In 1859, Charles Darwin set out his theory of evolution by natural selection. The concept was simple, but powerful: individuals best adapted to their changing environments are more likely to survive and reproduce.

The telecom industry is undergoing several transformations at the moment, all converging and occurring simultaneously, forcing disruption and change. The only way for communication service providers (CSPs) to survive this “digital darwinism” is by adapting, evolving, and embracing cloud-native architecture as the next phase of digital existence.

Digital darwinism and the path to cloud native

New technologies are changing the way customers (private and commercial) and communication service providers (CSPs) interact and introducing a new demand for how communication services are delivered.
 
First, we’re seeing a digital transformation process under way, a general term that refers to accelerated transformation of business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies and their impact across society.

The digital transformation is powered by an unprecedented data transformation, which refers to how organizations and individuals mine, process, understand and take action on data. Additionally, analytics and artificial intelligence are becoming more powerful, user-friendly, and ubiquitous.

These transformations are contributing to another change in landscape, which is already well underway: happening, workforce transformation. We’re seeing big changes in the need for remote connectivity, especially from enterprises looking for private wireless services.

Finally, we are seeing a major infrastructure transformation that is also a major business paradigm shift, with the move to the cloud and to as a service (aaS). This transition is happening across industries, permanently changing how services and applications are consumed, paid for, and maintained.

The laws of nature equally apply to the business world: digitalization rapidly changes technology and society and forces companies to adapt fast enough – or die. Migrating to cloud-native is an evolutionary step that CSPs must take in their digital journey.

Cloud architecture challenges and solutions

For communication service providers, the top three objectives are: are – 1) increase my top line 2) improve my bottom line and 3) improve my customers’ experience.

Despite their best efforts, most CSPs are fighting just to keep up with the unprecedented pace of technological change — and too many are falling behind. Telcos everywhere are grappling with slower growth, tightening regulation and are struggling to reduce their operational costs.  

5G offers an opportunity for CSPs to reclaim their leadership position – expanding their reach to larger audiences, offering new services and a more efficient, automated mode of operation. They have (and still are) investing a lot in 5G radio and transport.

But connecting a 5G radio to a 4G core offers only limited options for monetization. While eMBB could be a source of additional ARPU (for example – higher bandwidth TAARIF rates), connecting 5G radio to a standalone 5G core offers a blue ocean of new opportunities.

As far as bottom-line improvement, the solutions to date are far from open and vendor-neutral, which means that the ability to monitor, optimize and modify is limited at best. Performance has been acceptable, but nothing to write home about, and not yet proven at mass scale.

In addition, the initial telco cloud mostly ported big network elements into big virtualized network functions (VNF). These are too big, consume too many cloud infrastructures resources, and use legacy operations. They’re unwieldy to deploy, scale, upgrade and maintain.

Many of the legacy operations are manual. They simply aren’t fast enough to deal with the hundredfold increase in operational activities that come with cloud and 5G’s many devices, services, and slicing.
It’s complex cloud architecture to manage. After doing all that setup, actions such as integrating and upgrading simply take too much time and effort.  

The path to cloud-native architecture

For 5G, service providers need more from the cloud. Cloud must be re-architected to cloud-native architecture, so they can get breakthrough business agility in rapidly onboarding new apps and deploying and operating new services.

The scale of 5G brings many more devices and a very diverse mix of services. Legacy operations won’t be able to keep up. They need much more automation, especially for slicing. 5G also brings new performance demands, so the cloud needs to move towards the edge for the sake of low-latency, localized reliability, and traffic steering; for that, CSPs need cloud-native architectures efficiency.

Cloud-native migration is a journey. Like most journeys, the hardest part is often taking those first few steps.

To learn more about cloud native, how (and where) to start the migration to cloud native, join the Omdia webinar on easing the transition to cloud-native NFV for CSPs.