Building a telco based on ‘free’ open source software is theoretically highly attractive to telcos, particularly those looking to increase their control over innovation and differentiation, and/or where cost reduction is critical. This report looks at how to address the challenges, identifies practical options and choices, and how, when and why to go about open source transformation in the real world.
Introduction: Why an open source telecom?
Commercial pressures and technological opportunities
For telcos in many markets, declining revenues is a harsh reality. Price competition is placing telcos under pressure to reduce capital spending and operating costs.
At the same time, from a technological point of view, the rise of cloud-based solutions has raised the possibility of re-engineering telco operations to be run with virtualised and open sourced software on low cost, general purpose hardware.
Indeed, rather than pursuing the traditional technological model, i.e. licensing proprietary solutions from the mainstream telecoms vendors (e.g. Ericsson, Huawei, Amdocs, etc.), telcos can increasingly:
- Progressively outsource the entire technological infrastructure to a vendor;
- Acquire software with programmability and openness features: application programming interfaces(APIs) can make it easier to program telecommunications infrastructure.
The second option promises to enable telcos to achieve their long-standing goals of decreasing the time-to-market of new solutions, while further reducing their dependence on vendors.
Greater adoption of general IT-based tools and solutions also:
- Allows flexibility in using the existing infrastructure
- Optimises and reuses the existing resources
- Enables integration between operations and the network
- And offers the possibility to make greater use of the data that telcos have traditionally collected for the purpose of providing communications services.
In an increasingly squeezed commercial context, the licensing fees applied by traditional vendors for telecommunication solutions start to seem unrealistic, and the lack of flexibility poses serious issues for operators looking to push towards a more modern infrastructure. Moreover, the potential availability of competitive open source solutions provides an alternative that challenges the traditional model of making large investments in proprietary software, and dependence on a small number of vendors.
Established telecommunications vendors and/or new aggressive ones may also propose new business models (e.g., share of investments, partnership and the like), which could be attractive for some telcos.
In any case, operators should explore and evaluate the possibility of moving forward with a new approach based on the extensive usage of open source software.
This report builds on STL Partners’ 2015 report, The Open Source Telco: Taking Control of Destiny which looked at how widespread use of open source software is an important enabler of agility and innovation in many of the world’s leading internet and IT players. Yet while many telcos then said they crave agility, only a minority use open source to best effect.
In that 2015 report, we examined the barriers and drivers, and outlined six steps for telcos to safely embrace this key enabler of transformation and innovation:
- Increase usage of open source software: Overall, operators should look to increase their usage of open source software across their entire organisation due to its numerous strengths. It must, therefore, be consistently and fairly evaluated alongside proprietary alternatives. However, open source software also has disadvantages, dependencies, and hidden costs (such as internally-resourced maintenance and support), so it should not be considered an end in itself.
- Increase contributions to open source initiatives: Operators should also look to increase their level of contribution to open source initiatives so that they can both push key industry initiatives forward (e.g. OPNFV and NFV) and have more influence over the direction these take.
- Associate open source with wider transformation efforts: Successful open source adoption is both an enabler and symptom of operators’ broader transformation efforts, and should be recognised as such. It is more than simply a ‘technical fix’.
- Bring in new skills: To make effective use of open source software, operators need to acquire new software development skills and resources – likely from outside the telecoms industry.
- … but bring the whole organisation along too: Employees across numerous functional areas (not just IT) need to have experience with, or an understanding of, open source software – as well as senior management. This should ideally be managed by a dedicated team.
- New organisational processes: Specific changes also need to be made in certain functional areas, such as procurement, legal, marketing, compliance and risk management, so that their processes can effectively support increased open source software adoption.
This report goes beyond those recommendations to explore the changing models of IT delivery open to telcos and how they could go about adopting open source solutions. In particular, it outlines the different implementation phases required to build an open source telco, before considering two scenarios – the greenfield model and the brownfield model. The final section of the report draws conclusions and makes recommendations.
