Facing Up to the Software-Defined Operator

Introduction

At this year’s Mobile World Congress, the GSMA’s eccentric decision to split the event between the Fira Gran Via (the “new Fira”, as everyone refers to it) and the Fira Montjuic (the “old Fira”, as everyone refers to it) was a better one than it looked. If you took the special MWC shuttle bus from the main event over to the developer track at the old Fira, you crossed a culture gap that is widening, not closing. The very fact that the developers were accommodated separately hints at this, but it was the content of the sessions that brought it home. At the main site, it was impressive and forward-thinking to say you had an app, and a big deal to launch a new Web site; at the developer track, presenters would start up a Web service during their own talk to demonstrate their point.

There has always been a cultural rift between the “netheads” and the “bellheads”, of which this is just the latest manifestation. But the content of the main event tended to suggest that this is an increasingly serious problem. Everywhere, we saw evidence that core telecoms infrastructure is becoming software. Major operators are moving towards this now. For example, AT&T used the event to announce that it had signed up Software Defined Networks (SDN) specialists Tail-F and Metaswitch Networks for its next round of upgrades, while Deutsche Telekom’s Terastream architecture is built on it.

This is not just about the overused three letter acronyms like “SDN and NFV” (Network Function Virtualisation – see our whitepaper on the subject here), nor about the duelling standards groups like OpenFlow, OpenDaylight etc., with their tendency to use the word “open” all the more the less open they actually are. It is a deeper transformation that will affect the device, the core network, the radio access network (RAN), the Operations Support Systems (OSS), the data centres, and the ownership structure of the industry. It will change the products we sell, the processes by which we deliver them, and the skills we require.

In the future, operators will be divided into providers of the platform for software-defined network services and consumers of the platform. Platform consumers, which will include MVNOs, operators, enterprises, SMBs, and perhaps even individual power users, will expect a degree of fine-grained control over network resources that amounts to specifying your own mobile network. Rather than trying to make a unitary public network provide all the potential options as network services, we should look at how we can provide the impression of one network per customer, just as virtualisation gives the impression of one computer per user.

To summarise, it is no longer enough to boast that your network can give the customer an API. Future operators should be able to provision a virtual network through the API. AT&T, for example, aims to provide a “user-defined network cloud”.

Elements of the Software-Defined Future

We see five major trends leading towards the overall picture of the ‘software defined operator’ – an operator whose boundaries and structure can be set and controlled through software.

1: Core network functions get deployed further and further forwards

Because core network functions like the Mobile Switching Centre (MSC) and Home Subscriber Server (HSS) can now be implemented in software on commodity hardware, they no longer have to be tied to major vendors’ equipment deployed in centralised facilities. This frees them to migrate towards the edge of the network, providing for more efficient use of transmission links, lower latency, and putting more features under the control of the customer.

Network architecture diagrams often show a boundary between “the Internet” and an “other network”. This is called the ‘Gi interface’ in 3G and 4G networks. Today, the “other network” is usually itself an IP-based network, making this distinction simply that between a carrier’s private network and the Internet core. Moving network functions forwards towards the edge also moves this boundary forwards, making it possible for Internet services like content-delivery networking or applications acceleration to advance closer to the user.

Increasingly, the network edge is a node supporting multiple software applications, some of which will be operated by the carrier, some by third-party services like – say – Akamai, and some by the carrier’s customers.

2: Access network functions get deployed further and further back

A parallel development to the emergence of integrated small cells/servers is the virtualisation and centralisation of functions traditionally found at the edge of the network. One example is so-called Cloud RAN or C-RAN technology in the mobile context, where the radio basebands are implemented as software and deployed as virtual machines running on a server somewhere convenient. This requires high capacity, low latency connectivity from this site to the antennas – typically fibre – and this is now being termed “fronthaul” by analogy to backhaul.

Another example is the virtualised Optical Line Terminal (OLT) some vendors offer in the context of fixed Fibre to the home (FTTH) deployments. In these, the network element that terminates the line from the user’s premises has been converted into software and centralised as a group of virtual machines. Still another would be the increasingly common “virtual Set Top Box (STB)” in cable networks, where the TV functions (electronic programming guide, stop/rewind/restart, time-shifting) associated with the STB are actually provided remotely by the network.

