2020 saw a shutdown in both supply and demand which has effectively put the brakes on many economic activities and forced a complete rethink on how to continue doing business and maintain social interactions. The COVID-19 pandemic has accelerated digitalisation of consumers and enterprises, and the telecommunications industry has been the pillar which has kept the world ticking over. The rise in data use coupled with the fervent growth of the digital economy augurs well for the telecom sector in 2021.
Ecosystm Advisors Claus Mortensen, Rahul Gupta, and Shamir Amanullah present the top 5 Ecosystm predictions for Telecommunications & Mobility trends for 2021. This is a summary of the predictions – the full report (including the implications) is available to download for free on the Ecosystm platform.
The Top 5 Telecommunications & Mobility Trends for 2021
- The 5G Divide – Reality for Some and Hype for Others
Despite the economic challenges in 2020, GSMA reports that the global 5G subscriptions doubled QoQ in Q2 2020 to hit at least 137.7 million subscribers. This accounts for 1.5% of total subscribers – and is expected to rise to 30% by 2025.
The value of 5G will become increasingly mainstream in the next few years. 5G offers a tailored user-centric approach to network services, low latency and significantly higher number of connections which will power a new era of mobile Internet of Everything (IoE).
However, there are many operators who are still sceptical about 5G. In the US, many operators failed to get any tangible positives from 5G. In the near term, many operators will continue to evolve their 5G capabilities – a full grown standalone 5G technology implementation in some verticals might take longer.
The unsuccessful launch of 5G by the US operators does not mean that 5G is a failure, however. It also implies that we need to look at other geographies to lead us into 5G – and Asia Pacific may well emerge as a leader in this space. China, for example, leads the drive in 5G adoption; and 5G smartphones account for more than half of global sales in recent months.
- Telecom Operators Will Accelerate Digital Transformation
Telecom operators are facing increasing demands for cutting-edge services and top-notch customer experience (CX). The global pandemic has caused revenue loss, due to struggling economies and many operators will aim to reduce OpEX to circumvent these financial pressures, raise the quality of CX and retain existing customers. To realise this, there will be much focus on improvement in efficiencies, better operations management as well as improving the IT stack. These digital transformation efforts will enable rapid and flexible services provisioning, which will be better prepared for the tailored services customers now demand.
Many operators are increasingly incorporating cloudification alongside the 5G network deployment. Operators are moving towards transforming their operations and business support systems to a more virtualised and software-defined infrastructure. 5G will operate across a range of frequencies and bands – with significantly more devices and connections becoming software-defined with computing power at the Edge. Operators will also harness the power of AI to analyse massive volumes of data from the networks accessed by millions of devices in order to improve CX, ramp up operational efficiencies as well as introduce new services tailored to customer needs to increase revenue.
- Remote Working Will Transform Telecommunications Networks
The changing patterns in peak network traffic and the substantial movement of traffic from central business districts to residential areas require a fundamental rethink in network traffic management. In addition, many businesses continue to ramp up digital transformation efforts to conduct business online as physical channels will remain limited. Consumer onboarding will also be fervent, as organisations look at business recovery – resulting in increase in bandwidth requirements.
The increasing remote working trend is amplifying the need for greater cybersecurity. Cybersecurity has catapulted in importance as the pandemic has seen a worrying increase in attacks on banks, cloud servers and mobile devices, among others. Cyber-attack incidents specifically due to remote working, has seen a rise. A telecom operator’s compromised security can have country-wide, and even global consequences.
- SASE Will Grow – and Sprawl
Although it was perhaps originally seen as an Over-The-Top (OTT) provisioned competitive service to operators’ MPLS services, many telecom service providers have been embracing SD-WAN over the years as part of their managed services portfolio. “Traditional” SD-WAN offers some of the flexibility needed to address the change towards a more distributed access and the workload requirements that the pandemic has accelerated – the technology does not address all of the issues related to this transformed workspace.
Employees are now working from a variety of locations and workloads are becoming increasingly distributed. To address this change, organisations are challenged to move workloads and applications between platforms, potentially compromising security. Despite all the challenges that the pandemic brought with it – both human and technical – it has also provided organisations with an opportunity to rethink their IT and WAN architectures and to adopt an approach that has security at its core.
We believe that secure access service edge (SASE), which is a model for combining SD-WAN and security in a cloud-based environment, will see a drastic rise in adoption in 2021 and beyond.
- OTT Players Will Continue their Expansion in the Telecommunications Space
Facebook, Google, Amazon are no longer considered as web companies as they moved from standalone ‘web’ companies to become OTT providers and are now significant players in telecom space. With the Facebook-Jio deal in India earlier this year, and with Google and Amazon actively eyeing the telecom space, these players will continue to explore this space especially in the emerging markets of Asia and Africa. There are telecom providers in these countries which will be prime targets for partnerships. These operators could be those that have a large customer base, are struggling with their bottom lines or are already looking at exit routes. OTT players were already offering services like voice, messaging, video calling and so on which have been the domain expertise of mobile operators for a long time. The market will see instances where telecom providers will sell small stakes to OTT players at a premium and get access to the vast array of services that these OTT providers offer.
Juniper Networks has entered into an agreement to acquire Massachusetts-based 128 Technology for USD 450 million that will enhance its AI-driven enterprise networking portfolio. The deal is expected to close by the end of 2020. The combined portfolio of 128 Technology’s Session Smart™ networking and Juniper’s Mist AI platform will bolster Juniper’s AI expertise in SD-WAN technology.
