The pace at which the digital wave has engulfed industries has been velocious. It has profoundly illustrated the critical role of the internet in society, changing the way we work, live, play, and learn. While this shift to digital creates massive opportunities, it also poses an enormous challenge to transforming service provider business models in terms of network and IT architectures.
As we go deeper into the digital world, we will witness transformation aided by technologies like AI/ML, blockchain, edge computing, cloud, metaverse, and IoT-based smart cities/communities/homes. These emerging digital experiences will be more interactive, bandwidth-heavy, and latency-sensitive, generating massive amounts of data useful for valuable analytics. This will further put immense pressure on the networks and will drive the need for mass-scale infrastructure that is intelligent, agile, and efficient. Therefore, keeping all the changes in mind, here are the key technology trends that will shape the service provider industry over the next five years are:
Consolidation and convergence of IP and Optical
Routed optical networking, part of the Converged SDN Transport Solution, simplifies the network by converging services on a unified, automated infrastructure for maximum scalability and agility.
It allows network architectures to scale without the associated costs of inefficient designs and complex operations. Most importantly, it allows service providers to connect more people cost-effectively. This will fundamentally change the economics of the internet, ultimately bridging the glaring digital divide. Additionally, it will bring limitless connectivity, higher predictability, and resilience across existing and new businesses and mission-critical use cases.
Edge computing evolution
5G and edge computing are opening a world of new use-cases across industries. The evolution to cloud-native network functions and distributed cloud computing enables service providers to move beyond traditional connectivity-service models. Service providers can offer an edge cloud platform to enable services for vertical-specific participants, providing more innovation and ultimately enhancing customer experience. It will help deliver intelligent traffic routing from the mobile network to the optimal location of the enterprise application.
Transition to software as a service
According to a PWC study, by 2035, 5G will enable $13.2 trillion of global economic output. However, market saturation and ever-evolving customer expectations have placed continuous pressure on operating costs and operational agility or communication service providers (CSPs).
Everything-as-a-Service (XaaS) offers vital growth opportunities, which could be worth as much as $400 billion by 2025. CSPs could lead the way by transitioning to an open, software-based technology architecture that enables new operating and business models, coupled with cloud-native, data and AI-driven technology. This architectural and software approach has already delivered disruptive results, especially with new greenfield operators such as Reliance Jio and Rakuten in Japan. Achieving these goals will require a fundamental change in how software is architected, built, procured, licensed, and maintained.
Metaverse: opportunities and key success factors
The metaverse has the potential to impact all our lives in an unprecedented manner and bring about behavioural change. Service providers can play a significant role in the metaverse, in enhancing customer experience, monetizing investments through adjacent services, and eventually increasing operational efficiency. Moreover, they can pave the way to becoming co-creators of the metaverse alongside technology giants and online game developers, by leveraging emerging technologies such as 5G, edge cloud, artificial intelligence, etc.
The era of the internet of (almost) everything
The adoption of IoT helps the telecom industry monitor base stations and data centers remotely, ensuring minimal downtime for the network, enhanced business operations, and more revenue generation. Moreover, according to Gartner, by 2025, the number of connected devices is expected to grow to 75 billion. With digital technologies becoming all-pervasive, a high-quality network with last-mile connectivity is essential to create immersive and secure interactions, enhance customer experience, and, most importantly, bridge the digital divide.
The telecommunication sector is one of the most vulnerable sectors when it comes to cyberattacks. The large customer base that service providers deal with makes it a breeding ground for malicious actors looking to gain unauthorized access to their data. The consequences could be damaging to businesses, consumers, and government agencies alike. Service providers must focus on building a robust, integrated, and well-automated cybersecurity architecture to ensure agility and intelligence in threat remediation and facilitate visibility and management of the distributed networks.
Sustainability: the path to net zero
Lastly, sustainability has to become the heart of everything we do. Today, operators and their partners are committing to reduce their carbon footprints over the next decade – in many cases, to net zero. Furthermore, operators are increasing their carbon ‘hand-print’ by supporting their customers to transition to low-carbon businesses. However, it requires new practices, metrics, governance, skills, and investment to turn this vision into a reality. It will create the next level of expectations for the networks we architect, with an increased focus on performance, reliability, ubiquity, security, and openness. This means over a hundred gigabits per second, sub-millisecond latency, and even higher reliability in exceptional cases.
In summary, 2023 looks like a good year for service providers to spearhead digitization for businesses across industries. 5G, with its extraordinary efficiency, will contribute to making technology applications better, more convenient, and cost-effective, opening doors to inclusive and equitable opportunities.
(The author is Mr. Sanjay Kaul, President, Asia Pacific & Japan, Cisco Service Provider Business and the views expressed in this article are his own)