In this case, the degree of virtualisation, centralisation, and multiplexing can be very high, as latency and synchronisation are less of a problem. The functions could actually move all the way out of the operator network, off to a public cloud like Amazon EC2 – this is in fact how Netflix does it.

3: Some business support and applications functions are moving right out of the network entirely

If Netflix can deliver the world’s premier TV/video STB experience out of Amazon EC2, there is surely a strong case to look again at which applications should be delivered on-premises, in the private cloud, or moved into a public cloud. As explained later in this note, the distinctions between on-premises, forward-deployed, private cloud, and public cloud are themselves being eroded. At the strategic level, we anticipate pressure for more outsourcing and more hosted services.

4: Routers and switches are software, too

In the core of the network, the routers that link all this stuff together are also turning into software. This is the domain of true SDN – basically, the effort to substitute relatively smart routers with much cheaper switches whose forwarding rules are generated in software by a much smarter controller node. This is well reported elsewhere, but it is necessary to take note of it. In the mobile context, we also see this in the increasing prevalence of virtualised solutions for the LTE Enhanced Packet Core (EPC), Mobility Management Entity (MME), etc.

5: Wherever it is, software increasingly looks like the cloud

Virtualisation – the approach of configuring groups of computers to work like one big ‘virtual computer’ – is a key trend. Even when, as with the network devices, software is running on a dedicated machine, it will be increasingly found running in its own virtual machine. This helps with management and security, and most of all, with resource sharing and scalability. For example, the virtual baseband might have VMs for each of 2G, 3G, and 4G. If the capacity requirements are small, many different sites might share a physical machine. If large, one site might be running on several machines.

This has important implications, because it also makes sharing among users easier. Those users could be different functions, or different cell sites, but they could also be customers or other operators. It is no accident that NEC’s first virtualised product, announced at MWC, is a complete MVNO solution. It has never been as easy to provide more of your carrier needs yourself, and it will only get easier.

The following Huawei slide (from their Carrier Business Group CTO, Sanqi Li) gives a good visual overview of a software-defined network.

Figure 1: An architecture overview for a software-defined operator
An architecture overview for a software-defined operator March 2014

Source: Huawei

 

  • The Challenges of the Software-Defined Operator
  • Three Vendors and the Software-Defined Operator
  • Ericsson
  • Huawei
  • Cisco Systems
  • The Changing Role of the Vendors
  • Who Benefits?
  • Who Loses?
  • Conclusions
  • Platform provider or platform consumer
  • Define your network sharing strategy
  • Challenge the coding cultural cringe

 

  • Figure 1: An architecture overview for a software-defined operator
  • Figure 2: A catalogue for everything
  • Figure 3: Ericsson shares (part of) the vision
  • Figure 4: Huawei: “DevOps for carriers”
  • Figure 5: Cisco aims to dominate the software-defined “Internet of Everything”

Software Defined People: How it Shapes Strategy (and us)

Introduction: software’s defining influence

Our knowledge, employment opportunities, work itself, healthcare, potential partners, purchases from properties to groceries, and much else can now be delivered or managed via software and mobile apps.

So are we all becoming increasingly ‘Software Defined’? It’s a question that has been stimulated in part by producing research on ‘Software Defined Networks (SDN): A Potential Game Changer’ and Enterprise Mobility, this video from McKinsey and Eric Schmidt, Google’s Exec Chairman, a number of observations throughout the past year, and particularly at this and last year’s Mobile World Congress (MWC).

But is software really the key?

The rapid adoption of smartphones and tablets, enabled by ever faster networks, is perhaps the most visible and tangible phenomenon in the market. Less visible but equally significant is the huge growth in ‘big data’ – the use of massive computing power to process types and volume of data that were previously inaccessible, as well as ‘small data’ – the increasing use of more personalised datasets.

However, what is now fuelling these trends is that many core life and business tools are now software of some form or another. In other words, programmes and ‘apps’ that create economic value, utility, fun or efficiency. Software is now the driving force, and the evolving data and hardware are by-products and enablers of the applications respectively.

Software: your virtual extra hand

In effect, mobile software is the latest great tool in humanity’s evolutionary path. With nearly a quarter of the world’s population using a smartphone, the human race has never had so much computing power by its side in every moment of everyday life. Many feature phones also possess significant processing power, and the extraordinary reach of mobile can now deliver highly innovative solutions like mobile money transfer even in markets with relatively underdeveloped financial service infrastructure.

