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When the Rubber (Finally) Hits the Road: 2018 Predictions

Looking ahead to 2018, Pravin Mirchandani, CMO, OneAccess Networks, anticipates a year of challenge and opportunity for operators.

Europe Starts to Get Serious about Virtualization

After a long period of experimenting with virtualization technology in their labs, European Telcos (or at least some of them) will get serious about introducing virtualized services for their enterprise customers. This is clearly apparent at Deutsche Telecom, in particular, but also at Orange and BT. I’d still hesitate to predict that we will see many actual service launches in Europe but nonetheless decisions will be taken, budgets will be committed and the new product introduction (NPI) work for virtualized services will begin.

The Cost of White-Box CPEs will be Driven Down but Not by Price Reduction

It’s clear that all the big Telcos are convinced about the benefits of an on-premise white-box strategy and while in 2017 they debated about how to move from grey-boxes, principally from Cisco and Juniper, right now they have a different problem: cost, particularly for the appliance they need for the volume part of the enterprise market, commonly known as the ‘small uCPE’.

Yet if half the cost of a white-box derives from a monopoly vendor – Intel – then, in the absence of competition (hint: think ARM), the only way to reduce costs will be to moderate demands on it. This will come from two directions. The business managers at the Telcos will insist on a smaller set of VNF requirements to reduce the number of cores and memory required (the two key drivers of costs for a white-box appliance) and the VNF vendors will gradually reduce their resource footprint in response to the Telcos’ demands.

The Operators Will Realise that SD-WAN is Actually a Marketing Problem

SD-WAN puts choice in the hands of enterprises and does so at reduced cost with automation removing complexity, a winning combination that is taking business away from many Telcos. So far, the Telcos have looked at this principally as a technology problem: how to build self-select portals to introduce choice for their customers, how to automate their back-end processes and how to co-opt SD-WAN technology without vendor lock-in.

But the real issue is price. A lot of enterprises will want to stick with a single service provider simply for ease of doing business; they won’t want the complexity of dealing with multiple service providers. The operators, however, can only convince them to stay if they package SD-WAN and MPLS at a cost-effective price.

Agility Will be the New Watchword

In part driven by the frontal attack of SD-WAN on their MPLS business, but also associated with the need to accelerate NPI processes, deal with security patches for network equipment, introducing Devops to break-down waterfall processes and organisational silos, agility will be on the lips of many Telco executives. There are multiple translations for agility: let’s stop experimenting in our labs; let’s get down to business and make the promise of these next-generation networks real. In other words, 2018 is when the rubber (finally) hits the road.

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