Digital transformation offers enterprises in all industry sectors the prospect of reduced costs, greater operational efficiencies, enhanced customer experiences and – underpinning it all – growing profitability. What’s not to like? Well, it’s harder to do than to say. So, ahead of Digital Transformation World (DTW) in Copenhagen, Denmark (20-22 September, 2022), Jeremy Cowan talks to Nik Willetts, CEO of the event organisers, TM Forum, to find out their expectations for the conference and exhibition.
Jeremy Cowan: The global economic and business outlooks have changed drastically over the last two years. How are TMF members adapting their business and technology platforms to such rapidly evolving markets?
Nik Willetts: Service provider growth strategies have sharpened significantly in the last two years, with a clear focus on business-to-business (B2B) – direct to enterprise and ecosystem plays, or B2B2x – in most markets. We categorise the opportunities for growth into three layers.
Firstly, next-generation connectivity: transforming connectivity to meet the evolving needs of enterprise customers, and in doing so keeping a sizeable cash-cow of the telecoms industry alive. Disruptive market forces are ripe for a shake-up of B2B connectivity, equivalent to the shift from traditional to cloud compute over the last 15 years. For connectivity, this means moving from selling technologies (fibre, 4G/5G, etc.) through traditional channels, to selling connectivity solutions, or Connectivity-as-a-Service (CaaS), via multiple platforms. Being able to move fast enough and stay profitable in this market will require a new paradigm of operating efficiency and agility, with no room for legacy software, processes, or ways of working.
Secondly, a set of horizontal growth opportunities are now gathering pace, such as end-to-end security, Internet of Things (IoT) device management, and existing communications service provider (CSP) capabilities and data. While they represent a tiny fraction of CSP revenues today, they are already offsetting declines in traditional connectivity revenues, and will only grow. These services sit at the intersection of connectivity and other digital infrastructure such as central and edge compute and specialist PaaS/ SaaS, such as artificial intelligence (AI). To seize this opportunity requires compatible capabilities to the above, but also a stronger focus on the ability to rapidly partner and leverage third-party platforms and ecosystems.
Finally, the exciting opportunities behind many 5G use cases still exist: to deliver tailored end-to-end vertical solutions. But here, CSPs are becoming more selective over which verticals to focus on, and realistic over what it takes to succeed. A carefully curated ecosystem of partners is proving essential to seizing these opportunities – in particular, partners with specialist knowledge and solutions experience, paired with the right foundations in terms of operating agility and platforms.
The speed and scale of this change can be disorientating, but when it comes to putting in place the software and capabilities required to seize these opportunities, the priorities are velocity, scalability, and openness. Velocity to react to new customer needs quickly and cost-effectively; scalability to ensure solutions can scale profitably, including being reusable in a variety of use cases; and openness to enable rapid partnering – directly or indirectly.
It’s these needs that are driving hundreds of companies to work together to co-create the Open Digital Architecture (ODA) and Open APIs in TM Forum. ODA builds on best-practices for cloud-native software by defining reusable building blocks to enable the velocity and flexibility required for growth, combined with scalability and openness to enable the business to experiment and flex to ever-changing customer needs. Open APIs enable openness and simplify aggregation and integration with partners. What started with a focus on revolutionising traditional Operations and Business Support Systems (OSS/ BSS) is now rapidly expanding to meet the needs of Cloud Native Networks for new connectivity products.
JC: What are the next steps on the road to autonomous networks?
NW: TM Forum members have identified three key concepts that an autonomous network must support:
- Intent-based instructions (the ability for a requirement or instruction to be passed from one domain to the next based on the outcome that the requesting domain desires, the intent, without the requesting domain having to understand the technical details or technology of the responding domain)
- closed loop controls (the ability for a control loop to monitor several domains and control which domain is responsible for delivering the service or attempting to deliver the service based on the service level agreement (SLA) or outcome that the control loop is working to. Control loops are used to enable autonomous systems to adapt their behaviour to respond to changes in user needs, business goals, or environmental conditions), and
- self-healing domains (the ability for a domain to monitor itself, and based on learned patterns (AI/ML) respond to degrading service output by reconfiguring itself to maintain the required service levels)
These concepts need to be built into the management and operations of tomorrow’s networks at all stages of the lifecycle, from the network design, plan and build and throughout the in-life operations. While most CSPs have now started the journey to autonomous networks, the road to fully autonomous networks will be a long one.
