SaaS for Telco – Where are the Trade Offs?
January 12, 2022 - David McGlew
Software for other domains has already moved to a SaaS model. Will the CSPs shift the mindset from customisation to configuration?
SaaS is not a new concept, but for Telco grade network software it heralds a new horizon. Up to now, most CSPs have purchased their BSS/OSS software under a licensed CAPEX model. They typically would have spent months gathering technical and business requirements. The vendor would then go away and build the software, deploy it, and then undertake the lucrative process of implementing change requests. A year later, they may get an upgrade in software and if they are lucky this will provide additional capability.
Software for other domains has already moved to a SaaS model. For instance, CRM, Marketing automation, CPQ (Configure, Price & Quote) are all widely available as a per-user monthly subscription on the cloud. The likes of Charging, Policy and Network orchestration specific to Telco have been slower to move to this model. This is about to change, with 5G Standalone being cloud-native, the supporting 5G function also needs to be built and deployed on platforms that maximise the opportunity that cloud unlocks.
We could see a jump in technology terms with this Telco specific software, where it skips standalone SaaS deployment and goes straight to a platform model. This would allow CSPs to deploy multiple different telco specific solutions which, through the use of open APIs, will work together ‘out of the box’. In this case, the CSP would be able to deploy 5G functions such as Charging, Policy, Billing, NEF, NWDAF directly from the cloud. With this platformisation of Telco software, CSPs will be able to avail of some of the key differentiators which cloud computing enables. Scalability, speed and affordability to establish an MVP (Minimal Viable Product) come to mind. If we take speed, we’ve recently seen an instance of 5G charging software deployed in less than 1 hour. In the not too distant past, I’ve seen new charging solutions deployed in a little under 6 months and this was regarded as one of the best-in-class deliveries.
But it’s not the same, some of you will cry, you’re not comparing like for like. You’re right, of course. The deployments which take months and sometimes years reflect the customised CAPEX-style software implementations. Whereas the ‘one hour’ SaaS version is all about configuration over customisation. There is a single version of this software, it’s always up to date and all customers get the same version. Customers can configure the software to their requirements to meet their specific market needs. This will be a big mindset change for most CSP’s who are typically focused on squeezing every ounce of functionality and capability out of each deployment. With the SaaS model CSP’s are unlikely to get 100% of their specific business requirements. It will typically meet 70% of their specific business requirements. While every CSP thinks they are unique, the reality is that there is a lot of commonality in terms of business requirements. As a vendor, we see a lot of commonality among customers relating to the core functional needs our software addresses. What tends to differ is how our customers seek to combine these business requirements to meet the specific needs of their individual markets. What upside will CSP’s get for trading off some of their specific business requirements? Speed to market is one such benefit of a SaaS model. The competitive advantage gained from being first to market is well established with the platform-based SaaS model, allowing CSPs to test the market with a MVP (Minimal Viable Product) and scale up in line with demand without committing greater investment than is necessary. Another factor often cited by CSPs as a bugbear is the continuous cycle of upgrades without an obvious business benefit which causes disruption to IT and Network operations. The SaaS model does away with these cyclical upgrades and ensures the customer is always on the latest version.
With CSPs planning and deploying new 5G functions in 2022, which software models will prevail? Vendors are offering their Telco software under a SaaS model as well as a more traditional CAPEX style licensing agreement but are CSPs ready for a new way of doing business? Will the CSPs shift the mindset from customisation to configuration?