Telcos are not innovative, Openstack changes that – Red Hat

The 00’s were seemingly a slowly declining slide for the telcos, who slowly witnessed the more agile and innovative internet players erode profits.

Jamie Davies

November 8, 2016

3 Min Read
Telcos are not innovative, Openstack changes that – Red Hat

The 00’s were seemingly a slowly declining slide for the telcos, who slowly witnessed the more agile and innovative internet players erode profits.

For Darrell Jordan-Smith, Red Hat’s VP of Worldwide Sales, Openstack offers the telcos an opportunity to be innovative, and above-all-else, level the playing field against the new wave of internet companies who are causing the major disruptions.

“A lot of the telcos are looking at deploying opensource technologies to try and leverage the promise of innovation and the speed in which innovation be delivered,” said Jordan-Smith. “The telecommunications companies themselves don’t tend to be very innovative. They don’t have huge R&D budgets so require the ability to access developers in the software-defined world. Openstack gives them access to that.”

The telcos have been looking across the table at the internet companies and have been turning a bit envious in recent years. The internet businesses, which are efficiently stealing profits from the telcos, have a very scalable, robust infrastructure in place.

The ability for the internet businesses to dominant in the digital era is mainly due to the ability to bring new services to market faster, and then evolve those services in-line with customers’ expectations. Having access to suitable infrastructure is paramount to these demands.

“Now the telcos are seeing the agility that a lot of the FANG (Facebook, Amazon, Netflix and Google) companies bring to the table and they are aspiring to achieve the same,” said Jordan-Smith.

“This is where Openstack comes in. It enables the telcos to use opensource technologies, build infrastructure around clouds, and move away from proprietary appliance driven infrastructure, towards a software-defined infrastructure. They use opensource to achieve that because they can tap into that community of innovation which sits out there in the market place.”

The internet players have had the opportunity to build these opensource environments from the ground-up. Facebook, for example, began operating in 2004, it doesn’t have the same legacy issues to think about like BT or Orange. The telcos can’t afford to write off the legacy, which is where the importance of Openstack can be felt. Access to thousands of engineers around the world who can help the telcos create genuinely open and innovative propositions. It’s the footing the telcos need to be competitive with the FANG players.

“So what we’re seeing is a lot of the legacy infrastructure in a telco environment isn’t going to get thrown away,” said Jordan-Smith. “One of the biggest areas of interest for Red Hat customers is how to build new services using existing based infrastructures. Another area is automation. If you look at the telcos, they want to save some money, make some money and do it faster.”

Ansible is one company which enables this. The company was acquired by Red Hat during the latter stages of 2015, and enabled the team to better serve the telcos who want to offer new services without expensively upgrading infrastructures right away. It’s by no-means a perfect situation, but does offer a reasonable middle-ground to remain competitive.

But what next for Openstack?

“We’re going from a proof of concept age to a more of an industrialization age,” said Jordan-Smith. “We’re actually seeing real production based Openstack solutions which are being deployed in networks allowing you and I to build services using it. That is beginning to happen now.

“What we will also see is the emergence of containerized technology and better ways of orchestrating Openstack in a container, orchestrated by Kubernetes (for example). The next evolution beyond that is how do you take some of those virtualized applications, which are very large applications, and decompose those into the form of microservices.

“This will give better performance and better scale. I think there will be a lot of innovation over the next three to five-year window.”

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