Next-Gen Telecommunications Trends

Alex Vaxmonsky

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In our blog entry, PTC 2016 – Reimagining Telecommunications, Ryan Mallory discussed some of the trends highlighted at PTC 2016 for enterprises. Today, we’ll look at how these trends translate into challenges and opportunities for service providers.

For most carriers, network service providers (NSPs) and cloud service providers (CSPs), the billion-dollar question is: How do you compete and profit in a world of next-gen telecom? With accelerating trends such as cloud, mobile apps, GPS, social networks, wearables technologies, artificial intelligence heuristics and Internet of Things (IoT), service providers are seeking strategies that move beyond connectivity and allow them to build businesses around emerging technologies.

Subsea cabling is one of the sectors going through big changes. A lot has happened since the first transatlantic communications cable was laid between cable landing stations in New York and London. However, in 2016, there will be more undersea fiber optic cable added than in the last five years combined, with connectivity increasingly moving from landing stations to global cloud and colocation data centers. Subsea cables will more frequently connect regions such as the Pacific Rim, Middle East, Africa and South America, as well as locations within these regions. Equinix‘s participation in the Southern Cross Cable Network linking Australia and North America is a perfect example of these trends.

Major cloud service providers, such as Microsoft and Google, are investing in this sector as part of larger consortiums. In many cases, undersea cables are even operated by data center or cloud service providers looking for new ways to shave latency and enhance application performance.

The big question on service providers’ minds is how to make money from the Internet of Things. For many, the answer lies in developing a strategy to transition from a fixed telecom environment to one that is more on-demand, with both technology and commercial terms that are more dynamic and elastic than ever before.

Service chaining is an up-and-coming solution, with providers looking to offer a set of network services such as firewalls, application delivery controllers and intrusion prevention around applications, all interconnected through a software-defined network (SDN). SDN makes service chaining and provisioning much more dynamic, fast and simple than it used to be in a more fixed world. APIs are key enablers, with inputs into services such as the Equinix Cloud Exchange.

Security is perhaps the number one concern as these new technologies and architectures hit the market. Government agencies were hard hit by high-profile breaches last year, especially the U.S. Office of Personnel Management, while the healthcare and retail industries were damaged by intrusions the year before. No doubt, security will be a major focus for anyone delivering a service across the Internet for the next several years. Many Equinix NSPs and CSPs are leveraging direct, private connections that bypass the public Internet for greater security.

Enterprises have moved firmly from investigating the cloud to using it. Both they and their CSPs are finding that colocation data centers represent the most flexible, high-performance, low-latency paths to the cloud due to the cloud density and proximity to multiple cloud partners. According to Dimensional Research, more than 45% of new cloud applications will be at a third-party colocation provider.

Colocation centers can provide all players with an entire digital supply chain, including NSPs, CSPs, industry-specific vendors and enterprises – all interconnected under one roof. Service providers have caught on to the benefits of making their home in colocations already, and enterprises are following suit as they get more savvy and experienced with cloud implementation strategies and recognize all the performance, agility and quick ramp-up advantages of these solutions.

All in all, it’s a fast-changing world for all parties working in the telecommunications industry, and there’s no doubt these trends will only accelerate in the years to come.

Alex Vaxmonsky
Alex Vaxmonsky Director, business development for global service providers