Telecommunication operators will refocus spending saved from the increased use of software and virtualization on innovation, according to Nokia. The infrastructure vendor explained that while arguments around whether software and virtualization will impact CapEx or OpEx have raged for years, the true impact is much broader. “I don’t think this is cost driven,” said Bhaskar Gorti, president of applications and analytics at Nokia, speaking on the move by telecom operators in deploying software-defined platforms. “The net-net costs will not come down. The spend will just get revectored. A lot of the money in the past was on just keeping the lights on and less on innovation. This move will redirect spending into R&D for differentiation.” Others tout the network savings from increased use of automation. “When you take a centralized network and distribute it, it becomes more complex to manage. That’s the opposite of what customers want,” said Mike Murphy, CTO for North America at Nokia, during the recent Mobile World Congress Americas event. “They want to lower operating expense. That then brings in automation, virtualization, and SON [self-optimizing networks].” Murphy’s comments did lean toward potential OpEx savings. He claimed there will never be a CapEx advantage in migrating radio access network (RAN) assets to a virtualized environment. In fact, Murphy said price comparisons from 18 months ago showed a more than 10-times CapEx price difference in favor of not virtualizing RAN assets. That has since moved down to just a 5x or 6x difference. “The whole picture is that in a larger scale and over a longer time period [virtualization] will be more cost effective,” Murphy said. Nokia Software Focus Nokia created its standalone software business last year, taking advantage of the work at Bell Labs it acquired when it purchased Alcatel-Lucent. Gorti said the company has started to see traction with its software moves. “We are seeing traction with customers as part of the overall transformation of the market,” he said. “The people and processes are changing, and it’s become visible within many of these organizations.” As an example, Gorti noted a recent visit to Verizon’s headquarters showed a very different company then what he had seen from past visits. “It does not look like an old telecom facility anymore,” Gorti said. “It’s now very streamlined.” However, he did explain that retraining of the workforce to take advantage of software innovation remains a challenge. “We see a lot of operators working on getting their workforce to think differently with more of a DevOps model, Gorti said. “That’s really a lot of the focus now, and is even something that we are working through internally.” Open Source is Not Free Nokia controls a substantial portfolio of intellectual property patents, though it is in the process of monetizing some of those assets. Even with its portfolio, Gorti said the company is actively taking advantage of open source work as the foundation for many of its software platforms. “Open source is not free,” Gorti said. “It does provide more choice, but you still need to put it together for a business outcome. It makes more sense to spend it there than to go and drill your own oil well.” Nokia is also looking to expand outside of its core communication service provider (CSP) business. Speaking at last week’s Mobile World Congress Americas event, Ricky Corker, head of the North American Market at Nokia, said this includes expansion into large enterprises, the public sector, and public safety. Corker said the efforts will take advantage of the company’s already embedded portfolio of products to go directly to new market segments, as well as working with service provider partners in targeting those markets. Corker added Nokia is also “heavily engaged in the webscale space.” “We continue to believe that’s an important strategy for us, but not forgetting that CSPs are our core business,” Corker said. Nokia CEO Rajeev Suri recently warned that the company expects market conditions to be more challenging this year than it had previously expected and is forecasting a 3 percent to 5 percent decline in 2017. While the equipment maker’s second quarter profitability was strong, the company did report that its network division sales were down 5 percent primarily due to weakness in the mobile sector. “The second quarter showed ongoing challenging market conditions,” said Suri during the investor call.
Home » Fortinet Service Provider Industry News » Nokia Says Software, Virtualization Will Shift Telecom Spending
Hyperconnectivity and IoT Set to Radically Disrupt Cyber by 2019
Hyperconnectivity driven by the rise of the digital-everything economy and the internet of things (IoT) wil...
Most Recent Articles
AT&T's BCE Keynote: 5G & SDN Worlds Colliding
At the Big Communications Event (BCE) 2018 event in Austin, Melissa Arnoldi, president of Technology and Operations at AT&T, spoke about AT&T's path to 5G and the important role software plays.
CSPs bullish on digital transformations in theory but lacking in execution
While communications service providers (CSPs) realize the importance of implementing digital transformation strategies via partner ecosystems, the follow-through has largely been lacking. A study...
BCE Panel: Open Source Makes Telcos 'Nimble'
Open source can drive agility and change, but telcos need to overcome cultural obstacles.
Verizon to Migrate 1,000 Biz Apps and Backend Systems to AWS
The deal bolsters Verizon’s overall operations, but it also boosts AWS’ position among the country’s largest telecom operators. Visit us at www.sdncentral.com for the complete article.
BT tunes white box strategy for disaggregation while developing cloud-native deployments
BT is banking on white boxes to fuel disaggregation on its network while working toward cloud-native and container deployments. BT's Neil McRae, chief architect, said his company was looking at...
Defending Against an Automated Attack Chain: Are You Ready?
Recent threats like AutoSploit bring malware-as-a-service to a whole new level. Here are four ways to be prepared.
Virtualizing the Customer Premises
Universal customer premises equipment (uCPE) systems are growing rapidly, paving the way for new opportunities, lowered costs and increased performance overall.
Virtualization could be key to T-Mobile, Sprint network architecture mashup
While there are no specifics just yet, look for virtualization to play a key role going forward as Sprint and T-Mobile combine their nationwide networks over the next three years.
How Telco Service Providers Can Keep Pace With OpenStack
Telecom providers are increasingly using OpenStack for NFV, 5G, and IoT. The open source platform offers providers options to alleviate the burdens of migrating to the cloud.
Concerns about cybersecurity driving SD-WAN market, report says
With concerns about security and increasing reliance on data centers, North American companies are embracing SD-WAN technology, each investing about $300,000 on average a year.
AT&T Says the 5G Secret Sauce Is in the Software
5G trials from Kalamazoo, Michigan, to Waco, Texas, have helped the company fine-tune its commercial deployment plans.
OpenStack Promises More Focused Edge Work
New strategic initiatives aimed at filling the technology gaps around specific use cases including NFV and the edge.
SD-WAN is Dead. Long Live Secure SD-WAN!
In the age of Digital Transformation, SD-WAN is on the lips of all enterprises and service providers. While the operational and commercial benefits of SD-WAN are clear, the focus on these as...
Verizon: Lack of Interoperability, Consistency Slows Automation
Verizon executive Vickie Lonker thinks both vendors and network service providers can do a better job to move forward faster.
Verizon accelerates business' network virtualization journey with new network bundles
Verizon has taken another step to enable businesses to advance their virtualization plans with its new Virtual Network Services Solution Bundles, a set of tools and services it says can streamline...
Microsoft introduces Azure Sphere to protect your IoT
It's a comprehensive system meant to secure some of the most vulnerable devices connected to the internet.
Verizon Closes the Loop on Virtual Services
New service bundles let customers more easily access virtual services to speed their own transformations, and will lead to self-service soon.
Verizon report: Ransomware top malware threat of 2017, moving into critical systems
Verizon released its Data Breach Investigations Report (DBIR) this morning, the massive, in-depth analysis of last year's security breaches, based on 53,000 security incidents from 67 contributing...
State of SDN and NFV — Hype or Reality?
SDN and NFV are a reality today, but is it the reality that the industry wanted? It's up to the SDN community to set realistic expectations and be candid about the challenges. Visit us at...
CenturyLink Increases Cybersecurity Capabilities Post-Level 3 Buy