The rise of more software in the telco town

As software replaces telecom systems, hardware, and infrastructure, the looming threat of security breaches and performance bottlenecks cannot be ignored

The joke was that hardware is anything in a computer that can be thrown out of the window. Perhaps, that is how frustrated users can sometimes feel. After all, hardware can sometimes get exhaustingly slow, complicated, heavy and difficult to maintain.

That should explain why software began to elbow out hardware in so many places in telcos’ systems, infrastructure, and back-end areas. From storage to network to control panels, a lot of hardware is now being ‘softwarised’ and virtualised.

Enter the age of SDN, SDDC and NFV. And wait, there is more on the way.

Meet software – in the hegemony of hardware

Software is about fluency, softness, and flexibility. This essence can break many dead-ends that hardware would struggle with. With the software, one can partition things, simplify stuff, can carry less weight than before, and also play around with it.

SDN or software-defined networking does something that completely changes the hardware paradigm of networking. It separates the control plane and data plane and, thus, gives traffic control, and network efficiency. This explains why many communication service providers (CSPs) began investing in SDN for end-to-end network and service administration and control.

“Telecom companies should prioritise investing in advanced security solutions that utilise data analytics for real-time threat detection and incident response.”- Prof. Bhaskar Ramamurthi Department of Electrical Engineering, IIT Madras

Automating network administration can lead to easier provisioning, configurations, visibility, agility, and flexibility of networks, which in turn can help CSPs reduce Capex and Opex through data-driven digitalisation and softwarisation.

According to ResearchandMarkets, the SDN market can grow by USD 25.97 billion during 2021-2025. A Future Insights report indicates that the global SDN is likely to jump from USD 16 billion in 2021 to USD 95 billion by 2032. The demand for SDN emanates from the need to simplify and manage networks which have grown in both size and complexity in the last few years.

The power of software has trickled into many other areas as well, spawning a new species altogether with SD-WAN, NFV and SDS.

SD-WAN or Software-Defined Wide Area Network is seen as an answer for all the necessary tools and intelligence that a telco needs to dynamically scale and centrally manage networks through a single and intuitive user interface. Especially after 87% of enterprises are moving towards Internet-based connectivity as the main WAN technology, to the detriment of Multiprotocol Label Switching (MPLS).

Deloitte has outlined how all this will change the way traffic flows on the networks, triggering the need for flexibility and security more than ever before. The reliance on MPLS to connect sites to datacentres can result in increased network spend, traffic bottlenecks, network congestion, and additional MPLS capacity. SD-WAN simplifies WAN management and operation by decoupling networking hardware from its control mechanism.

Deloitte’s analysis of the Annual Recurring Costs of traditional WAN networks revealed that connectivity is the prime target for optimisation, with WAN connectivity accounting for 60-70% of costs. This highlights the need for a new approach to decrease bandwidth due to the general increase in traffic, as carrying Internet traffic over expensive dedicated MPLS links is cost-inefficient.

According to the Gartner Magic Quadrant report for WAN Edge Infrastructure 2021, by 2025, 40% of enterprise locations will rely solely on Internet WAN connectivity to deliver flexible, cost-effective, and scalable bandwidth, as compared to 15% in 2021. This report highlights the market’s shift from traditional branch routers used to connect branch locations to datacentres in an MPLS implementation, towards SD-WAN.

“Upgrading mission-critical infrastructure to manage increased IT workloads and data strategy can propel businesses forward in the digital era.”- Srinivaschary T Lead - Solution Architect, Dell Technologies India

The SD-WAN provides a more decentralised architecture and cloud workload support and is widely replacing edge routers. It also adds application-aware path selection across multiple links, centralised orchestration, native security, and other application performance optimisation functions such as WAN optimisation. The report predicts that 60% of enterprises will implement SD-WAN to enhance agility and support for cloud applications by 2024, as compared to about 30% in 2020.

