ITW 2015: Trending Network Service Provider Challenges
ITW 2015 opened its doors to over 6,000 attendees from 150 countries to exchange views, forge relationships, share aspirations, close deals, and compare telecom retail and wholesale strategies. This year’s theme was “cybersecurity,” but another macro conversation, the growth of the global digital economy fueled by cloud, was clearly pronounced throughout the formal meetings and informal conversations. Network service providers (NSPs) are moving beyond traditional revenue streams and developing a more comprehensive portfolio of services for the digital economy.
Trends and Observations
THE BIG ONE: Enterprise defection rates from multi-protocol label switching (MPLS) are increasing. Large multinationals are leading the trend by rethinking their global and/or regional MPLS vendors, or choosing a hybrid WAN model – leasing optical waves or lit services where economics are right, while renting MPLS where necessary. Typically, when large enterprises defect, they stand up their own Layer 2/3 devices, servers, security stacks and other parts of the infrastructure with modern colocation providers, such as Equinix, in multiple geo-locations.
THE TAIL WAGS THE DOG: NSPs can no longer afford to turn a blind eye to the cloud. Born inside hybrid or private clouds, new enterprise applications are forcing even big carriers to swiftly adapt. This means re-engineering their networks to keep quality of experience and loyalty indices high and OPEX investments low. To stay competitive, profitable and relevant, NSPs must reinvent themselves to project a new image and partnership with their customers. They need to become more elastic, latency-obsessed, cloud-cognizant, application-aware and equipped with high-velocity provisioning services.
NEW-AGE SALVATION: With a noticeably faster implementation rate, SDN and NFV in carrier networks are answering many NSP aggregation challenges. I call this trend the “application centricity movement,” a concept of laying down intelligent interconnections, rather than rigid, more expensive MPLS links. It all marks an exciting period for the industry, where NSPs are tasked with using SDN and NVF to re-purpose traditional networks into a more secure, reliable and application-aware interconnection solutions.
THE BYOMD CONUNDRUM: BYOMD (Bring Your Own Multiple Devices) has NSPs running amok with bandwidth investments, making capacity planning a nightmare. Capacity planning becomes a three-month gamble, exacerbated by the unpredictable flows and sporadically changing geographies of mobile workloads in and out of cloud domains. The cloud driven pay-for-consumption model introduces a new level of the bandwidth-on-demand panacea, with more granular and complex “just in time” service delivery schemas based on the per-minute billing for virtualized compute virtual machines or per-gigabyte object/block storage consumption of cloud resources.
CLOUD PROPELS MODERN COLOCATION: Today, the cloud is propelling the “Third Wave” colocation era. Unlike in the previous annals of colocation history, the Third Wave embraces multi-dimensional customer interconnection requirements on top of the retail space and power baseline. In the last few years, customers have been demanding superior security, low latency, and colocation cloud density – all guaranteeing predictive and superior application performance.
ITW Take Aways
NSPs are good partners for enterprises and Equinix, and they have proven to be unique enablers of new models of cooperation in the cloud age. In addition, global enterprises and NSPs investments are trending toward the best, most dense and unique network and cloud ecosystems and globally distributed colocation platforms. We will continue to lead the way by expanding the number of premier cloud-enablement business partners globally, such as Nimbo, Unitas, Datapipe and the newest member of this exclusive club – Global Capacity.
In this rather challenging and often perplexing cloud paradigm we live in, teaming up with NSP aggregators within Equinix makes not only common sense for enterprises, but also presents a winning blueprint for attaining sustainable levels of revenues on both sides.