Nokia on the role of SaaS for telecom workloads: A vision of a “fully-automated network on demand”
AUSTIN—As virtualization, at this point mature in the core network, is making an impact on how radio access networks are architected and operated, there’s a line of thinking that everything that can be done with software should be done with software. And as the telecoms set embraces software and moves workloads into the cloud to get away from capex-intensive operating models, there’s a parallel line of thinking that if you’re going to consume more and more software, why not consume it as a service?
Speaking with RCR Wireless News on the sidelines of the Big 5G Event this week, Nokia’s Mark Bunn, senior vice president of SaaS Business Operations explained: “If you just trace the history of our industry, 10, 15 years ago, it was dominated by physical assets. NFV was the inflection point. Hardware and software started to be disaggregated. We took the hardware appliances and said, ‘Let’s just use commercial off the shelf appliances where we can.’ Software creates options and COTS accommodates whatever the requirement is. The reality is that the industry has been transitioning from a hardware industry to a software industry. It makes a lot of sense for us, at this time, to think about software as a service.”
This move to virtualization, software, the cloud, open everything really, is a part of Nokia’s strategic evolution. Speaking during the company’s Q3 2020 earnings call, CEO Pekka Lundmark laid it out: “Telco operators will continue to need to support massive capacity demands without commensurate cost increases. As a result, we expect capex to remain constrained as operators will look to drive a step-change in cost effectiveness…The broad trend towards open architectures with increasing virtualization will accelerate. This will be driven by cost pressures as well as the need to increase speed and agility. Adoption will vary widely and a full transition is more than a decade away, but the shift to more open interfaces, virtualization and cloudification, network function disaggregation, AI-driven automation and optimization, is well underway.”
In November 2021 Nokia made its entry into providing operators with SaaS solutions initially with the Nokia Data Marketplace, and articulated plans to develop three primary SaaS suites covering marketplaces, digital enablement and networking. The company said it reckoned there’s a $3.1 billion addressable market in the period running 2021 to 2025. Following in February, Nokia expanded it SaaS offerings to include its AVA Network Data Analytics Function and iSIM Secure Connect for machine and consumer device subscriptions using eSIM and iSIM compatible devices.
Back to Bunn. “Right now I would say we’re largely in a state where we’re in an as a service model today but it’s not quite to the level of automation I’d like to see.” This is an extension of the idea that what can be software should be software—what can be automated should be automated. He gave the example of the massive investments carriers make every year around the Super Bowl; what if all of that hardware-based functionality, with the exception of antennas and cabling, could be instantiated in a distributed cloud and configured to fit the needs of whatever deployment scenario is in play, in this case a large-scale marquee sporting event that often incorporates elements of a consumer-facing tech showcase? “If you had that fully-automated network on demand, network as a service, then that would be relatively easy to do.”
“We’re going down the right path—you’ll probably hear it from CSPs in this forum,” Bunn said. “We’re going down the right path for programmability.”
The centrality in telecom, both today and in the future, of software and service-based consumption models isn’t necessarily limited to the way Nokia or other NEPs engage with operators. It also speaks to the growing role of hyperscalers in the development and build out of the network edge which isn’t just simply adding compute capacity at a base station; it’s more like deploying compute capacity to run virtualized network and other workloads, including baseband processing, at whichever piece of real estate ports to the latency profile of the desired outcome.
Then, when you start to think beyond the macro network to private networks meant to support enterprise and industrial needs, there’s another layer of complexity wherein you might need to bring in a system integrator to fit everything together. The point here is that the relationships between vendors and operators, as well as between multiple vendors working to support an operator or an enterprise, is morphing into something more like an ecosystem, and not just an ecosystem as a buzz word, but an ecosystem that’s quite literally inter-connected, interdependent, and in need of cultivation for all involved parties to realize their desired business outcomes.
“We’re going to see the future state of telecom being dominated by ecosystems,” Bunn said. “It’s just a question of where everyone falls. The history of our industry is that the communications service providers receive technology from their vendors, implement that technology, and they provide services on top of that technology. What’s changing in an as a service model is the ownership and responsibility for management. That has been a paradigm shift in our industry.”