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As a number of factors converge to herald a new software defined shift, and with SD access becoming mainstream, software defined networks (SDN) and network function virtualization (NFV) are increasingly working their way into the wider communications discussion.
But what does it mean for service providers? Why is now the right time to embrace it?
While the terms SDN and NFV are bandied around, the lack of industry education around them poses a potential barrier when trying to link the potential of this new technology and the way we do business more widely.
What this means for how we do business
As the world becomes increasingly digital, it’s impossible to ignore how SD access might influence a large-scale shift to a much more inclusive, flexible and fair way of doing business.
The open architecture of SD access creates a less complex environment in which information can be utilized to create novel applications much more quickly. Its malleable, open source nature makes it interoperable, giving you the flexibility to bolt anything on, big or small, which in turn creates an inclusive digital landscape that allows the offerings of smaller, nimbler start-ups to rub along with the digital giants of the era.
This network flexibility and capability renders new possibilities for providers, working with cloud-based products to provide value-added offerings - which they can monetize. They can classify traffic types on the network in real-time, and make decisions about how the different traffic types are handled across the network. They can offer providers of cloud-based services to whom latency and packet-loss are very important, for example, an SLA (service level agreement) which guarantees their customers an enhanced online experience and boosts the power of their cloud-based offering.
The role of the network provider is shifting from ‘dumb pipe’ to ‘services provider’, with value-added services, which can optimize the offering a service provider takes to their customers. Instead of the incumbent pipeline model, which looks towards and tries to monetize everything from the consumer, networks such as these lead to a two-sided interaction between network and service providers - which better lends itself to a platform-based economy.
As business becomes increasingly digitized, and dependence on the cloud accelerates daily, the transparent, horizontal transactions in environments such as the software defined network provide a great opportunity to start-up service providers, who can go straight to network providers for enhanced services; and the chance for smaller, nimbler network providers to enhance their offering and ultimately add significant value to their business.
Regulators have noticed the potential benefits of this shift to business, and are either responding by softening their stance, or keeping their ears to the ground.
At the FTTH Conference in February, the EU Commission’s director of electronic communication networks and services, Anthony Whelan, recognized publicly that while net neutrality rules were put in place for good reason, the potential to pose an obstacle to service innovation exists, and clarified that although they want to protect against the negative discrimination of OTT services, not at the expense of service providers’ ability to expedite new and improved services. He added that if providers are in breach (i.e. negatively discriminating against other traffic flows), they’ll have to answer to the Commission, but over and above that, they’ll be allowed to apply a higher QoS as they deem fit for different traffic flows.
Of course, EU Commission rules don’t automatically extend to regional territories, and for the UK there is the added uncertainty of Brexit. OFCOM’s attitude has opened too - they are currently in ‘watching and waiting’ mode; a seismic shift from their previous attitude which heralded neutrality as the only priority, regardless whether it may jeopardize innovation. Although their official stance hasn’t changed, a study they’re due to publish on the revised EU Commission stance could change all of that.
Meanwhile, across the pond, the Trump administration is looking to abolish net neutrality: these days, the world’s global superpowers compete financially and America’s leaders have recognized and acted on that. If a country with the scale and resources such as the USA abolishes net neutrality, it will pave the way to utilize the new capabilities that software defined networking can bring, resulting in new business models and new ways of competing.
An ageing net neutrality policy will realize fears of being put at a competitive disadvantage for a country like the UK, which, if Brexit does go through, will only be exacerbated by having to compete against its European neighbors instead of alongside them. That’s why I expect OFCOM’s autumn statement to either declare or project a softening of its stance on net neutrality.
If both of these things happen, British service providers need to stay ahead of the curve if they want to remain competitive and attractive to suitors at the point of exit; for smaller, nimbler companies for whom SD-access is far easier to implement, the argument to do so is doubly compelling.
Whether Britain flies or fails alone on the world stage, we can be sure of one thing: turbulent, exciting times are ahead as the world of business changes fast, and forever. Businesses had better buckle up and get ready for the ride.