Why choose to build an open source telecom now?
Since STL Partners published its first report on open source software in telecoms in 2015, the case for embracing open source software has strengthened further. There are three broad trends that are creating a favourable market context for open source software.
▪ Digitisation – the transition to providing products and services via digital channels and media. This may sometimes involve the delivery of the product, such as music, movies and books, in a digital form, rather than a physical form.
▪ Virtualisation – executing software on virtualised platforms running on general-purpose hardware located in the cloud, rather than purpose-built hardware on premises. Virtualisation allows a better reuse of large servers by decoupling the relationship of one service to one server. Moreover, cloudification of these services means they can be made available to any connected device on a full-time basis.
▪ Softwarisation – the redefinition of products and services though software. This is an extension of digitisation, i.e., the digitisation of music has allowed the creation of new services and propositions (e.g. Spotify). The same goes for the movie industry (e.g. Netflix) or the transformation of the book industry (e.g. ebooks) and newspapers. This paradigm is based on:
- The ability to digitise the information (transformation of the analogue into a digital signal).
- Availability of large software platforms offering relevant processing, storage and communications capabilities.
- The definition of open and reusable application programming interfaces (APIs) which allow processes formerly ‘trapped’ within proprietary systems to be managed or enhanced with other information and by other systems.
These three features have started a revolution that is transforming other industries, e.g. travel agencies (e.g. Booking.com), large hotel chains (e.g. Airbnb), and taxis (e.g. Uber). Softwarisation is also now impacting other traditional industries, such as manufacturing (e.g., Industry 4.0) and, for sure, telecommunications.
Softwarisation in telecommunications amounts to the use of virtualisation, cloud computing, open APIs and programmable communication resources to transform the current network architecture. Software is playing a key role in enabling new services and functions, better customer experience, leaner and faster processes, faster introduction of innovation, and usually lower costs and prices. The softwarisation trend is very apparent in the widespread interest in two emerging technologies: network function virtualization (NFV) and software defined networking (SDN).
The likely impact of this technological transformation is huge: flexibility in service delivery, cost reduction, quicker time to market, higher personalisation of services and solutions, differentiation from competition and more. We have outlined some key telco NFV/SDN strategies in the report Telco NFV & SDN Deployment Strategies: Six Emerging Segments.
What is open source software?
A generally accepted open source definition is difficult to achieve because of different perspectives and some philosophical differences within the open source community.
One of the most high-profile definitions is that of the Open Source Initiative, which states the need to have access to the source code, the possibility to modify and redistribute it, and non-discriminatory clauses against persons, groups or ‘fields of endeavour’ (for instance, usage for commercial versus academic purposes) and others.
For the purpose of this report, STL defines open source software as follows:
▪ Open source software is a specific type of software for which the original source code is made freely available and may be redistributed and modified. This software is usually made available and maintained by specialised communities of developers that support new versions and ensure some form of backward compatibility.
Open source can help to enable softwarisation. As an example, it has greatly helped in moving from proprietary solutions in the web server sector to a common software platform (named LAMP) based on the Linux operating system, the Apache Http server, Mysql server, PhP programming language. All these components are made available as open source. This essentially means that people can freely acquire the source code, modify it and use it. Modifications and improvements are to be returned to the development community.
One of the earliest and most high profile examples of open source software was the Linux operating system, a Unix-like operating system developed under the model of free and open source software development and distribution.
Open source for telecoms: Benefits and barriers
The benefits of using open source for telecoms
As discussed in our earlier report, The Open Source Telco: Taking Control of Destiny, the adoption and usage of open source solutions are being driven by business and technological needs. Ideally, the adoption and exploitation of open source will be part of a broader transformation programme designed to deliver the specific operator’s strategic goals.
Operators implementing open source solutions today tend to do so in conjunction with the deployment of network function virtualization (NFV) and software defined networking (SDN), which will play an important role for the definition and consolidation of the future 5G architectures.
