COVID-19 has accelerated many trends in networking, including the increasing adoption of health and wellness technologies, the growth in 5G and other advanced connectivity for both enterprises and households, the lockdown-driven rise in gaming, churn among streaming video services, and the decline in viewing share among traditional TV broadcasters.
Most operators have addressed the vast amounts of data coming their way by only gradually evolving their business models and organic growth rather than making radical change. With the pandemic and global supply chain disruptions continuing to make an impact, 2022 stands to be a decisive year for expanding network infrastructure to efficiently meet the ever-increasing demand for bandwidth.
So what do the experts say about the year ahead?
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1. Ecosystem Disaggregation Will Release Incumbent Vendor Stranglehold
“Ecosystem disaggregation trends like open Radio Access Network (RAN), public cloud, and 5G core networks point to a gradual evolution in product architecture from integrated designs toward modular stacks. (…) In other words, the modular nature of key industry trends alters the industry structure because it opens new opportunities for pure-play software vendors to sell, buy, and assemble plug-compatible components and subsystems. This, in turn, gives rise to a diluted degree of differentiation because a population of non-integrated vendors starts to compete with integrated suppliers that occupy a dominant position.”
2. Another Transition Period in The Telco Space
Following interviews with leading Tier-1 service providers, STL Research heard feedback from many that it’s time to move forward in upgrading their networks:
“We are in another transition period in the telco space. We’ve made a lot of mess in the past, but now everyone is talking about cloud native and containers which gives us an opportunity to start over based on the lessons we‘ve learned.” (VP Cloudified Production European converged operator)
“The goal is to automate as much as we can, including automated testing, instantiating, onboarding etc. Up until now, we haven’t been able to achieve this as each of the vendors have their own proprietary tools for their own network functions, no generic tools for a multi-vendor environment. It is still not infrastructure agnostic.” (Cloud Infrastructure Solution Architect Middle Eastern operator)
“With the monolithic approach, there was no agility or flexibility to move to zero touch. Disaggregation will give the choice of choosing using best in class hardware, software and tools to automate the entire lifecycle.” (Executive Vice President, Network Strategy Asia Pacific converged operator)
3. Demand is Growing for New Networking Skillsets
“Tom Willetts, research analyst at Omdia, noted that as the telco and IT industries become ever closer, ‘network automation and cloud-native skillsets are becoming increasingly more valuable.’” explained Light Reading’s Anne Morris.
“Operators need to get better at engaging with younger talent and offer good remuneration packages and progression opportunities. Operators should also invest in upskilling existing employees with crucial IT skillsets to help close key skill gaps within the company.”
STL Research received feedback from IT and Network Strategy European group operator that “our own teams have to evolve: we have to develop software skills inside our network team, and network knowledge in software teams but it doesn’t happen overnight. You won’t suddenly transform a network expert into a software expert but you do have to minimise the gap.”
4. Edge Infrastructure Moves Ahead
According to IDC Research, worldwide spending on edge computing is expected to be $176 billion in 2022, an increase of 14.8% over 2021.
“In the service provider segment, a five-year compound annual growth rate (CAGR) of 21.6% reflects the edge infrastructure buildout underway to deliver edge cloud services. For enterprise edge technology buyers, growing at a 14.1% CAGR, provisioned services such as IaaS will grow significantly and capture an increasing share of total expenditures over the forecast period.”
Marcus Torchia, research vice president, Customer Insights & Analysis group, IDC
5. Onset of Intra-cloud Networking
“By the end of 2022, I think all the public cloud providers will be offering things that will effectively compete with operator services. The starting point will be intra-cloud networking designed to encourage enterprises to create a global front-end in a single cloud, linked to multiple data centers within the cloud itself.”
6. Increase in Disaggregated Chassis Deployment
“We expect an increase in Fixed Disaggregated Chassis announcements at a customer and vendor level throughout the end of 2021 and into 2022. We believe this will help set up the next upgrade cycle to 800 Gbps and 1.6 Tbps as customers learn and become comfortable with this new topology with 400 Gbps solutions currently shipping and begin demanding more from vendors in future platform updates.”
2022: Where is Networking Going?
Sterling Perrin, Sr. Principal Analyst at Heavy Reading, explained that service providers have a long list of ‘wishes’, “When it comes to what operators are looking for in their next-generation IP networking suppliers, the list is long. Predictably—given the architectural focus on lowering costs— lowest total cost of ownership is crucial, but so are common management and orchestration, disaggregation of software from hardware, and support for cloud-native. (…) Collectively, these key requirements form a blueprint for the next generation of IP networking equipment.”
To stay competitive in 2022, telecom companies must be imaginative and daring in considering options for the next steps in building networks. As the landscape changes, and the effects of the pandemic subside, operators must be alert, analyze opportunities, and ensure that they can expand into new areas and technologies — quickly. Doing so will allow them to escape the endless vendor-lock spiral, and remain competitive in the face of uncertainty.
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