13/10/2017 Cloudification will mean upheaval in telecoms

Cloudification will mean upheaval in telecoms
It will allow startups to challenge incumbent operators

Print edition | Business Apr 12th 2017

IN THE computing clouds, startups can set up new servers or acquire data storage
with only a credit card and a few clicks of a mouse. Now imagine a world in which
they could as quickly weave their own wireless network, perhaps to give users of a
fleet of self-driving cars more bandwidth or to connect wireless sensors.

As improbable as it sounds, this is the logical endpoint of a development that is
picking up speed in the telecoms world. Networks are becoming as flexible as
computing clouds: they are being turned into software and can be dialled up and
down as needed. Such “cloudification”, as it is known, will probably create as much
upheaval in the telecoms industry as it has done in information technology (IT).


https://www.economist.com/news/business/21720670-it-will-allow-startups-challenge-incumbent-operators-cloudification-will-mean-upheaval?fsrc… 1/4

to set up a new service. unlike radio spectrum. each in charge of a different function. The shift was evident at the Mobile World Congress in Barcelona in February. which stand for “network-functions https://www. from text messaging to controlling antennae. as the smartphone boom ends in many places and prices of mobile-service plans fall. Yet the most important factor behind cloudification is economic. It takes months. Equipment-makers’ booths were plastered with diagrams depicting new technologies called NFV and SDN. are a collection of hundreds of different types of computers with specialised chips. Telecoms networks.” says Bengt Nordstrom of Northstream. if not years. One is largely unregulated. the Why the North American west is on fire THE ECONOMIST EXPLAINS other overseen closely by government. But powerful forces are pushing for change. And telecoms sharp edges of grief PROSPERO networks are more deeply linked to the physical world. called 5G. Mobile operators badly need to cut costs. The next generation of wireless technologies. says Stéphane Téral of IHS Markit. which is In “Rest”. Charlotte Gainsbourg explores the hard to use efficiently.13/10/2017 Cloudification will mean upheaval in telecoms inRead invented by Teads Latest updates IT and telecoms differ in important respects. a consultancy. “You cannot turn radio See all updates towers into software. The data centres of big cloud-computing providers are packed with thousands of cheap servers. America turns its back on refugees Computing capacity is theoretically GRAPHIC DETAIL unlimited. a market-research firm. requires more flexible networks. let alone a new network. On the technical side. by contrast.economist. the current way of building networks will hit a wall as traffic continues to grow rapidly. powered by standard processors.com/news/business/21720670-it-will-allow-startups-challenge-incumbent-operators-cloudification-will-mean-upheaval?fsrc… 2/4 .

such as SK Telecom in South Korea. These usually plug directly into nearby computers that control the radio signal. If the history of cloud computing is any guide. If widely adopted. it will allow network operators to use cheaper off-the-shelf gear—much as the rise of Linux. In areas where it has already upgraded its systems. By the end of 2017 it wants to have more than half of its network virtualised. SK Telecom’s chief technology officer. AT&T The carrier that has pushed cloudification furthest is AT&T. Even more surprising for a firm with a reputation for caution. they are not letting it show. after computing. have begun consolidating these “baseband units” in a central data centre. are developing software to run networks on off-the-shelf servers. But some operators. Many parts of a network will not get virtualised.com/news/business/21720670-it-will-allow-startups-challenge-incumbent-operators-cloudification-will-mean-upheaval?fsrc… 3/4 . the central high- capacity gear. Alex Choi. Both Affirmed Networks and Mavenir. an open-source operating system. Cloudification may also create an opening for newcomers. argues Marcus Weldon. it can now add to the network simply by downloading a piece of software. which currently form a big chunk of their revenues. chief technology officer of Nokia. https://www. They turn specialised telecoms gear into software in a process called “virtualisation”. AT&T’s chief technology officer. They will make less money from hardware and related maintenance services. Many networks have already been virtualised at their “core”. Affirmed already claims 50 customers. for instance. Mavenir wants to work with underdog operators “to bring the incumbents down”. Still. AT&T has released the program that manages the newly virtualised parts of its network as open-source software: the underlying recipe is now available free. But this is also starting to happen at the edges of networks—the antennae of a mobile network. If equipment-makers are worried about all this. Spin me up.economist. we can just spin up a virtual machine. such as processors able to handle data packets at ever faster speeds. And there will always be a need for specialised hardware. At the same time. says Pardeep Kohli. two American firms.13/10/2017 Cloudification will mean upheaval in telecoms virtualisation” and “software-defined networks”.” says Andre Fuetsch. led to the commoditisation of hardware in data centres a decade ago. “Instead of sending a technician. storage and networking. Nokia and other telecoms-gear-makers will have to adapt. its chief executive. wants “radio” to become the fourth component of cloud computing. America’s largest operator. they will have to beef up their software business.

However things shake out.economist. operators of power grids and internet giants such as Facebook could have a go: they are huge consumers of connectivity and have built networks. fibre networks. a potential Amazon Telecoms Services does not have to spring from the telecoms world. which send calls and data via Wi-Fi hotspots. Startups such as FreedomPop and Republic Wireless already offer “Wi-Fi first” mobile services.13/10/2017 Cloudification will mean upheaval in telecoms the telecoms world may also see the rise of new players in the mould of Amazon Web Services (AWS). As the case of AWS shows. Amazon itself is a candidate. computing power—to provide cheap mobile connectivity. the e-commerce giant’s fast-growing cloud-computing arm. just like IT before it. But a clever entrepreneur may find ways to combine assets—unlicensed spectrum. This article appeared in the Business section of the print edition under the headline "Telecomulonimbus" https://www.com/news/business/21720670-it-will-allow-startups-challenge-incumbent-operators-cloudification-will-mean-upheaval?fsrc… 4/4 . which newcomers will still have to buy. the big barrier to cloudification is likely to be spectrum. another effort to open the network infrastructure. is behind the Telecom Infra Project. for instance. a research firm. But carmakers. expect the telecoms world to become much more fluid in the coming years. According to John Delaney of IDC. Facebook. using the mobile network as backup.