In 2021, the worldwide SD-WAN market experienced remarkable growth of 35%, generating record revenue of more than USD 2 billion, as per a report by Dell’Oro Group. It is that also remarkable that the hardware-based Access Router market witnessed a decline in spending, as enterprises shifted towards software-based SD-WAN solutions for branch infrastructures.

Enterprises accelerated their network infrastructure upgrades compared to pre-pandemic times, and Dell’Oro research indicates that the SD-WAN market is growing at strong double-digit rates in all regions of the world. The demand for SD-WAN solutions surged in 2021 as enterprises optimised their branch network architectures for cloud services and workloads. The pandemic created a pent-up demand and also drove companies to evaluate and adopt SD-WAN to support their more distributed workforce.

Let us talk about SDN’s cousin Network Function Virtualisation (NFV). The NFV market which grew from USD 3.9 billion in 2021 to USD 4.1 billion in 2022, is estimated to reach USD 7.8 billion by 2032, according to Fact MR. One of the key reasons for the growth of the NFV market is the cost savings that organisations can achieve by using network virtualisation technologies. These technologies allow companies to reduce the expenditure incurred during the installation and maintenance of hardware equipment.

The pandemic has also contributed to the growth of the NFV market. Telecommunications and essential services were critical during the lockdowns, leading to an increased demand for data-intensive applications and a growing trend of cloud-based networking systems.

SDN, SD-WAN, and NFV are examples of how software is seeping into hardware from all angles and with a significant force. However, the question is whether this ‘software imperialism’ has changed anything for the better. Were we better off with hardware, or are we better now with more software?

A chess-board battle or a real war?

Uprooting the deep-seated footprint of hardware in any infrastructure is neither practical nor magical. It is unrealistic to expect a simple solution by pouring in a lot of software. Managing software can be harder than hardware. It can be challenging to monitor its performance and ensuring its security may take more time than with hardware. Additionally, taking backups and rebooting systems is a different process in software than in hardware.

Furthermore, the software can expand and spill over in shadows, leading to sprawls, over-provisioning, hidden costs, and chaos. Therefore, it only makes sense to make a huge ‘pivot’ to software if the gains are absolute, enduring, and worth the switch, not just incremental improvements.

In 2019, Gartner released its Hype Cycle report on enterprise networking reporting that SD-WAN was quickly becoming a mainstream technology while SDN had become obsolete. Gartner analysts observed that true SDN technologies had not gained significant market traction. The report revealed that networking technologies had undergone incremental improvements focused on speed and features. When I&O leaders were asked to deliver more services at an increasing pace with fewer errors and at a lower cost, it became imperative that enterprises achieve truly-agile networks. The time for incremental network evolution was gone.

However, even SD-WAN had to prove its worth beyond being just an acronym change. Forrester’s Principal Analyst Andre Kindness argued in 2022 that SD-WAN could be walking into the sunset without a market of its own because it was just a feature or a set of features, rather than a standalone solution. Additionally, security was a significant consideration. Forrester clients had conveyed that they had not realised the security ramifications of incorporating SD-WAN.

And hardware may not have been exactly replaced by software.

According to Prof. Bhaskar Ramamurthi, Department of Electrical Engineering at IIT Madras, the belief that there is ‘more use of software’ than hardware is a misconception. He explains that in the telecom infrastructure, much of the software now runs on commodity datacentre hardware (servers) instead of custom-built high-performance hardware. “This is because the commodity hardware had become more powerful,” he says adding that only the algorithms in the radio transceivers continue to run on custom hardware, specifically at the tower top and base.

Moving to more software has its share of ifs, buts and caveats.

What is coming next – Rooks or Bishops or both

The transition towards software has become imperative in today’s era. However, steps need to be taken to ensure that it is more of a solution than another problem.

