Business Community Insights The Internet

Winners and Losers in Next-Generation Internet Infrastructure

Courtesy of Ciena

Infrastructure investment is a major theme in conversations around strengthening the economy. While physical infrastructure, like roads and bridges, is all very important, global communications networks are also critical infrastructure that demand investment.

For years, our digital networks have experienced unrelenting traffic growth. As a result, the world has deployed large amounts of network capacity. None of this will change any time soon—end-users over the next decade will increasingly require on-demand communication services underpinned by a truly intelligent internet. This insatiable demand might suggest there’s room for everybody to win as the next generation of network infrastructure is laid out, but that’s far from the case.

So how do we identify the differences between this next phase of building and the boom we saw in the last 10 to 15 years?  And what industries might offer pertinent parallels?

The End of the Truck Roll Era

Not long ago, maintaining and upgrading digital networks looked an awful lot like improving physical infrastructure. Crews were rolled out in truck convoys, roadways were dug up, fiber was pulled, and concrete was poured. Though this is still how something like a bridge repair is handled, communications networks now benefit from new technology that completely changes the equation.

The big difference? Software. Even recently, more bandwidth between continents would have meant a ship spooling cable under the sea—a very resource- and time-intensive endeavor. Now in many cases, all that is needed is some new software code to exponentially increase capacity where the cable meets the shore.

This shift might be best compared to today’s corporate information technology, where upgrades are almost exclusively performed via software—quickly and often undetected by the end user. In networking, this same shift is underway, in part driven by new entrants to the space. Web scale companies like Google and Amazon, which are both customers and increasingly competitors to the traditional telecom companies, approach network builds for their major cloud and data center services much the same way as they did when building out their own internal IT operations, which are software-intensive.

And as the IT world’s increasingly significant influence on networks permeates the industry, some of the world’s largest telecom players are merging their own network and IT functions into unified teams. This kind of convergence means that the network is increasingly becoming less about fiber-optic cable and more about software managing the network.

We’re living in a world where everyone is innovating faster. Business models are being reimagined. And it’s the software that is making it possible for all players to get more capacity and speed from existing fiber and infrastructure. The new tools are things like network programmability and virtualization—long words that come from digital, not physical, upgrades.

On the Cusp of a New Set of Winners and Losers

This is a fascinating transition for a company like Ciena, a network-technology company that works with telecoms and web scale companies alike. Our customers are being forced to change how they compete, which is no doubt prompting yet another industry shakeout. Winning as a network operator in the old telecom environment largely depended on an ability to protect the walled gardens of hardware built by network-technology suppliers. Winning in the new environment will depend on a supplier’s ability to deliver what the IT world has enjoyed for years: openness, codevelopment, and agility in how technologies are consumed. To win you need advanced software capabilities that extract more value from the hardware.

Companies are tackling this shift to IT-centric networks in different ways depending on their business strategies. For those embarking on this journey, the key to success is to identify how the organization wants to collaborate, innovate, and consume network technologies in this new environment. Openness and agility are more critical than ever before. That can be hard for some companies to understand and accept.

A few examples of how software is enabling networking to follow the path of IT include:

  • The introduction of DevOps style capabilities that make it possible for network operators to add network resources and program new services at cloud speed. They can do this thanks to these new, intelligent software capabilities that make it easy to create, test, and modify services.
  • Technology platforms that allow network builders to leverage the open APIs and server-like management that IT buyers want.
  • Cloud-based software development environments designed to help users create customized applications.
  • Platforms that support full integration with third-party components, eliminating vendor lock-in, automation, and analytics, for a truly self-driving network build.

Building the Internet of Tomorrow

These developments underscore the investment advantage of networks versus traditional physical infrastructure. The telecom industry’s ability to unite software and hardware strengths to build networks that meet new demands for flexibility is remarkable. Waze—on a truly grand scale—for data, if you will. Waze has significantly changed the way we navigate along the roadways and helped get us from point A to B in the most efficient manner, avoiding traffic issues and delays. With intelligent software, we can do the same for transporting bits across the network.

These first steps are separating the old guard from the new one, prompting consolidation and shakeout across the industry. For big businesses and the telecoms and web scale companies they work with, there’s more opportunity than ever to influence how network-technology companies operate as this next shift in networking gets underway in earnest. And the good news for end users of the network is that it will work better for everyone as this revolution proceeds.

Gary Smith is Chief Executive Officer of Ciena.

 

Tags: , ,