Hey, Mobile Operators: You Need to Move Faster and Be More Nimble!

Peter Christy.

Peter Christy, a former 451 analyst, analyzes the value of agility and suggests that mobile operators could benefit by moving fast like cloud operators do.

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Most of today’s “edge” discussion are aspirational, and are often presented in the context of 5G—the future world of wonderful things to come. While many of the most exciting edge applications are a ways off in the future, this kind of thinking misses two critical points: (1) the edge can deliver important commercial benefits now on today’s 4G LTE infrastructure without having to wait for 5G; and (2) for mobile operators the race to the edge is more than just edge—it’s actually the future of the cloud. The cloud is going to consume the edge, and if the operators don’t act quickly they are going to lose their opportunity.

The cloud moves uncomfortably fast, and it won’t wait for the full 5G. The mobile operators need to embrace the edge now. Those that don’t will risk missing out on the next generation of cloud and the internet.

Telcos Meet the Cloud at the Edge

Over the last 10 years, as an industry analyst and consultant, I’ve watched the emerging public cloud change nearly everything in IT, with profound and often painful implications for the incumbent vendors. Many of these legacy vendors believed their position in the commercial IT ecology was pretty secure, until it wasn’t. It’s now time for mobile operators to face similar forces of change: the success of the 4G/LTE buildout has made the global mobile infrastructure a key part of modern IT, which certainly wasn’t the case ten years ago. Today’s cellular wireless systems are now a part of the cloud, like it or not.

The cloud and mobile infrastructure meet, not surprisingly, at the “edge”. Is the edge just the cloud deployed in a more distributed form, or is the edge an important new part of the mobile infrastructure? Are mobile operators at risk of cloud disruption like the IT incumbents before them?

The cloud evolves at a very different and frightening pace compared to traditional telecom—Amazon Web Services is a highly-profitable, $30 billion run-rate business, growing at 45% year over year. While those numbers are still small by the standards of the global mobile industry, that will quickly change with exponential growth. If mobile operators wait another three years to figure out how they become part of the cloud, AWS might be a $100 billion per year company; does that sound more worrisome?

Having worked in the area of cloud, telecommunications and IT for a while, I think it’s best to treat the mobile edge (or cloud, whatever you choose to call it) as new and different territory, with a land grab going on, with very aggressive real estate developers sniffing around.

Assume for the moment that the edge is the beginning of a much larger melding of cloud and mobile. If this is true—and I posit it is—the stakes are existentially high. If the telcos wait until it’s obvious how this is going to sort out, they’ll be much too late to be one of the winners. So, my advice to operators is to get engaged now, because of the likely strategic impact, because of the emerging businesses enabled by the edge, and because of how the edge can benefit their businesses now.

Perspective

While a lot of edge discussion to date has been aspirational in nature—great things to come, at some point in the future—the edge can also make a telco’s  business better now. To explain what I mean, I’m going to focus on two potential benefits of the mobile edge—business agility and edge bandwidth—both of which you may not have heard much about before.  Neither depends on 5G. Both can make the business better now. I’m going to talk about the first—business agility—in this blog, and the second—the value of edge bandwidth—in a subsequent post.

For an analyst or watcher, the mobile edge is fascinating because it’s the forced marriage of the global cellular infrastructure with the the cCloud and the Internet. Talk about different cultures. One of the biggest differences is in speed and cadence. Mobile operators move with the ponderous grace of the national telephony monopolies they used to be, with technology generations carefully designed and standardized and then rolled out at global scale over many years.

The cloud moves at, well, cloud speed, something frighteningly fast for everyone else. So when cloud meets mobile it’s like a basketball game between a team that likes to run and one that doesn’t. Whichever team defines the pace of the game has a clear advantage. In the cloud versus mobile game there is a lot at stake—the transformation of IT and communications as we have known it, just to start; and if it’s like the previous generation of IT that was displaced by cloud, there may not be a lot of assured franchises.  I don’t see the cloud slowing down, so logically it suggests that mobile operators need to speed up, and make decisions and execute new initiatives faster than they are used to, or they won’t like the consequences.

