"Continuous Transformation, By Design"
Technology transformations have occurred through time. I don’t wish to date myself, but do recall growing up on LP records and cassette tapes. They were around forever, right? In the 1980s, CDs replaced them, almost completely. Then, iPods took over in the early millennia. Now, in just a few years’ time, music apps are how we listen to our favorite tunes. Similarly, Nokia and Blackberry lost their dominance in the mobile phone market, seemingly overnight, with the ubiquity of smart phones we replace every other year.
The Only Constant is Change
Call it what you like – evolving technologies, planned obsolescence – the point is that the cycle of change is occurring faster and new agents of technological enablement are driving continuous transformation. For telcos, it's shorter product lifecycles (think: DSL to IP and mobile analog through to 5G.) These catalysts bring about disruptive business models, tremendous innovation and XaaS-based offerings. The only constant is change.
With intense pressure to capture market share, grow the business and enhance customer experience, it’s no wonder that digital transformation (DX) is on everyone’s agenda. More than half of telecommunications execs recently surveyed by Forbes Insights and Hitachi believe they'll achieve DX within two years.
Yet, the telecom industry is fraught with unfolding dynamics. It's no secret that some cloud and NFV strategies have been less than successful. The excitement of 5G network rollouts, BI data science and new IoT traffic patterns are subdued by inescapable regulatory frameworks, the multiplicity of technology stacks, escalating cost structures and maturing over-the-top (OTT) competition. And, then there's web-scale IT on the carrier horizon.
DX is not a do-it-and-done phenomenon. It's about ensuring that the business will continue to grow and thrive, regardless of changes known and unknown. So, how will Telco’s attain meaningful and continuous business transformation?
I believe the answers lie in procuring technological relevance. We're in the 4th industrial revolution, an unprecedented era of digitally connecting things, people, data and processes. Telcos need to truly modernize these digital ecosystems to better compete with disruptors such as Netflix, WhatsApp and others that offer – and deliver – one-click services. When an organization in the digital space fails to achieve market stickiness, it doesn't take long to connect the dots to an underlying lack of mass agility to scale and adapt.
Good examples of relevant technologies for DX include software-defined networking (SDN), virtualization, open source and digital eco-system management. All are agile, scalable and integral to digital success. SDN orchestrates and automates distributed network services to extend cloud-like "as-a-service" experiences to end users, who want granular visibility and control of their digital environments.
Virtualization is the potential enabler of universal, web-scale agility and better capacity utilization. By virtualizing everything to be limber and scalable, telcos reduce dependency on costly IT capital and can grow the network on demand.
Open source is quickly gaining traction as a game changer. The role of open source has morphed from production environments to supporting new markets, networking strategies and B2B opportunities.
Build It, and They Will Come
Coalescing and managing relevant technologies means new ways to design, deploy, manage and scale networks and services while fostering fresh revenue-generating services. Better programmability of network elements supports greater automation and algorithm control while reducing opex. We're talking about digitally transforming business to embrace how services are consumed.
For example, think about strategically decoupling software from hardware. Start by using customer off-the-shelf (COTS) hardware, also known as white box networking, which relies on generic switches, routers and chipsets rather than proprietary silicon chips. Decoupling shifts the balance toward networking "software-ization" for reduced capex.
Digital ecosystems management (DEM) and microservices-led architectures are worth mentioning here. DEM is a growth strategy using digitally native technologies with massive interoperability, openness and flexibility to reinvigorate backend legacy systems and liberate data. Microservices architecture enables continuous delivery, resilience and deployment of large, complex applications via loosely coupled services.
The transformation process below suggests that an overall SDN architecture would ideally precede the NFV process, logically if not always chronologically, to navigate through the shifting myriad of technology choices while never losing sight of your big-picture DX goals.
Telcos are supremely situated to create intentional opportunities for innovation. It just requires a perpetual cycle of digital transformation. At Hitachi Vantara, we call this Continuous Transformation, By Design. If you build a predictive, responsive, end-to-end digital ecosystem, one where agility is native, where automation, orchestration and scale produce a delivery service model that breathes with you – they will come.
I look forward to your comments. See you here next time, when we further explore must-have capabilities.