Becoming a dumb pipe?
But still, for many years now, “becoming a dumb pipe” has been considered one of the most horrifying nightmares of any network owner. This has to do with the poor business prospects derived from just being the supporting network infrastructure.
It’s no secret that the networking business is not as lucrative as it used to be. From a one-stop-shop for any networking and application need, networks face the threat of being reduced to a thin-layer of connectivity, just providing access to the cloud-based application world. The revenue split between connectivity and content is heavily biased toward the content side with the over-the-top (OTT) service model becoming a mainstream go-to-market strategy, prompting the cord-cutting trend for many once lucrative service provider services.
This is true, by the way, for both residential-focused services and business/enterprise-oriented offerings. While the former is losing ground to OTT based services, the latter is fighting none other than the world’s largest cloud-service providers, like Amazon Web Services, Google Cloud and Microsoft Azure.
So, how can you avoid waking up to your dumb pipe nightmare?
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How to avoid the dumb pipe trap
Step #1: Don’t be (just) a pipe
“Move up the value-chain” we say. This means providing value-added services and not just the connectivity services. This should start with implementing networking adjacent services such as security, moving up to content and applications.
Step #2: Don’t be dumb
Your main business is still connectivity, but that doesn’t have to be a “dumb pipe” connectivity. Many applications require awareness of the networking layer. This requires an application-aware network that routes application-specific traffic according to a matrix which is far more complex than your standard “shortest path first” routing decisions. The parameters that could be considered are capacity, latency, workload placement, or app-subscriber distribution etc.
Those applications can come from the gaming realm, financial applications and AR/VR use cases, creating an opening for higher-SLA connectivity services which can further drive new revenue streams for the service provider.
Step #3: It is all in the cloud
While steps 1 and 2 focus on what you need to do, Step #3 is about how you should do it. Providing new services and making the network aware of the applications it serves is not a trivial task. In fact, in order to achieve those targets and fend off the cloud service providers, you should build your network like a cloud. Building a cloud-native network creates an environment in which there is no dependency on specific hardware to achieve new functionality. Moreover, the distributed nature of such a network allows operators to deploy new services by simply pushing new workloads to an already existing universal hardware infrastructure. Making the network application-aware is also an inherent bonus in building the network using a cloud-native architecture.
Be the right pipe
So, yes. at the end of the day, it is still all pipes. But there are pipes and there are pipes, and you want to be the right type of pipe, the cloud-native type of pipe.
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Pursuing Hyperscale Economics: What, Why and How Telcos Can Do It