Brian Shoda, director of Cisco NGN architecture sales for Asia Pacific, explains that diverting capital from product development to continually scale networks to support demand can stifle innovation and commoditize services. He says there is a better way
CE Supplement: What are the key trends driving the transition in service provider networking?
Brian Shoda: Over the past several years, service provider networking has primarily focused on cost reduction through network optimization, revenue generation and the development of new and innovative products. However, with the explosion of mobile data traffic growth many operators have struggled to control capex as they scale their networks to support demand, often diverting capital from product development to ensure the on-going scalability of the infrastructure. In many markets, this has led to the stagnation of innovation and the commoditization of network services, which, in turn has lowered revenues and reduced margins as operators compete on price to maintain and grow their customer base.
Other factors such as the emergence of the Internet of Things and machine-to-machine communications are forcing operators to rethink how their infrastructures are being leveraged and the importance of their networks. Increasing the modern connected life is becoming reliant on cost-effective, adaptable, scalable and robust operator networks. Network programmability, network virtualization, IP and optical convergence are all trends that aim to facilitate the operator to transition to truly intelligent next-generation networks.
Given the surge in data growth, and unpredictable demand, why is programmability important for telcos?
The massive uptake of mobile services, the growing demand for high-speed residential broadband and the proliferation of services such as HD video, interactive gaming and social media are heavily influencing the approach operators need to take in developing networks, systems and processes. The current industry interest in network programmability focuses on the need for operators to transform their current network platforms from a heterogeneous suite of loosely coupled network and software elements into tightly integrated and well-defined ecosystems of network functionalities. The ultimate goal is seamless automated interaction between the network infrastructure and new streams of revenue impacting future profitability.
The new frontier of network programmability opens a whole new generation of products and services for operators. It is these products and services that operators will use to bridge the divide between the cost of continually scaling their infrastructure to meet demand, and the need to seek new profitable revenue streams.