July 16, 2017 Leave a Comment
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SP360: Service Provider

Service Providers Risk Being Displaced If They Fail to Adapt

With the industry undergoing transformation, service providers (SPs) now have an opportunity to apply the latest innovation – from machine learning to artificial intelligence to advanced analytics — to the way they operate and define the network.

Lessons from history has shown that to succeed in any transition, they must adapt and rethink everything they do, and to do it quickly. But to do so, SPs must overcome some real complexity and fundamental challenges.

State of the Market

Our latest Cisco VNI IP traffic index, announced earlier this month, shows that the digital landscape is quickly maturing, with Asia Pacific IP traffic surging more than three-fold to 107.7 EB (exabytes)/month from 2016 to 2021.

By 2021, Asia Pacific will generate 39 per cent of global IP traffic, the highest share of any region, with non-PC devices driving 77 per cent of traffic. An average APAC user will consume 39 GB of data each month, about 2.5 times more when compared to 16 Gb in 2016.Global Internet traffic at the same time will be equivalent to 127 times the volume of the entire global Internet in 2005. This is a staggering development.

This surge in global and APAC IP traffic will lead to tremendous growth in M2M services, cloud, mobility and IoT adoption in the next few years. By 2021, APAC devices and connections will account for almost half (47%) of global M2M connections. Nearly half of this devices will also be video capable.

SPs Play a Key Role

SPs will play a key role in the transition and into the future. Enterprises do not have the structure and bandwidth for the increase in OPEX and will rely on their SPs to meet their business requirements.

On their part, SPs must move from a highly manual, time-intensive, often static approach to one that works with the future in mind.

Traditional approaches to network management will not be able to solve increasing network complexity. The future will see SPs driving more value through programmability and automation, which is integral to the success of next generation networks. Programmability will enable SPs to change automated processes and configure networks without manual control, freeing resources for high-value innovation. Automation also helps SPs to scale, improve the customer experience and prevent mistakes in network management.

At the core of the new era is also intent-based networking. This future will be based on business outcomes and the increasing speed at which they can build a network that can enable to move faster and be smarter.

The new network needs to be a fully integrated, single system that is both intelligent and highly secure. It will constantly learn and evolve to detect issues before they happen, and provide actionable insights to resolve them on its own.

For many years, Cisco has been helping our SP customers innovate and preparing the networking industry for the transformation to digital-ready networks.

How can SPs pivot to the innovation around them, and build a network that is adaptable, intuitive and continually learning?

Some of the key considerations include:

  • SP networks need to adapt to the increasing number of devices that will need to be authenticated to gain access to fixed/mobile. A comprehensive IPv6 strategy is required by SPs to accommodate the new growth.
  • Advanced video services and M2M applications will create new bandwidth and scalability requirements for SPs. To be profitable, SPs must continually improvement on quality, convenience and price.
  • Increasing business video adoption will lead to greater growth in network virtualization as more businesses leverage the Internet for video transmission
  • With more and global IP traffic coming from cellular and Wi-Fi connections, differentiated and monetizable mobile strategies will be important for all SPs.
  • With significant IoE adoption across many business verticals as well as connected home growth, new methods of billing may be required. This could mean a flat fee monthly billing for IoE services.

I believe that in this digital transition, the network will be an enabler and an accelerator of a whole new set of technologies and customer experiences.

For SPs to stay relevant, the need to innovate and embrace change is no longer a choice, but a business imperative.

For more information on the forecast and trends in APJ please visit our resource hub page to give you specific insights.