Agility (“able to move quickly and easily”)

One of the relatively undiscussed values in a Telco edge cloud is the impact that can have on Telco system and application agility (speed of development) and, in turn, on Telco business agility. The missing point is that an edge cloud can be used for internal application development as well as offered to others for rent.

The internet and the cloud have redefined business, commerce, and governance by enabling businesses that reach global markets, and enabling new forms of business structures including innovative supply and delivery chains. In the past, new business structures were grown organically by existing companies, necessarily a slow and deliberate process. Going forward new structures can be built by the network interconnection and collaboration of existing businesses, which can happen at, well, cloud speed. So incumbent businesses can’t rest on their laurels because things can change quickly and dramatically, taxis and Uber are just one example.

Business agility is also improving because of how the cloud has changed application and system development. Development cycles no longer take 18-month, followed by customer testing and then customer deployment, months or even years later. Instead, there is continuous software development and deployment with development cycles of weeks or months at the most. Many IT projects are now built using “scrum” development with short development sprints and system goals that adapt to what is learned and how the market evolves. Software development is now moving at cloud speed.

Why is IT agility such an important factor in business agility? Because, as time goes on, it is increasingly true that a company (or government for that matter) is its IT system. Looked at a different way: a modern company can’t do what its IT system can’t support. Mobile operators don’t run very agile businesses, certainly by cloud standards. Now that cloud and mobile are integrating, can that continue to be true? Edge platforms enable mobile operators to compete with OTT solutions but the competition will probably occur at the cloud pace so the agility offered by an edge platform is an essential part of the solution.

The “How” of IT Agility

Cloud IT development agility results, in part, from the different systems structures used in the cloud, as well as from a whole new development process and methodology. To explain that we have to get software geeky for a moment — sorry.

Application development speedup is enabled by “single image” software systems.  Big websites may have many servers (Google Search has millions) but they run a single version of software, and to the degree possible, all the servers are all exactly the same. When a feature is added, it’s added at the same time on all the servers; when a bug is fixed, it’s fixed everywhere. If the modified software runs on one server, it’s not going to break when run on a differently configured server. There is a single version of the software running as many instances, each on uniform infrastructure.

Modern web and cloud development agility couldn’t be more different from the legacy IT model where each business was encouraged (by self serving vendors and integrators) to have a unique hardware and software infrastructure — a different system, by design, even to do the same thing. For an application vendor wanting to sell into this market,  there were an uncountable number of subtle and not so subtle differences in the platforms that their customers used to run the application. If that wasn’t bad enough, each customer and prospect had an independent strategy and schedule for installing patches and new versions of the myriad software components and subsystems they ran. So customer platforms were all bespoke, unique components, each upgraded on a unique schedule — all different in the details that count when it comes to integration and bugs. Compared to a single instance web system, the legacy ecology is quite literally a support and development nightmare. The complexity meant a lot of effort had to be spent making applications run everywhere and keeping them running everywhere, effort that can’t be devoted to advancing the application, which in the end is what customers really want and need, and will pay for.

Automation

The other secret to agility is automation. The creators of very large web systems realized early on that they had to remove human dependencies as much as possible—any operational process that had manual steps wouldn’t scale to tens or hundreds of thousands of servers. While enterprise IT is just now adopting “DevOps”—better tools for the operational teams—he large web and cloud providers talk about what is practically “NoOps,” which in practice is quite different—an explicit goal of eliminating human administrators to the maximum degree possible. For every problem that is found and fixed (necessarily a human activity), the site automation is enhanced or repaired so that the problem never occurs again or, if it does, it is solved automatically with no human remediation. Problems in complex systems are unavoidable; repeat problems, however, are unacceptable.

Agility Delivers Business Value

Agility wins in any competitive arena, all other things being equal, including online services and applications (SaaS). How can a competitor survive for long if the market leader is intrinsically faster at developing new capabilities and features, and is always ahead of you? Many legacy application vendors have learned this painful lesson when faced by a a new web competitor. The legacy provider doesn’t go out of business immediately, as they have customers dependent on the systems they’ve purchased. Instead these providers face a long and painful erosion of the business unless they can become as agile as the newcomers, before it’s too late.