Ecosystm Principal Advisor, Ashok Kumar says, “Juniper Networks has been a major player in enterprise networking from the core to the edge of the network with SD-WAN, WLAN, and AI-driven applications aware network products. Juniper had strengthened their enterprise networks portfolio with the acquisition of WLAN vendor Mist Systems in 2019 which provided cloud-based management and an AI engine. With Juniper’s acquisition of 128 Technology the network transformation process in the industry will continue.”
The platform created by 128 Technology bases decisions on real-time sessions instead of legacy static systems and networking approaches. The newer system created through this by Juniper will use AI to automate sessions and policies for a full AI-driven WAN operation – from initial configuration to customisable actions across various levels, and AI-driven support.
In addition to this, the automation is expected to reduce overheads, minimise IT costs and deliver better client and user-experience through automated network optimised for client-to-cloud. The two companies also aim to optimise the network and user experiences for voice, 5G and collaboration. Juniper continues to evolve the enterprise networking portfolio adding to the acquisition of WLAN start up Mist Systems for USD 405 million last year. Juniper’s AI -driven SD-WAN and networking products and services for enterprises and end-users is a step towards smart LAN and WAN environments.
A recent study on The Future of the Secure Office Anywhere, conducted by Ecosystm on behalf of Asavie found that 56% of global organisations are looking to improve employee experience, as they look beyond the COVID-19 crisis. The feedback from over 1,000 business and technology leaders globally, also finds that 55% of the organisations are also focused on digital transformation. This will require a re-evaluation of enterprise network solutions, to give employees seamless access to company resources as they continue to work remotely.
“Enterprise communications is being transformed to a user-centric, session-oriented distributed model from a legacy network-oriented centralised WAN model. In the new remote working environment of Office Anywhere, the traditional use of VPN in combination with first-generation SD-WAN will become an impediment going forward. Enterprises will need to re-design networks to address each end-user’s unique needs and their access to applications and all business resources as though they were a Branch of One.”
Last week, HPE announced that they will acquire Silver Peak – the wide area networks (WAN) specialist, including WAN optimisation and Software-Defined (SD-WAN) – in a deal worth USD 925 million. The move is in line with HPE’s Intelligent Edge strategy and their intention to provide a comprehensive edge-to-cloud networking solution.
HPE Building Intelligent Edge Capabilities
In 2018, HPE announced their intention to invest USD 4 billion over the next 4 years, to build an Intelligent Edge offering. This acquisition will give them the ability to combine the Aruba Edge Services platform with Silver Peak’s SD-WAN platform, to provide next-generation networking solutions.
In 2015, HPE acquired Aruba for USD 3 billion to strengthen capabilities on integrated and secure wireless technology and to support the access to cloud application, at a faster speed. Bringing together the innovation and technology capabilities of both units will accelerate HPE’s edge-to-cloud strategy to enhance distributed cloud models for application and data services for users.
Ecosystm Principal Advisor, Ashok Kumar says, “HPE leaped into the wireless local area networks (WLAN) space with the acquisition of a major enterprise Wi-Fi network vendor Aruba Networks, five years ago. With the acquisition of SD-WAN vendor Silver Peak last week, HPE extends enterprises’ reach with its Intelligent Edge portfolio. The synergy of Aruba and Silver Peak provides a fuller enterprise networking portfolio of solutions for HPE.”
The acquisition has been announced as markets are gearing towards recovery and organisations are opting for a more distributed working environments with remote employees. Kumar says, “The convergence area of networking and security at the enterprise edge is a high growth area that has accelerated due to the COVID-19 pandemic to address the remote worker’s needs.”
The current situation, compounded by the 5G rollouts in several global markets, is also forcing telecom operators to transform their business models. Telecom providers will now have to increasingly target B2B opportunities. Last month also saw HPE announce their Edge Orchestrator, a SaaS offering bringing lower latency, optimised bandwidth and improved security and privacy for telecom providers and their own enterprise customers to take advantage of 5G. Aruba Networks also rolled out a cloud native platform, Aruba ESP that has AIOps, Zero Trust network security and a unified infrastructure for data centres capabilities, to support remote operations.
“HPE’s success in this area will be dependent upon the tight integration of the two product line portfolios, and the channels of distribution, to effectively address the needs of enterprises at the edge with smarter solutions,” says Kumar.
The Growing Importance of SD-WAN
In the report, The Top 5 Telecommunications & Mobility Trends for 2020, Ecosystm had noted the growing significance of SD-WAN for enterprises, as they undertake Digital Transformation (DX) journeys and require more responsive and self-sustaining networks. The entire network infrastructure will have to be software-centric allowing for agility, scalability, and normalising costs with business growth. This has proved to be especially true in the wake of the current crisis.
“The network is a foundation on which a significant amount of Digital Transformation (DX) becomes possible, so as companies move through their DX journeys, often changing course, the network will need to adapt with them. AI, virtualisation and SD-WAN will bring increasing levels of flexibility as they lessen the need for specialised hardware, centralise control, and speed up configuration changes.
The availability of high-bandwidth, low latency networks coupled with SD-WAN will allow enterprises to shift away from thinking of their network as a physical space and start seeing it as a set of capabilities, taking work beyond a physical address. Equipment will be increasingly centralised in data centres (possibly on the Edge) to provide the ability to truly work anywhere.”
Download Report: The Top 5 Cloud Trends For 2020
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