Cloud-native networks and the future of innovation

This article was first published in Capacity Media on December 16, 2020. 

You can read the original article here.

RtBrick is claiming several trends in the telecoms sphere for 2021, including an increase in the adoption of cloud-native networks by some of the world’s biggest operators and a continued increases in network traffic that will lead to pressures on margins. Pravin S Bhandarkar, CEO at RtBrick, explains.

Like all other industries in 2020, the telecoms sector was also left shaken up by the Covid-19 pandemic. The “new” normal now means that businesses are shifting almost all operations online to ensure business continuity. In fact, the pandemic has accelerated business digital adoption efforts forward by five years according to a recent McKinsey Digital report and will continue to leave a long-lasting impact on how data is managed and transported.

Consumers have also had to adapt to working from home, driving uptake in video conferencing usage as well as content streaming during their downtime, including news, video, gaming and social media. This increase in connectivity has tested operators’ bandwidth limits, as the world turns to the internet for information and entertainment more than ever before.

It’s clear that traditional routing just doesn’t cut it anymore. Despite the huge investments from carriers, we still don’t have enough broadband capacity to cope when broadband consumption surges suddenly, as it did with the start of the pandemic. Infrastructure is struggling to cope; a new approach is needed.

The death of the chassis-based system

In 2021 we will see a drastic shift towards cloud-native networking. Rakuten and their approach to mobile RAN is a prime example of this adoption already underway, and we expect to see this trend move into fixed networks too. The rise of ‘cloud native’ networking means that the days of monolithic chassis-based systems, with locked-in software and hardware from the same vendor are over.

Carriers will also begin to build disaggregated networks that allow for more choice, programmability and reduced operating costs. In fact, TIP (Telecom Infra Project) has just called on the industry to band together and develop an Open BNG (Broadband Network Gateway). This is outlined in a paper authored by industry heavyweights BT, Deutsche Telekom, Telefonica and Vodafone – further proof that this trend is bound to continue developing in 2021.

More network traffic than ever will lead to continued squeeze margins

According to a recent Statista report from October 2020, online traffic across 20 different industries increased compared to the reference period in January 2020, while online transactions have seen a 26 percent rise compared to the index period. In addition, Telegeography mapped out and tracked various network traffic figures during the pandemic, proving that data traffic has surged in various countries around the world, most noticeably in Croatia, Hungary and the US.

Essentially, the growth of internet traffic is not showing any signs of slowing down. Working from home, online learning, streaming content, etc., has led to an increase in online traffic, which increases costs for providers. With customers expecting to pay the same price for their broadband services as they did before the pandemic, despite the additional bandwidth they’ve been consuming, this will undoubtedly lead to tighter margins for providers. This adds more pressure on telcos, as they must look for ways to upgrade their infrastructure to accommodate the surge in demand, without having access to increased budgets. Customers will always gravitate towards the fastest service for the lowest price, so it’s becoming increasingly difficult for service providers to remain competitive.

By adopting a cloud-native approach to networking, we could more than double the broadband routing capacity for the same cost, and just as importantly, migrate to an architecture that allows capacity to be turned up on short notice. A win-win for all involved.