Chat iconGet in touch

A bit of telecoms heresy: The return of the silo…

By December 3, 2014 No Comments

I have spent a lot of time this year meeting with clients and also working with vendor partners on our interoperability testing to prove this out. I have listened and learned a lot and been hit with a strange realization – The silo is ready for a return! 

The early vision of what SDN and NFV was going to deliver for the Telco’s focused heavily on Capex and Opex savings through the simplification of the data centre and network management and better use of the physical resources.  This is essentially a bottom line argument and while compelling, certainly in the short term is not as transformative for the Telco’s as will be the changes yet to come as a result of the total rollout of fully virtualized networks and OSS / BSS systems. 

When a Telco can provide real-time dynamic service chaining of the services requested by their clients: enterprise; retail; and wholesale / partners; they will be able to materially affect the top line growth rather than just the bottom line spend.  This double gain is where the true value comes from the NFV/SDN vision.  An example of this is the recent research Openet have conducted in the area of real-time contextual offers. The potential uptake of these offers, as suggested by the operators surveyed, reflect a $47 billion opportunity that is by and large untapped. That gain dwarfs any saving in Capex on hardware in the network or data centre.

What does all that have to do with Silos, a word that is taboo to almost every Network and IT engineer in the realm of telecoms? The term silo and all it connotes: separate network equipment; separate hardware configuration; separate software stacks; with all the human expertise required to run them has been anathema for as long as I have been working in Telco, and that goes back into the last millennium! The tactical reasons for those silos was absolutely rock solid, a specific customer segment or specific service offering had features and requirements that needed to be met in order for the revenue to flow to the operator.  The downside of engaging in successful business delivered in this manner was the complexity of underlying networks and IT systems and the spaghetti connectivity it delivered, my favourite example being a project I worked on whose focus was to reduce the number of billing systems from forty six to a more manageable ten!  So a whole generation or two of Telco folks and the vendor community have become totally focused on the ‘Unified Call Detail Record’, the ‘Unified Communications Service’, the single bill. 

We have done this at the expense of delighting the customer and moulding a service offering to completely fit their needs.  What NFV and SDN can do is once again offer a path to tailor made solutions, but not at the expense of having to add more hardware and software specific to that service or customer that cannot be repurposed when that subscriber segment or service is not in use or is no longer used at all. 

The next generation of network equipment vendors are emerging which are not even equipment providers at all but software vendors providing virtualized evolved packet core or virtualized IMS on commodity hardware.  The next generation (and indeed current) of OSS and BSS software is providing for virtualized instances and flexibility through software configuration. Add to this elastic scalability, multi-tenancy and enabling a service to segment to easily shrink and grow.  Overall this ability actually provides the ‘silos’ that provide the customer with exactly what they want.

The fundamental and enabling factor of NFV over the traditional silos, is that they can all be combined, into a single management structure. Thus allowing for all the individual flexibility while not having a fragmentation that is impossible to manage. You can have one charging system which is running many instances (each a VNF) and has its individual rules for that market segment, but still controlled from a centralized management and network orchestration layer. This means that while they are now silos (having no direct relationship with other entities) they benefit from having a common infrastructure and management layer, while maintaining all the flexibility benefits of a “silo’ed” infrastructure. This is true multi-tenancy that allows for Telco’s to adopt and individualize their business for different customer bases without losing control.

In the years to come the dream of ‘uniquely marketing to a single subscriber and tailoring the offerings to their exact needs’ will likely become a commercial reality.