these new services,” Kelly said. “Things need to be elastic, dynamic and on-demand, because we’re moving to turn up services almost in real time.”

      In order to do that, telecoms are looking at their systems and what they need to do to change them. They’re looking at changing out purpose-built telecom equipment — often 10 to 20 years old — and move it to an x86 platform. “And then, they need to abstract those software control functions out of that,” Kelly said.

      “They need to be able to turn up virtualized EPCs, based on the demand they get. There are advantages in terms of speed to market, reduced costs to deploy the equipment because there is less operational expense, and less capital investment by going to a cheaper hardware platform,” Kelly said.

      “At the same time, they need to be able to spawn those resources when they need them, rather than have idle capacity sitting out in the infrastructure.”

      So this is the main strategy telecoms are putting together in their battle against those nasty over-the-top IP providers. eWEEK will be keeping close tabs on these trends in 2015.

      Chris Preimesberger
      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor Emeritus of eWEEK. In his 16 years and more than 5,000 articles at eWEEK, he distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.
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