Many enterprise IT groups have also learned a painful agility lesson.  As business transformation (specifically “digital” transformation) became a common CxO strategy pillar, it created a supporting requirement of IT agility. How can a business be agile—respond to changing conditions quickly and effectively—if the IT system isn’t flexible enough to support applications that change at the same pace? More agile IT has become a CEO demand rather than a hope.  Most IT groups understandably resisted moving applications, and tried to create equally agile internal development platforms. Most failed, and when they did applications moved to the cloud anyway, over the dead bodies.

Mobile Operators and Agility

Let’s get back to the topic at hand—why mobile operators should engage with the cloud and build an edge cloud now rather than waiting. The point is that an edge cloud can be used as an internal development platform to greatly improve the agility with which a mobile operator can respond to market opportunities and challenges.

It’s completely understandable why many mobile operators probably think their franchise is secure; after all, they are descended from earlier incarnations as unassailable national telephone monopolies.  When the telephone was introduced commercially toward the end of the 19th Century, it changed life for people then, as much as the Internet has changed people’s lives more recently. The same can be said for the mobile phone, and the introduction of texting, roughly a century later. So it’s entirely understandable that mobile operators tend to see phones and services right in the middle of the modern world.

Mobile operators never intended to give up their technology and cultural  leadership role, and they hatched great plans for adding media and other services to the mobile phone experience. However, most of those plans never reached fruition, in part because of the laborious processes and lengthy development cycles of the cellular ecology: it’s hard to plan innovation so far ahead and get it right, especially if there are other games in town. And there has been a major other game in town ever since AT&T permitted the App Store and brought forth the world of independent mobile applications.  Innovations in open market smartphone applications didn’t require advanced planning with meticulous syncing to new infrastructure technology generations; they just happened if and when they made sense, and took off like wildfire if they did.

An agile development platform located at the cellular edge and integrated with the global cellular infrastructure gives the mobile operator a new way of competing with over-the-top, phone/cloud applications, that is far more agile than introducing features through the evolution of mobile infrastructure. Consider, for example, virtual and augmented reality headsets. VR has been around for nearly 30 years, and high volume consumer products just around the corner, but certainly never predictable or schedulable years in advance.  VR and AR are ideal edge applications because of the impact of latency and bandwidth. With edge agility, mobile operators don’t have to plan this all years in advance and get it integrated into global standards; they can finally just respond to market developments as they come.

Agility lets mobile operators get back into the game and again drive their subscribers’ experience, if they want to.  Compared to controlling the experience by deciding which software ran on the phone at what cost and price, responding agiley is pretty different. To play the game now, mobile operators have to be marketers, and discover and respond to opportunities, not just act as a gatekeeper or wait patiently for the next generation. Those are new challenges and hard work.  But it sure is better than letting all those opportunities go to others, over the top, don’t you think?

Summary

This is  part one of my argument (or rant) about why mobile operators need to respond faster—at cloud speed—and not get mired down in traditional mobile evolution speed. Mobile operators need to see the edge as the beginning of an interaction between cloud and cellular that may well change cellular profoundly, and they must react accordingly. That’s my personal opinion, but even if you don’t think that outcome is likely, you need to take it seriously if you believe it’s possible (if you don’t think it’s possible, review what happened to big IT incumbents and how that worked out for them).

In a coming blog I’ll talk about a second largely unrecognized value of edge applications—leveraging the high-bandwidth to the user/device (not just the lower latency).

Peter Christy is an independent industry analyst and marketing consultant. Peter was Research Director at 451 Research and ran the networking service earlier, and before that a founder and partner at Internet Research Group. Peter was one of the first analysts to cover content delivery networks when they emerged, and has tracked and covered network and application acceleration technology and services since. Recently he has been working with MobiledgeX. You can read additional posts by Peter on the State of the Edge blog, including Edge Platforms and The Inevitable Obviousness of the Wireless Edge Cloud.