Applications are king and how that is affecting investments in carrier infrastructure

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Network upgrades are focusing on increasing revenue streams from burgeoning areas such as mobile applications, cloud services and M2M service platforms.  In the near future, carriers will focus their infrastructure investments on beefing up their intelligence, session management, bandwidth assurance and optimization and are doing so by investing in software-centric infrastructure.  This software centricity  has made an application strategy and more specifically application modernization  a strategic imperative for carriers so that they can reduce cost and complexity while leveraging  their investments in the evolving ecosystem.

Two hot technologies:

  • Network Functions Virtualization (NFV) helps reduce CAPEX, OPEX, power consumption and space utilization by using virtualization to consolidate network equipment types and functions onto standard servers. NFV will include session border controls and will also have IP Multimedia Core Network Subsystem (IMS) and other applications that can run on hypervisors in server farms.
  • Software-defined networking (SDN) can make Virtualized networks-as-a-Service  (NaaS) viable. SDN is a hot topic in networking in the virtual era ecosystem. Virtualizing the network can collapse costs by 70% or more in some areas, such as the evolved packet core, and enable carriers to offer more platform-based services and bring innovative products to the market quicker. Additionally, SDN will give carriers greater centralized control over their networks through a well-defined interface. It will still take some years until networks begin fully running on software. The trend towards cloud-based offerings such as voice-switching applications running on hypervisors on standard servers is a clear indication that carriers are moving towards software-defined networking.

What does this mean for investment in Carrier Network Infrastructure?

  • Software upgrades will become the prevalent form of network upgrades rather than incremental unit sales.
  • Focus will be on lifetime value. The cost of technology per bit is decreasing for carriers. In order to remain profitable, equipment vendors will have to focus on software-based solutions and more specifically the value-add and expertise they can offer the carrier rather than feature-based hardware comparisons to their competitors.
  • OPEX will be used by carriers rather than CAPEX to upgrade and maintain their networks. Automation of manual processes is an area where operators are focusing on operational efficiencies as a means of cutting cost. Application modernization will be an important conversation for all of these endeavors for carriers looking to attain profitability after important investments on, for example, LTE. 

Interested in learning more about Dell Application Modernization Services? Please click here to contact our team. Follow me on Twitter at @ElizabethAtDell.  

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