However, as Figure 1 shows, transformation programmes can face formidable obstacles, particularly where a cultural change and new skills are required.
The following strategic forces are driving interest in open source approaches among telecoms operators:
Reduce infrastructure costs. Telcos naturally want to minimise investment in new technologies and reduce infrastructure maintenance costs. Open source solutions seem to provide a way to do this by reducing license fees paid to solution vendors under the traditional software procurement model. As open source software usually runs on general-purpose hardware, it could also cut the capital and maintenance costs of the telco’s computing infrastructure. In addition, the current trend towards virtualisation and SDN should enable a shift to more programmable and flexible communications platforms. Today, open source solutions are primarily addressing the core network (e.g., virtualisation of evolved packet core), which accounts for a fraction of the investment made in the access infrastructure (fibre deployment, antenna installation, and so forth). However, in time open source solutions could also play a major role in the access network (e.g., open base stations and others): an agile and well-formed software architecture should make it possible to progressively introduce new software-based solutions into access infrastructure.
Mitigate vendor lock-in. Major vendors have been the traditional enablers of new services and new network deployments. Moreover, to minimise risks, telco managers tend to prefer to adopt consolidated solutions from a single vendor. This approach has several consequences:
- Telcos don’t tend to introduce innovative new solutions developed in-house.
- As a result, the network is not fully leveraged as a differentiator, and can become the full care and responsibility of a vendor.
- The internal innovation capabilities of a telco have effectively been displaced in favour of those of the vendor.
This has led to the “ossification” of much telecoms infrastructure and the inability to deliver differentiated offerings that can’t easily be replicated by competitors. Introducing open source solutions could be a means to lessen telcos’ dependence on specific vendors and increase internal innovation capabilities.
Enabling new services. The new services telcos introduce in their networks are essentially the same across many operators because the developers of these new services and features are a small set of consolidated vendors that offer the same portfolio to all the industry. However, a programmable platform could enable a telco to govern and orchestrate their network resources and become the “master of the service”, i.e., the operator could quickly create, customise and personalise new functions and services in an independent way and offer them to their customers. This capability could help telcos enter adjacent markets, such as entertainment and financial services, as well as defend their core communications and connectivity markets. In essence, employing an open source platform could give a telco a competitive advantage.
Faster innovation cycles. Depending on a vendor makes the telco dependent on its roadmap and schedule, and on the obsolescence and substitution of existing technologies. The use of out-dated technologies has a huge impact on a telco’s ability to offer new solutions in a timely fashion. An open source approach offers the possibility to upgrade and improve the existing platform (or to move to totally new technologies) without too many constraints posed by the “reference vendor”. This ability could be essential to acquiring and maintaining a technological advantage over competitors. Telcos need to clearly identify the benefits of this change, which represent the reasons, the “why”, for the softwarisation.
Complete contents of how to build an open source telecom report:
- Executive Summary
- Introduction: why open source?
- Commercial pressures and technological opportunities
- Open Source: Why Now?
- What is open source software?
- Open source: benefits and barriers
- The benefits of using open source
- Overcoming the barriers to using open source
- Choosing the right path to open source
- Selecting the right IT delivery model
- Choosing the right model for the right scenario
- Weighing the cost of open source
- Which telcos are using open source today?
- How can you build an open source telco?
- Greenfield model
- Brownfield model
- Conclusions and recommendations
- Controversial and challenging, yet often compelling
- Recommendations for different kinds of telcos
- Figure 1: Illustrative open source costs versus a proprietary approach
- Figure 2: Benefits of transformation and the related obstacles
- Figure 3: The key barriers in the path of a shift to open source
- Figure 4: Shaping an initial strategy for the adoption of open source solutions
- Figure 5: A new open source component in an existing infrastructure
- Figure 6: Different kinds of telcos need to select different delivery models
- Figure 7: Illustrative estimate of Open Source costs versus a proprietary approach