How we are educated, employed and cared for are all starting to change with the growing power of mobile technologies, and will all change further and with increasing pace in the next phase of the mobile revolution. Knowing how to get the best from this world is now a key life skill.

The way that software is used is changing and will change further. While mobile apps have become a mainstream consumer phenomenon in many markets in the last few years, the application of mobile, personalised technologies is also changing education, health, employment, and the very fabric of our social lives. For example:

  • Back at MWC 2013 we saw the following fascinating video from Ericsson as part of its ‘Networked Society’ vision of why education has evolved as is has (to mass-produce workers to work in factories), and what the possibilities are with advanced technology, which is well worth a few minutes of your time whether you have kids or not.
  • We also saw this education demo video from a Singapore school from Qualcomm, based on the creative use of phones in all aspects of schooling in the WE Learn project.
  • There are now a growing number of eHealth applications (heart rate, blood pressure, stroke and outpatient care), and productivity apps and outreach of CRM applications like Salesforce into the mobile employment context are having an increasingly massive impact.
  • While originally a ‘fixed’ phenomena, the way we meet and find partners has seen a massive change in recent years. For example, in the US, 17% of recent marriages and 20% of ‘committed relationships’ started in the $1Bn online dating world – another world which is now increasingly going mobile.

The growing sophistication in human-software interactivity

Horace Dediu pointed out at a previous Brainstorm that the disruptive jumps in mobile handset technology have come from changes in the user interface – most recently in the touch-screen revolution accompanying smartphones and tablets.

And the way in which we interact with the software will continue to evolve, from the touch screens of smartphones, through voice activation, gesture recognition, retina tracking, on-body devices like watches, in-body sensors in the blood and digestive system, and even potentially by monitoring brainwaves, as illustrated in the demonstration from Samsung labs shown in Figure 1.

Figure 1: Software that reads your mind?

Source: Samsung Labs

Clearly, some of these techniques are still at an early stage of development. It is a hard call as to which will be the one to trigger the next major wave of innovation (e.g. see Facebook’s acquisition of Oculus Rift), as there are so many factors that influence the likely take-up of new technologies, from price through user experience to social acceptance.

Exploring and enhancing the senses

Interactive goggles / glasses such as Google Glass have now been around for over a year, and AR applications that overlay information from the virtual world onto images of the real world continue to evolve.

Search is also becoming a visual science – innovations such as Cortexica, recognise everyday objects (cereal packets, cars, signs, advertisements, stills from a film, etc.) and return information on how and where you can buy the related items. While it works from a smartphone today, it makes it possible to imagine a world where you open the kitchen cupboard and tell your glasses what items you want to re-order.

Screens will be in increasing abundance, able to interact with passers-by on the street or with you in your home or car. What will be on these screens could be anything that is on any of your existing screens or more – communication, information, entertainment, advertising – whatever the world can imagine.

Segmented by OS?

But is it really possible to define a person by the software they use? There is certainly an ‘a priori’ segmentation originating from device makers’ segmentation and positioning:

  • Apple’s brand and design ethos have held consistently strong appeal for upmarket, creative users. In contrast, Blackberry for a long time held a strong appeal in the enterprise segment, albeit significantly weakened in the last few years.
  • It is perhaps slightly harder to label Android users, now the largest group of smartphone users. However, the openness of the software leads to freedom, bringing with it a plurality of applications and widgets, some security issues, and perhaps a greater emphasis on ‘work it out for yourself’.
  • Microsoft, once ubiquitous through its domination of the PC universe, now finds itself a challenger in the world of mobiles and tablets, and despite gradually improving sales and reported OS experience and design has yet to find a clear identity, other than perhaps now being the domain of those willing to try something different. While Microsoft still has a strong hand in the software world through its evolving Office applications, these are not yet hugely mobile-friendly, and this is creating a niche for new players, such as Evernote and others, that have a more focused ‘mobile first’ approach.

Other segments

From a research perspective, there are many other approaches to thinking about what defines different types of user. For example:

  • In adoption, the Bass Diffusion Model segments e.g. Innovators, Early Adopters, Mass Market, Laggards;
  • Segments based on attitudes to usage, e.g. Lovers, Haters, Functional Users, Social Users, Cost Conscious, etc.;
  • Approaches to privacy and the use of personal data, e.g. Pragmatic, Passive, Paranoid.

