Defining a Major IT Transformation Now Happening in Telecoms

NEWS ANALYSIS: They must take advantage of the digital services economy to compete against over-the-top providers, because their core businesses are under attack.

digital disrupt

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."

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 15 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...