Today we published a pair of reports looking at the impact of a handful of new technical and commercial developments in telecommunications networks promise to change the network landscape beyond recognition.
The combination of 5G, network disaggregation/virtualisation, edge computing and private networks promise a radical shake up in who produces infrastructure, operates networks and provides services. Telecommunications equipment vendors face a radical shake up of their market thanks to Open RAN and similar initiatives, which may create big opportunities for network operators and others to innovate with new services. At the same time there is a radical shift of network capabilities to the edge. Big trends threaten to completely upset the status quo for how network services have been delivered. This report examines the trends and looks at how they might shape the telecommunications landscape in the next decade for infrastructure providers, network operators, communications service providers, cloud developers and others.
Based on these key developments, which are explored in detail in ‘The move to 'Network New Normal’: how 5G, edge computing and network disaggregation are creating radical disruption’ , a 'Network New Normal' is coming. Innovation is becoming democratised with the result that we expect to see the development of some ground-breaking new communications services. As part of the shift, network disaggregation/virtualisation increasingly blurs the lines between the traditional roles of infrastructure provider, network operator and cloud services provider. At the same time the delivery of network services is seeing a big change, becoming much more distributed courtesy of edge computing and 5G. These trends present opportunities and threats for all parties, but most likely creates the biggest headaches for infrastructure vendors. Network operators will have to tread carefully to avoid web-scalers dominating the market for provision of enterprise services. Consolidation, particularly involving players in different elements of the traditional value chain, will increase.
These developments are of particular interest to web-scale companies, such as AWS and Microsoft, who have been showing lots of interest recently in the world of telecommunications. Recent acquisitions from Microsoft of Affirmed Networks and Metaswitch Networks point to an aggressive approach towards developing new telecommunications services in a newly disaggregated world, and both they and others including AWS have been bolstering their edge offerings.
Our second report ‘The Network New Normal: how web-scalers are gearing up to take advantage of 5G, edge computing and network disaggregation’ looks at the development from the perspective of the likes of Amazon Web Services, Google, Microsoft and Rakuten, how they have been catalysts for this change and how they might benefit.
This is the age-old story of technology evolution shifting the playing field, creating new opportunities and threats. The web-scale companies’ interest is obvious: they want greater control over delivery of their services to enterprises. Microsoft has been the most active in pursuing the opportunities presented by the Network New Normal, establishing a strong position to innovate on new networking and edge services. The AWS approach has been much more focused on working with telecommunications network operators, although its IoT offering is still somewhat competitive. Google is even more focused on being a supplier rather than competitor to the network operators in enterprise services. However, its focus on supporting cloud-based delivery of products from existing vendors to existing service providers is rather one-dimensional and risks missing out on the opportunities presented by these new developments. The company that seems to be doing the most to single-handedly blur the boundaries is Rakuten, being at once a mobile network operator, cloud services provider and telecommunications software vendor.
Substantial changes are coming to telecommunications networks, how services are delivered and by whom. We are just at the start of the shift to a Network New Normal. The implications will be significant.