Telcos are undergoing digital transformation to cope with market challenges while developing new agile and versatile business models using SDN technology, and also shouldering the legacy of fixed term network infrastructure and workflow. This is never an easy task because the key challenge is not transformation of technology but the transformation of mindset, workflow and business model from a telco point of view.
The telecommunications industry stretches back more than a hundred years, from the telegraph and the telephone, to radio and television broadcasting, to modern digital forms of communication that allow people all over the world to connect via global networks. During the Internet era, data networks have become dominant over voice networks, and open source software and open hardware over vendor equipment. These ‘opennesses’ create opportunities for new businesses.
A good example is AWS’s cloud business. In the early days, Amazon designed and built the infrastructure of their e-commerce web services using open source code and common hardware. They made the e-commerce platform as bullet-proof as possible so that their site could run 24/7 without service being impacted even if a data center went down unexpectedly. They utilized cloud native software development and operational approaches, open source code, and even designed their own hardware to achieve optimized performance and industry-high availability without the risk of vendor dependency posing a threat to their core business. Since the company’s infrastructure was highly scalable and modular, Benjamin Black, Amazon’s website engineering manager, had an idea that he believed would benefit providers outside Amazon, adding value to the Amazon business. He proposed this idea to his boss and got the green light from Jeff Bezos. AWS, as it became known, was launched in 2006 and is now a multi-billion-dollar business with 30+% year-to-year growth.
But what does this have to do with the telco business, I hear you ask. In fact, the evolution of cloud technology impacts the whole IT industry. To put it simply, with its service activation/deactivation by software capability, cloud embodies the essence of ‘on demand’, ‘automation’ and ‘software-defined’, among other terms. These technological capabilities offer business opportunities for newcomers, which may in turn challenge traditional telco businesses.
For example, public cloud providers offer cross-region connections and services for easier and faster global deployment. Regional DC operators utilize the capabilities of SDN technology to create new businesses by offering cross-region connectivity within their DCs and public cloud. And Network as a Service providers offer DC/cloud connectivity using SDN between their PoP sites with aggressive pricing structures similar to Internet startups to capture market share fast.
Customers have more choice of network services these days. Telcos are undergoing digital transformation to cope with market challenges while developing new agile and versatile business models using SDN technology, and also shouldering the legacy of fixed term network infrastructure and workflow. This is never an easy task because the key challenge is not transformation of technology but the transformation of mindset, workflow and business model from a telco point of view.
So how can telcos stand out with a competitive edge? Many telco operators have the advantage of domestic last mile connectivity provisioning, domestic knowhow on operating telecom licenses, a carrier neutral DC footprint, a system integration service arm, and good customer service for a large volume of domestic customers. These core components are the values customers require to avoid vendor lock-in and also provide great support for OTT players when it comes to business expansion.
In the past, telco was a self-contained business within each country. As the Internet continues to grow with service globalization, telecom operators need to open up to more partner cooperation by leveraging their footprint and services in ways that expand global coverage and sales channels in tandem. The SDN platform provides an overlay on traditional networks for fast network integration, providing an agile business offering and high transparency on data usage and billing to establish trusted business partnerships. HGC is a global network provider with a strong ASEAN focus. We leverage our SDN platform to create business synergies with our partners, leveraging capability, salesforce and resources to complement and support our customer growth. United, we will continue to thrive.
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