Editor’s Note: With 2014 now upon us, RCR Wireless News has gathered predictions from leading industry analysts and executives on what they expect to see in the new year.
Mobile technology, social media, and the cloud have fundamentally transformed communications and profoundly impacted the telecommunications industry. Traditional telecom operators are at risk of becoming commodity data transport players as over-the-top providers seize the customer experience and monetize operator assets. Forward-looking operators are embracing change, launching value-added solutions that cater to an increasingly interconnected world. By moving up the value chain, service providers can combat competitive threats, take back customers, and restore revenue and margin growth.
Behind this massive transformation is a fundamental and unforgiving transition from traditional technologies such as TDM to IP. A major challenge for operators and enterprises is funding these transitions, while maximizing existing investments and evolving their networks vs. disruptive and costly forklifts. Open standards and software defined networking becomes pervasive, yet companies must quickly be expert in managing them and the massive data centers behind them.
1. Going green: More efficient data centers
With major advances in productivity and mobility resulting from this transition, security risks have increased, as has the impact of power consumption. While cyber-attacks are front-page news, other issues like the environmental impact of cloud computing receive far less attention. Yet today’s data centers consume staggering amounts of electricity and water on cooling alone. Most data center operators rely on outdated chiller systems that waste water and energy. Every year, 1% of U.S. power consumption and trillions of gallons of water are squandered cooling computer gear. Beyond the environmental costs of the energy consumption are the costs to the bottom line, which if addressed, can significantly free up funds for investing in IP transformation of aging systems.
2. Security threats: Preparing for cyber warfare
While the environmental impact is often overshadowed by security, these threats often cannot be overstated. Security threats have been well documented since the earliest days of the Internet. But the security landscape has evolved dramatically in recent years. Well-funded organizations (including government-sponsored groups) are perpetrating incredibly sophisticated attacks that are increasingly difficult to detect and contain. Potential targets include the world’s financial systems, utility grids, corporate IT systems, and public water supplies.
3. Envisioning the future network
We live in an increasingly connected world. We are always on-line, always collaborating – for work and for pleasure. Thanks to smartphones, tablets and wireless broadband the entire planet has become one big digital exchange. Every minute 72 hours of video content is uploaded to YouTube, 2.4 million entries are posted on Facebook and 278,000 tweets are broadcast on Twitter.
The Internet is transforming the way we shop, travel and socialize. Location-based applications and cloud-based services are spawning new virtual marketplaces that intelligently connect consumers and merchants.
4. Converged entertainment: Surf, watch, buy
The Internet is revolutionizing the entertainment industry as well. Internet-capable televisions, gaming consoles and intelligent remotes are turning passive viewers into interactive consumers. Digital-video recorders and Internet streaming services like NetFlix and Hulu are changing the way we watch television and disrupting traditional advertising models. No longer held hostage to network programming, we watch what we want, when we want it.
As viewers skip through commercials, advertisers must find new ways to reach customers. Many are placing their hopes on product placement – embedding brands directly into television shows and films. Soon, with the click of the remote you’ll be able to purchase the same wristwatch your favorite actor is wearing.
5. OTT: voice, video, messaging
Perhaps no business has been impacted by the Internet more than the telecommunications industry. Consumers are flocking in droves to OTT services like Skype and WhatsApp, eroding operator revenues. (Skype is now the world’s largest carrier of international voice traffic.) At the same time, new business opportunities are arising to federate OTT services and bridge loyal OTT user communities.
6. Connectivity is everywhere – including up in the air
Mobility is the cornerstone of the new always-connected world. High-speed mobile broadband and Wi-Fi are ubiquitous. These days you can even surf the Web on a transatlantic flight. Our thirst for mobile bandwidth is quenchless. But radio spectrum is finite and expensive (10-times the cost of fiber). New network technologies like femtocells and heterogeneous networks are emerging to offload wireless broadband traffic onto fiber. And new business models are emerging to monetize precious radio spectrum.
7. New wireless carriers: Countries, cities, public space owners
As the old adage goes, all business is local. Money is to be made wherever people gather, wherever networks are built – in airports, shopping malls, convention centers and stadiums. Going forward, governments and public space owners will become local wireless carriers. Some forward-looking governments are already identifying innovative ways to monetize network assets. The city of New York is entering the advertising business, transforming telephone booths into digital kiosks with free public Wi-Fi and sponsored content. And instead of simply auctioning off spectrum, Turkey is on its way to becoming a wireless wholesale provider.
8. The ‘Internet of things:’ New challenges and business opportunities
The Internet is more pervasive than ever. In the new “Internet of things” everything is connected – cars, wearable technology, smart appliances, medical devices, manufacturing equipment and the electric grid. Billions of connected devices means more data, gathered from more places, with more ways to increase productivity and improve society. It also means new challenges and business opportunities. I can’t think of a better time to be alive and in business.
David Walsh is president, CEO and chairman of GenBand, a leading developer of multimedia networking, cloud and software communications solutions. Previously, Walsh was a managing director of One Equity Partners (OEP), specializing in technology, telecom and entertainment. He assumed the position of GenBand chairman in 2010 following the acquisition of the Nortel carrier VoIP and application solutions business, with OEP providing the investment capital. Presently, Walsh also serves as the chairman of Netas, Turkey’s leading IT services business, and Aligned Energy, which is altering the landscape for data center infrastructure.