Market-leading CSPs are now implementing automation across their technology estate (both networks and IT) with the goal of reaching conditional automation (level three) by 2025. This will require the whole supply-chain to work together to enable automatic decision making, where AI models can be dynamically updated. It’s an important next step for CSPs, allowing them to have some automatic decision making within pre-defined policies or rules. It’s also an important stepping stone to end-to-end automation, allowing operators to learn what automation will mean for their networks in practice, and building the confidence and competence required for full automation.
The next major milestone will be intent-based networks. This is a real game changer for the industry, opening up a range of new business models and services, as it will enable CSPs to be more agile, deploying services at the speed and cost point the market requires. In short, intent enables you to tell a system what you want, without having to tell it how to do it. We’ll be demonstrating this in action at our DTW 2022 conference (Copenhagen, September 20-22) with an impressive intent-driven autonomous networks proof of concept catalyst.
JC: Can you describe TM Forum’s model for autonomous network uses (levels 0–5)? How does it assess a network’s maturity?
NW: Automation can be applied to four broad classes of functions: information acquisition, information analysis, decision and action selection, action implementation. Within each of these types, automation can be applied across a continuum of levels from low to high, i.e., from fully manual to fully automatic. A particular system can involve automation of all four types at different levels. Based on these frameworks for automation, the autonomous network level methodology has been co-created by TM Forum members, shown in the Table above.
Clearly defined autonomous network levels have the following benefits:
- Providing guidance to operators, vendors and other participants of the telecommunications industry for roadmap planning.
- Providing reference for gap and priority analysis for future work on network autonomy.
- Providing a basis for measuring the level of an autonomous network, or autonomous network feature, along with its components and workflows.
- Providing detailed process-oriented approach and effect-oriented metrics to achieve quantised evaluation.
Several major service providers are now using this framework to assess and plan their autonomous networks journey, from current maturity to longer-range objectives, and then creating a clear plan for delivery. We’re looking forward to showcasing several of these companies at DTW in Copenhagen.
JC: One of the key questions facing CSPs is how to find and retain the necessary skills to create autonomous networks. What does Best Practice here involve?
NW: Every industry is facing a skills crunch, and more broadly competing in an increasingly fierce war for talent. While these challenges span 3Rs – Recruitment, Reskilling and Retention – we believe the industry needs to focus on upskilling first and foremost, to successfully deploy and manage autonomous networks. This applies across an organisation, starting with the executive board who need to understand the value, risks and challenges of automation, and the vital role that autonomous networks will play in maintaining current revenues and unlocking growth. Equally, DevOps teams need to be upskilled and understand the impact of AI on technology architecture, as well as understanding how to deploy and scale AI safely and securely. Of course, AI and automation have a huge dependency on the data teams, exposing the right data or feature sets to train, build and design the AI models, and maintaining transparency and regulatory compliance. Demonstrating effective control and governance of AI will be critical to success, and this means the whole organisation needs to be upskilled to know how to work with AI.
JC: AI, cloud and edge need to be blended well to deliver fully automated, self-healing and self-optimising capabilities. Can you give us examples of organisations doing this well?
NW: The intersection of cloud, connectivity and AI, and end-to-end management will be an exciting battleground in the next few years, both to stay relevant and unlock new revenues. There are many initiatives in this space, from multi-CSP partnerships such as Bridge Alliance’s Federated Edge Hub, through to hyperscaler-led programs such as Microsoft with their Azure for Operators platform which is specifically designed to bring cloud and edge together. We are hosting several exciting projects with companies co-creating the answers to the challenges involved, with a focus on maintaining openness to maximise market freedom and innovation.
JC: Some CSPs are pinning their plans for growth on delivering new services for financial markets. How significant will digital banking and mobile wallets be for Service Provider revenues in the next two years? And how should they build partner ecosystems to create a one-stop fintech solution?
NW: Mobile payments and mobile financial services more broadly are already an important market for many telecoms operators. For example, all four of the large African telecoms groups – Vodafone, Orange, Airtel and MTN generate 2-4% of their total revenues from financial services.
For these operators, the next wave business-to-consumer (B2C) service growth requires evolving these capabilities into true platform businesses, enabling innovation and growth across the financial services sector. Operators who make it easy, through their technology platforms, to be a foundation for innovation will stand the best chance of success. Deploying Open APIs – and demonstrating the availability of Open APIs to partners and innovators in other sectors – will be crucial. But it’s also about designing IT systems in their own businesses that are designed as much for ecosystems partners – and meeting their requirements – as for CSPs’ own customers.
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