It is tempting to hypothesise that there could be meta-segments combining these and other behavioural distinctions (e.g. you might theorise that there would be more ‘haters’ among the ‘laggards’ and the ‘paranoids’ than the ‘innovators’ and ‘pragmatics’), and there may indeed be underlying psychological drivers such as extraversion that drive people to use certain applications (e.g. personal communications) more.

However, other than anecdotal observations, we don’t currently have the data to explore or prove this. This knowledge may of course exist within the research and insight departments of major players and we’d welcome any insight that our partners and readers can contribute (please email contact@telco2.net if so).

Hypothesis: a ‘software fingerprint’?

The collection of apps and software each person uses, and how they use them, could be seen as a software fingerprint – a unique combination of tools showing interests, activities and preferences.

Human beings are complex creatures, and it may be a stretch to say a person could truly be defined by the software they use. However, there is a degree of cause and effect with software. Once you have the ability to use it, it changes what you can achieve. So while the software you use may not totally define you, it will play an increasing role in shaping you, and may ultimately form a distinctive part of your identity.

For example, Minecraft is a phenomenally successful and addictive game. If you haven’t seen it, imagine interactive digital Lego (or watch the intro video here). Children and adults all over the world play on it, make YouTube films about their creations, and share knowledge and stories from it as with any game.

To be really good at it, and to add enhanced features, players install ‘mods’ – essentially software upgrades, requiring the use of quite sophisticated codes and procedures, and the understanding of numerous file types and locations. So through this one game, ten year old kids are developing creative, social and IT skills, as well as exploring and creating new identities for themselves.

Figure 2: Minecraft – building, killing ‘creepers’ and coding by a kid near you

Minecraft March 2014

Source: Planetminecraft.com

But who is in charge – you or the software?

There are also two broad schools of thought in advanced IT design. One is that IT should augment human abilities and its application should always be controlled by its users. The other is the idea that IT can assist people by providing recommendations and suggestions that are outside the control of the user. An example of this second approach is Google showing you targeted ads based on your search history.

Being properly aware of this will become increasingly important to individuals’ freedom from unrecognised manipulation. Just as knowing that embarrassing photos on Facebook will be seen by prospective employers, knowing who’s pulling your data strings will be an increasingly important to controlling one’s own destiny in the future.

Back to the law of the Jungle?

Many of the opportunities and abilities conferred by software seem perhaps trivial or entertaining. But some will ultimately confer advantages on their users over those who do not possess the extra information, gain those extra moments, or learn that extra winning idea. The questions are: which will you use well; and which will you enable others to use? The answer to the first may reflect your personal success, and the second that of your business.

So while it used to be that your genetics, parents, and education most strongly steered your path, now how you take advantage of the increasingly mobile cyber-world will be a key additional competitive asset. It’s increasingly what you use and how you use it (as well as who you know, of course) that will count.

And for businesses, competing in an ever more resource constrained world, the effective use of software to track and manage activities and assets, and give insight to underlying trends and ways to improve performance, is an increasingly critical competence. Importantly for telcos and other ICT providers, it’s one that is enabled and enhanced by cloud, big data, and mobile.

The Software as a Service (SaaS) application Salesforce is an excellent case in point. It can brings instantaneous data on customers and business operations to managers’ and employees’ fingertips to any device. This can confer huge advantages over businesses without such capabilities.

Figure 3: Salesforce delivers big data and cloud to mobile

Salesforce delivers big data and cloud to mobile March 2014

Source: Powerbrokersoftware.com

 

  • Executive Summary: the key role of mobile
  • Why aren’t telcos more involved?
  • Revenue Declines + Skills Shortage = Digital Hunger Gap
  • What should businesses do about it?
  • All Businesses
  • Technology Businesses and Enablers
  • Telcos
  • Next steps for STL Partners and Telco 2.0

 

  • Figure 1: Software that reads your mind?
  • Figure 2: Minecraft – building, killing ‘creepers’ and coding by a kid near you
  • Figure 3: Salesforce delivers big data and cloud to mobile
  • Figure 4: The Digital Hunger Gap for Telcos
  • Figure 5: Telcos need Software Skills to deliver a ‘Telco 2.0 Service Provider’ Strategy
  • Figure 6: The GSMA’s Vision 2020