Source – pipelinepub.com

Data is big business. As the saying goes, information is power, and this has never been truer than with traditionally hardware-focused companies shifting toward a software-based model. This digital transformation is happening across the board and is causing enterprises around the world to scramble in efforts to better grasp what’s happening on their networks and operations in order to transform their own businesses. As a result of this ongoing transition, the last few years have seen the likes of IBM and Oracle hoovering up application and cloud technology providers, driven by a need to offer end-to-end services for their customers.

Cisco’s $3.7 billion acquisition of AppDynamics earlier this year is a recent example — the latest in a long line of major tech brands betting big on application and network management technology in the age of IP. And while this has primarily been a change we are seeing in the enterprise space, it’s holding implications for the future of the telecoms sector too.

The Current State of Play

Digital Transformation (DX) continues to sweep across all industry sectors, driving the fundamental shift from physical to digital assets. Underpinning DX is the conversion towards an information-driven economy in which data is the new currency and almost all aspects of business are rooted in software. Nowhere is this more applicable than in telecom. The shift experienced by telcos has already included the move to 4G, supporting and encouraging data-hungry applications and high-bandwidth traffic. This has been great for the subscriber, who has experienced much faster speeds and better connectivity. For the operator, however, it has posed a problem.

Operators face the complex challenges of slow business growth and ongoing disruption to their core services by OTT players and new market entrants, as well as having to manage the mobile data explosion and network expansion — all while providing a consistent subscriber experience. These challenges have created a disconnect between the significant investments operators have made in 4G LTE and the decline in revenues they’ve seen thereafter.

The reality is that physical infrastructure is already being stretched in attempts to accommodate subscriber capacity demands, yet updating or expanding this architecture is a difficult and costly process. A related challenge is the sheer amount of network data that operators now need to store, process and manage as a result of meeting subscriber demands, which was supposed to be mitigated by the move to 4G. But it seems that move may actually be contributing to the problem.

New Data Demands, New Operator Challenges

4G networks, like 3G, are IP-based. However, unlike 3G,  the 4G networks also use IP for voice data. Having a common platform for all network traffic was supposed to make things run smoother, but the complexity grew and the volume of data operators had to accommodate grew substantially. As a result, the industry has been looking ahead to 5G in the hopes it will help alleviate capacity demands. But with 5G, there will be the added pressure to deliver a consistent quality of experience in an environment that forever demands higher data throughput. The volume of network data that operators will need to accommodate will also increase substantially.

Fortunately, there is light at the end of the tunnel in the form of the broader digital ecosystem and new commercial opportunities opening up to operators. With those opportunities come greater expectations from the network and new challenges for delivering on the next stage of CSPs’ digital transformation journeys. In order to meet expectations, and to create a setting in which it becomes possible for mobile operators to embrace new business models and innovate in the use of new technology for delivering new services, a new approach will be needed in terms of network design. Network design could drive DX efforts, but only if operators approach it in the right way.

The Future Will Be Virtualized

Proprietary hardware alone is simply not capable, or economic, when it comes to supporting 5G. The deployment of this technology will be enabled through network functions virtualization (NFV) and software defined networking (SDN).