Analyst and consultancy firm Omdia recently conducted a number of surveys into broadband trends and opportunities. In this article, Ian Redpath – Practice Leader for Omdia’s components, transport and routing practice – explains how the guaranteed reliable bandwidth experience will enable new monetization opportunities for carriers.
In terms of key items impacting networks today, Redpath’s first trend to watch is that the digital economy continues to drive a massive cloud infrastructure road map, while his second key point is that the pandemic has accelerated and cemented the value of cloud service. Through the pandemic, Omdia has seen an unprecedented adoption of collaboration tools and also from an enterprise side, enterprises are seeing the value of digitizing and having a robust and distributed IT strategy.
Redpath’s final trend is connected to these first two, in that the new applications are being served by very high bandwidth and robust connectivity, and large enterprises are connecting key sites with high bandwidth private lines.
“At Omdia, we like to take the pulse of the carrier community. We conducted a recent IT seed survey and we reached out and heard back from 420 respondents. And the survey question was, How important are the following IT projects to your company?”
In particular, three IT projects scored very highly: using analytics to support network operations, intelligent end to end customer engagement solutions, and applying automation and machine learning to operations. The key takeaway is that intelligence and automation will play an ever more critical role in transforming carrier operations. The industry is adding more software intelligence to the power of optics.
“We can create a digital twin of the network within the management system, the foundation of control and automation. With accurate multi-layer inventory management system we know exactly what is in the network and its status. Intelligent automation can also be applied to both the optical core and the home broadband network; patterns can be tracked, predictions can be made, actions can be taken before costly network outages occur. And we can also identify building degradation issues before they become actual degradation issues. This allows more efficient planning of network expansions and resources.”
The bottom line there is that software control is really making optical networks more valuable, powerful and flexible.
Omdia recently conducted another survey on transforming private lines, and the key finding from the survey was that enterprises are re-evaluating their networks to meet the heightened performance expectations. Additionally, optical private lines are more in demand for secure network connectivity between critical sites. Bandwidth needs are increasing with stricter demands on network performance and availability. 63% of the enterprises surveyed expected to more than double their bandwidth within the next two years.
Enterprises have a wide and diverse range of bandwidth requirements, starting with 50 megabit and going all the way up to 100 gigabit. 50 megabit is typically used in access speeds, and the higher speeds are used more for aggregated connectivity and higher performance core connectivity. Redpath noted that Omdia is seeing 100 gigabit being utilized by some of the largest cloud providers.
90% of the organizations surveyed plan to replace their legacy TDM leased lines in the next two years. Enterprises are looking for high performance guaranteed bandwidth, high availability, and high security, so optical and Ethernet private lines are the obvious choices.
Continuing on with the key findings, across all the verticals the leading use cases for optical private lines include data centre interconnect, for connecting large sites and data centres and connecting to public clouds. The major applications are data replication for real time business continuity and disaster recovery, storage area networking, and big data and large file transfers.
Low latency applications requiring guaranteed bandwidth include financial trading networks, videoconferencing, e-learning and many others. Many enterprises that are not currently using optical private lines would consider deploying them in the future, with a couple of caveats. They would consider it more if there were smaller increments to choose from, so not just a wavelength but smaller increments there than a wavelength, and a wider choice of pricing than SLA options.
What this means for carriers is there is a greater opportunity to serve this market and leverage the value of the optical core to sell high guaranteed reliable bandwidth to the enterprise community.
In its survey, Omdia asked what the key driving factor is for purchasing private lines. Typical from the enterprise community were that they would like committed bandwidth, high availability, visibility – i.e. SLA performance visibility - low latency, bandwidth on demand and rapid provisioning.
The key takeaway out of all this is that enterprises want to move away from their historic best effort world and achieve a guaranteed, reliable bandwidth experience.
Omdia also asked enterprises about the business applications that they considered most critical for driving their decision to purchase a private WAN service. Responses focused on mission-critical items such as Office 365 and other SaaS applications, ERP business intelligence databases. This is good news for carriers – enterprises will value and pay for that high level of performance if carriers can deliver it.
A number of major verticals are already using optical private lines; financial services, manufacturing, the cloud community, energy, utilities, government, media, transportation and logistics and also health care. Therefore, the carrier community has a strong base to work off.
In terms of home broadband networks, the pandemic has changed their purpose – while they were typically geared towards consumer, we now have many people working at home and students learning from home, so the home broadband network has really elevated in terms of importance.
Omdia surveyed consumers over home broadband networks, and - as expected – high reliability and customer service were key demands. The pandemic has also emphasised the need for good Wi-Fi throughout the home, as more users are now staying in the house and using everywhere throughout, so thorough coverage is important. Speed and an easy setup were also key priorities.
There’s a big opportunity for carriers to step up the performance and the service, and then at the same time increased performance and better rate of service would justify a greater service fee, so there's a monetary opportunity for the carriers too.
The Covid-19 pandemic has increased the value and the importance of the home broadband network, with unprecedented usage, more home working, more online, more home entertainment, more social interaction with the video calling and the collaboration tools. That puts the pressure back into the government's court; everyone needs high quality broadband and governments do need to close the digital divide.
Additionally there has been an acceleration of remote applications and digital content. An example of this is health care; the pandemic has raised the need for more remote solutions for healthcare to be delivered remotely. Videoconferencing and VPN access are more important and all they translated into heightened expectations for quality of service and quality of experience, and that comes back to the connection in the equipment. Stepping up in terms of the CPE, the WiFi and the router and also stepping up in terms of the actual connectivity and prioritization and performance.
By enhancing automation capabilities, carriers are able to offer zero touch home networks. From the deployment perspective, the industry needs to speed up the time to turning up service and reducing manpower cost from a provisioning perspective. From a troubleshooting perspective, increased service agility and customer flexibility should lead to identifying and removing issues before they cause outages and reducing the support costs. From a service optimization point of view, increasing service and application quality of experience and reducing customer churn means that intelligent automation has a role to play for the home broadband network.
The guaranteed reliable experience has a role to play in the home broadband business as well. The typical issues that customers face with home WiFi include range, connection, speed and lag – and all of these have a customer satisfaction connection.
Many of the calls to complain are WiFi related, and it does cost the carriers to field these calls so there is an operational cost there. Often there's no real significant fault and it could be much more of an education view, but customers need to feel like they're taken care of, and they need to feel satisfied. They may not voice their concerns before they churn, so these are things that carriers do need to keep in mind - so guaranteed reliable experience plays a role in all of the customer lifecycle facets.
From a pre-sales perspective, the carriers want to identify customers that could potentially churn. They also want to be able to identify new revenue opportunities and opportunities to upsell. From an in-sales perspective and a deployment perspective, zero touch deployment and zero touch provisioning are desirable. For the post sales customer care, automated tools and techniques can be used to troubleshoot in advance of outages and help optimize and control both Capex and Opex costs.
From an overall market perspective, the market drivers are strong with both cloud service and enhanced broadband. The carriers will be empowered with a finer grain control of the optical network, and there will be increased investment and leveraging of automated network intelligence and automation.
OTN private line service continues to fill a premium experience role. OTN enables guaranteed bandwidth, bandwidth on demand, high availability and low latency, and a premium service experience can garner a premium revenue contribution from key customers.
The pandemic has really raised expectations for quality of experience for broadband. It's stepped up and elevated to a new level of performance. Automated networks can help in achieving zero touch networks. Finally enabling the broadband business: it will be enabled by the guaranteed reliable bandwidth experience.
