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Disrupt Yourselves or Be Disrupted
Oct 16, 2015

 

Telecommunication service providers have evolved over the decades, but fundamentally they are still operating the original business model: Build infrastructure and sell services over it. It happened first with voice fixed lines more than a century ago, and more recently with mobile, data and video.

 

Technology evolutions have helped service providers launch new services, gain scale, increase agility and reduce the OPEX through automation. Meanwhile, however, combinations of technical and social transformation have created opportunities for new entrants to disrupt the incumbents:

 

  • New regulatory environment + VoIP technology + broadband everywhere = Skype (2003) disrupting voice market
  • Smartphones + apps + mobile broadband = WhatsApp (2009) disrupting SMS
  • Slow FTTH deployments + high ultra-broadband costs = Google Fiber (2011) disrupting FTTH
  • Drone technology + need of Internet in developing countries = Facebook Internet.org (2014) disrupting rural connectivity
  • Hi-roaming costs + low innovation in mobile services = Google Project Fi (2015) disrupting mobile broadband

 

In many cases, telcos responded – belatedly - with similar services. We’ve seen that over and over again. What about the future? Will that attempt at catching up continue or can service providers get ahead of the curve?

 

The biggest disruptors in the networking space today are SDN and NFV. Many service providers are still figuring out how they can benefit from them. Others just see virtualization as another way to deliver what they are already doing. (CPE vs. vCPE, security vs. virtual security, EPC vs. vEPC).

 

The reality is that there is a lot more behind SDN and NFV than just technology. The main business benefits include:

  • Agile service creation, faster time to market
  • Lower upfront investment, lower financial risk
  • Self-provisioning portals, lower OPEX
  • Automation, higher customer satisfaction
  • Higher asset optimization, reduced overall networking costs

 

(For more on these benefits, see my previous blog: Economic value of NFV.)

 

How long will it take for a new entrant to disrupt traditional telco services with a completely new approach using SDN and NFV? Or will service providers take disruptive innovation in-house? Doing so runs the risk of cannibalizing existing services, but that’s small compared with being disrupted by new competitors.  

 

Disrupting yourself is not easy. It is about challenging all current business by looking it with a new pair of eyes and asking tough questions, such as: How would an OTT provide a similar service to my VPN with SDN? How would an OTT provide the enterprise managed-services with virtualization?

 

Some telecom operators have started this process, and they have found how vulnerable their business is now due to lower entry barriers.

 

Learn how Service Creation is about to change for Enterprise Managed Service providers with Juniper's Cloud CPE solution.

 

This is my Big NFV story. What is yours?

 

                                                     Telephone_operators,_1952.jpg

                                                     (image by wikimedia.org)

Oct 16, 2015
Juniper Employee

If you liked it, you might be interested in reading this other blog by Steve Liput:

Do you want to be the next networking super-power? Here’s how… 

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