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CTO INDUSTRY INSIGHTS

The Platform Economy


The Platform Economy

Dating back to the eras when Bill Gates and Andy Groves were plotting market domination, they had the foresight, a foresight later evident in the late Steve Jobs, that an ecosystem was required to maximise the potential of their respective products. Positioning their products as platforms with published interfaces, Intel-based PCs were enhanced by innovations from PC component and peripheral manufacturers, similarly Windows OS usage evolved in ways that Microsoft could never have natively realised, while IOS devices bore witness to an explosion in business model innovation that birthed our society of swiping and tapping digital natives reared on instant gratification. In each scenario, the spoils accrued to the platform creators far exceeded those which could have been created if they operated alone.

Traditionally infrastructure industries like telecommunications have been closed, with little to no scope for third- parties to engage with the operators’ infrastructure. In times when said operators were the provider of all services delivered over the infrastructure, this was a perfectly logical stance for them to take.

Alas times have changed. With the proliferation of broadband and the transcendence of all traditional telco services to IP, the floodgates have been opened for Over-the-Top (OTT) competitors to gorge on the cash cows of old world telecoms.

This attack on revenue is raising a multitude of questions about the future role for Telcos, particularly as they face a significant upgrade cycle that will be necessary to remain relevant in the Gigabit society. Are they all destined to become pipe providers, or can they capitalise on the platform success enjoyed by the world’s largest digital firms?

ADTRAN's latest SDX generation of broadband access solutions is being built with MOSAIC open SDN control as its foundation alongside disaggregation. All while leveraging the most powerful chipsets in the industry's history. This will enable network operators to offer benefits to providers of cloud-based services that were previously impossible. With the SDX portfolio's real-time classification capabilities, network operators have the unique potential to build aggregated views of the consumer. Aggregated views that the Facebooks and Amazons of this world can never see. Aggregated views that can greatly improve the effectiveness of marketing tools like dynamic ad insertion, positioning the network operator as the one with the most comprehensive insight into the consumer. This visibility, coupled with the unparalleled packet-handling power in the latest access platforms, when combined with MOSAIC's centralised SDN control, creates an environment where operators can enhance traffic flow management, thus maximising the end-user experience. Whether providing the premium customers of gaming companies with a latency advantage, or reducing content distribution costs by steering traffic to local caches, or augmenting cloud-based enterprise applications with a Service Level Agreement (SLA), there are many ways that a network capable of real-time classification and prioritisation can benefit cloud-based service providers. Such valuable interventions can improve the bottom line of the network operator, by opening up new revenue streams, or facilitating access to more favourable wholesale procurement deals.

Building the network as an open platform for service innovation is a relatively new concept for our industry to consider, as is the ability to monetise the network both toward the consumer and cloud-based service providers. In light of easing positions towards policies like net neutrality, the future construct of digital revenues is at stake. With the potential delivered by MOSAIC open SDN control and the SDX Software Defined access portfolio, the pipe owners have a lot to be excited about.