Until a few decades ago, telecom networks were associated exclusively with voice transmission over fixed line phones. Since then, these networks have expanded in scope to not only relay voice but also data, video and images over a variety of devices while using both wired and wireless delivery systems.
As the convergence of these communication technologies has steadily gained momentum, it has begun to exert pressure on telecom operators to step up their networks to a transformed playing field. This trend is being fueled by two exigencies. First, the course most enterprises are taking is turning to cloud for nearly all their computing and communication requirements. Second, is the growing consumer demand for precise, highly individualized functionalities that telecom companies can only meet by rethreading their networks to become more lithe, iterative systems enabled to offer highly differentiated functions.
Let us look at some of the ways then in which ‘network as a service’ is projected to pan out. As the demand for high-speed internet connection grows at a steady clip, telecom operators can consider offering a variety of price models for tiered levels of bandwidth. Enterprises can be told to pay a standard amount irrespective of how much they use until a certain point after which higher rates set in, especially during peak traffic times. On their part, telecom operators can ensure that connectivity bundles offered at these special rates live up to their higher cost with glitch-free network quality, while also facilitating other users to avail fixed, lower rates for bandwidth speed during non-peak hours.
Another key functionality that telecom carriers can consider when transiting away from providing networks as only infrastructure is enabling enterprises to gain the advantages and cost-efficiencies of virtual private networks. Offered already by players such as Amazon Web Services or AWS, VPNs can offer companies bespoke security and protected resources within public networks like the Internet.
But even more important, than the above two examples, is the way that network as a service can help lower enterprise Op-Ex. This is because the value proposition that lies in choosing anything ‘as a service’ is that companies can pay for things on a monthly basis over an extended period of time instead of paying up a large sum immediately. For example, enterprises tend to typically purchase far more ports than they need. This is because they factor in future growth and ready themselves to make an early investment to prevent buying new hardware for new capacity a couple of months down the line. However, what they end up doing is paying for ports that they may never use.
When network service providers step in and offer network as a service, these very companies are enabled to prevent such gross miscalculations by choosing to buy only as many ports as they currently need and upgrading their purchases according to requirements rather than projections.
In fact, what a true network-as-a-service offering does is break down the acquisition and management of network equipment into its separable elements. First, it helps businesses rethink their purchases so that it is more accurately based on consumption requirements—either on a ‘per-port’ basis or based on network usage. As a result, companies need to pay only for what they are using and then grow the deployment of their network capabilities as required. This will help businesses save a significant amount of their resources in comparison to prevailing purchasing patterns.
Additionally, the expenditure that companies typically incur on network spending moves effectively to an ‘Op-Ex’ model where businesses pay ‘per use by month’ fees for a network. This creates a more transparent spending pattern which companies find by and large far easier to budget for. The model also ensures that enterprises undergo more timely network upgrades. This is because a pay per use model incentivizes businesses to upgrade their network product at the end of every contract cycle thus ensuring that companies have the most up-to-date technology. This contrasts with what tends to currently happen, where companies compelled by the pressure of having payed hefty annual fees attempt to mine every functionality out of a switch even when it is way past value.
Further, when network upgrades take place more reliably, it automatically prevents enterprises from having to deal with the expensive fallout of dealing with inconsistent software and features deployed across the network.
But more than anything else, what is clear is that as telecom operators wake up to the immense opportunities for growth present in offering network as a service, the converged telecom market will only readily make room for another entrant that promises to transform network as a barrier to an area of innovation and expansion.