Just over two decades ago, the network was mainly a fixed voice network in widespread use in mature markets but with limited reach in emerging economies. Cellular and the internet were only just starting to appear. Each regional network was built and run by a Communications Services Provider who would acquire the underlying proprietary technology from Network Equipment Providers and charge subscribers to use the network. The resulting networks were largely homogenous with most of the equipment typically coming from a single vendor.
In this traditional model the technology and product roadmap of the Communications Service Provider was the technology and product roadmap of their Network Equipment Provider. The Network Equipment Provider controlled the architecture, interfaces, the hardware and software within the network appliance, and the product roadmap, making it difficult for the Communications Service Provider or others to innovate to reduce costs or create new services. Capital and operational costs were high for the Communications Service Provider, but these costs were predictable and could be recovered over time from a captive subscriber population in a relatively uncompetitive market.
Move forward a short twenty years or so and the industry has transformed. Mobile and Internet are booming worldwide. Traffic has moved from circuit-switched voice to packet-switched data. The network has far greater reach: hundreds of millions of people in mature and emerging economies worldwide now stay connected to the network to regularly access valued consumer services such as streaming and business services such as video conferencing. Capacity is significantly increased and demand continues to grow as more devices connect to the network and services consume more bandwidth. Markets are far more competitive and communications services are increasingly commoditised. As consumers, we pay less and get more. The network itself has become the foundation for the new global digital economy of the 21st century. Happy days.
Scratch the surface of the industry a little and we see the Communications Service Provider’s business model is largely unchanged from twenty or even a hundred years ago. Networks remain largely homogenous and the Communications Service Provider remains locked-in in the long term to the Network Equipment Provider’s product roadmap for proprietary offerings.
With network function deployed as physical appliances, being preintegrated bundles of hardware and software, new services require changing the physical structure of the network and this takes as long as months or even years and incurs the cost of a field workforce. While there has been movement from appliances towards virtualisation to separate hardware and software and enable of more open supplier ecosystem, this has largely failed as Network Equipment Providers do not collaborate to deploy their software on each other’s hardware and network infrastructure is not open to multiple vendors or third party technologies.
The great irony here is that the traditional networks that are the foundation of the Communications Service Provider business are in fact become anchors weighing down the business. With consumers paying less to get more each year, the Communications Service Provider must continuously create new services and provide more bandwidth at a lower cost each year just to remain viable as a business yet is prevented from doing so by the underlying proprietary network technologies, underwhelming Network Equipment Provider product roadmaps and lock-term contracts that commit them to closed supplier ecosystems.
Paradoxically, while CSPs face increasing competition and commoditisation of offerings in an open market, their suppliers do not. Their Network Equipment Provider supply chain is not exposed to the same open market competition and commodification and offering roadmaps remain proprietary, limiting the ability for others to innovate to reduce costs or create new sources of revenue. The CSP’s customer can easily move to a new provider but the CSP cannot easily move to new network infrastructure providers. The CSP is firmly wedged.
Still wedded to the business model and closed supply chain of the 1900s, the Communications Service Provider cannot access the open market to reduce costs or develop new services. Capital and operational costs remain disproportionally high especially when compared with other tech-based service industries such as cloud and hyperscale internet providers. The tipping point has already been reached in highly competitive markets such as India where CSPs are disappearing from the market or are merging but still losing customers to competition. Despite the network itself becoming the foundation for the new global digital economy of the 21st century, the industry that provides the network is in crisis.
How then does the communications move to the open model of innovation, development and collaboration enjoyed by other technology-based industries? Enter Open Source. <Describe Open Source movement and benefits to companies and industries. Give Linux as an example and refer to others eg databases.>
<outline history and value of linux as open source OS, list who is using Linux. List benefits of open source: continuous improvement, collaboration, security, quality>
<outline how Linux has been successful as a result of strong governance and collaboration, without one vendor controlling developments.
In recognising comms sector facing significant challenges due to its over-reliance on prop tech, and wanting to help the industry release benefits of open source of x, y, z, the Linux Foundation in 2018 (?) established LFN as the umbrella organisation.
LFN helps by increasing the availability ad adoption of quality open source to reduce the cost of building and managing networks, giving CSPs the means to:
- significantly reduce cost of the networks on which their businesses depend
- gain control of their network and product roadmap
- introduce new capabilities and service more quickly
- reduce cost of field workforce, eg Rakuten example of reducing field workforce to 30% of what it would otherwise have been.
- automate operations
- commodity hardware
Outline at&t as an example of a CSP that has been public about their strategic intent to harness open source … give examples of at&t open source initiatives and business impact>.
The value of Open Source is also not lost on the US Congress. <outline current proposal to fund open source for 5G to reduce technical hegemony>