One such step is to avoid unexpected costs and resource constraints while striving to become lean and agile. Deloitte suggests conducting a comprehensive analysis to rank applications based on criticality and their network requirements. It is essential to address both performance issues and future application requirements before implementing SD-WAN. Additionally, it is crucial to establish a robust security posture that includes ensuring visibility of all assets, traffic flows, users, and identities, and defining how data is protected when traversing the WAN.

Moving forward, new forces such as artificial intelligence (AI), Secure Access Service Edge (SASE), and Security Service Edge (SSE) will claim their share of this once-hardware kingdom with a new ferocity. These technologies could provide the much-needed answer for better monitoring, control, and efficiency.

“Cloud providers such as AWS, Microsoft Azure, Google Cloud, and smaller providers will be the primary source of APIs in the future.” John Strand CEO, Strand Consult

According to a report by Dell’Oro Group in March 2023, the global SASE market exceeded USD 6 billion in 2022. The demand for security is expected to double the revenue of SSE between 2022 and 2027. The networking segment of SASE, particularly SD-WAN, experienced a 30% YoY revenue growth as enterprises shifted to SD-WAN solutions and the supply chain for hardware substantially improved. Modernisation of networking and security for enterprise branches and hybrid workers could lead to total SASE revenue surpassing USD 60 billion between 2022 and 2027.

Gartner’s report for WAN Edge Infrastructure 2021 also predicted a significant increase in the use of secure SASE and AI functionality in enterprise deployments of SD-WAN over the next few years. It is expected that by 2024, more than 70% of SD-WAN customers will have implemented a SASE architecture, compared to 40% in 2021. The report also predicted that by 2024, 20% of SD-WAN centralised configuration and troubleshooting will be touchless via an AI assistant. The Dell’Oro report also noted that many vendors are leveraging the convergence of SD-WAN and network security technologies to differentiate their SD-WAN solutions.

Srinivaschary T, Lead-Solution Architect, Dell Technologies India, highlights that businesses are eager to adopt new technologies like AI and ML for rapid digitalisation. These technologies require adaptable and scalable infrastructure that automates critical processes without compromising security.

“Upgrading mission-critical infrastructure to manage increased IT workloads and data strategy can propel businesses forward in the digital era. Businesses need to harness the transformative power of technology to build a secure digital foundation for the future,” he says.

Prof Ramamurthi suggests that telecom companies should prioritise investing in advanced security solutions that utilise data analytics for real-time threat detection and incident response. This will enable them to stay competitive in the industry and reap the full benefits of software services. He emphasises that taking security seriously is crucial for telecom businesses to thrive.

To achieve this, telcos should consider implementing modern security measures that leverage data analytics to monitor network traffic and identify anomalous behaviour that may indicate a potential security threat. These solutions can also provide real-time incident response, reducing the risk of a security breach and minimising its impact if one occurs.

Investing in such solutions can also result in a visible return on investment for telecom companies. By preventing security breaches and ensuring the security of their customers’ data, telcos can build a reputation for trust and reliability, which can translate into increased customer loyalty and revenue.

John Strand, CEO of Strand Consult, emphasises the crucial role of APIs in the evolving landscape of telco infrastructure. He notes that while mobile operators and the GSMA launched new APIs at Mobile World Congress, he does not believe that replicating the OneAPI concept from 2009 will be successful. “That concept was never a success, because operators could not deliver a business model with the services. Instead of developers using operator APIs, they chose to use the APIs that are in the Android and iOS operating systems.”

Strand predicts that cloud providers such as AWS, Microsoft Azure, Google Cloud, and smaller providers will be the primary source of APIs in the future. “Additionally, there will be APIs based on over 140 open interfaces in 3GPP’s work,” he says predicting that going ahead cloud providers will be the winners, similar to the success of Apple and Google’s app stores.

Looks like the new definition of ‘hardware’ is anything and everything that can be replaced with ‘software’. Throwing anything out of the window is not something we, or our environment, can afford. And that is precisely why software should get better. It should become the baby. Not the bath water.

By Pratima Harigunani

pratimah@cybermedia.co.in