One of the most important questions for many service providers is how to make the most of legacy assets while driving digital transformation? This was addressed by Matthew Allcoat, Chief Architect, Asia, Middle East and Africa, BT Global Services in his popular presentation at TM Forum Live! Asia.

Allcoat started by saying we are only starting to understand the implications of the digital era and what the impact of these trends (see below) will have on our world and network operators’ businesses.

He said the transformation to digital raises concerns about guaranteed quality of experience and continuity to customers while making the transition. Allcoat began by exploring how virtualization and software-defined has affected business and revenue models so far – and answered in three major ways:

• In the compute domain – eight or nine years ago, data center company Equinix saw server virtualization as a big threat to its business. In fact it brought amazing opportunities through software-defined networking, orchestration, software-defined data centers. The company started to build proximity hosting services close to AWS and Microsoft Azure centers to enable hybrid cloud solutions – a new business model emerged through an accidental inversion of the original model, brought about largely by ‘shadow’ (that is, unofficial, piecemeal) moves to the cloud by businesses.

• Communications – BT thinks a whole new class of network is evolving, on a global scale, in the shape of software-defined networking for applications center infrastructure (ACI), applications-centric networks and wide area networks. Allcoat said, “It is a single-purpose network you consume for a while then don’t need; like AWS services, you just pay for what you use.” He also mused that, “Although on the face of it, this is worrying for any company with big fixed assets, everything is cyclical and this is more like the old model of line rental and charging by the minute.”

• To do business by taking everything online, establishing a digital pure-play or evolving bricks and mortar – there are so many otions for the digital possible. Where you go with this depends on your business. Allcoat gave the example of an Indonesian bank that wanted to offer a purely virtual consumption-based model, but none of the hyperscale digital natives have a presence in that country, and also the company wanted to avoid upfront investment. So now, with BT, the bank pays for what it consumes, as it goes, avoiding upfront capital investment and ensuring costs are directly linked to revenues.

Where to start?

NFV – Allcoat acknowledged there many valid places to start. He said, “NFV is a popular one and BT demonstrated this, with some other companies, to customers back in 2011. The success of that demonstration meant that BT and its partners went on to form the ETSI working group on NFV. In the UK, we have 17 million residential customers and we’ve virtualized our broadband access servers, which has reduced our electricity consumption by about by about 40 percent which equates to about £0.5 million.”

This has allowed BT to sell excess carbon credits, so the move has proved financially beneficial as well as being a big win from the point of view of becoming a sustainable organization. Hence this strand of transformation has brought unexpected bonuses as well as the expected benefits of NFV, like instant-on activation.

­Software-defined networks (SDN) and their sister technology software-defined wide area networks (SDWAN) offer big opportunities. True SDN separates the control and forwarding planes and so enables centralized intelligence, policy and orchestration, which plays to subscription model aready mentioned. Allcoat said, “When it’s deployed on a global scale, you might need to be attached securely to the Alibaba cloud for the next three days and you can just do it. So a lot of opportunities around SDN and the data center, and SDWANs for over the top services.”

He added, “I think these two technologies are going to come together very rapidly and combine as we see policy-orchestrated SDNs using a number of underlying technologies, but extending out of the LAN across the WAN and linking those two environments together.”

X as a service (Anything or everything as a service) – in this digital world, we’re moving to this anything as a service model, whether it’s a virtual server at Amazon or WAN as a service instead of permanent fixture. It will increasingly apply to cloud services integration (CSI) too. Allcoat explains,”You buy more than one type of cloud service, then make the app you want by combining them.

“Let’s say you have Salesforce, a BT contact center and enterprise resource planning from Oracle. You might want to create an application that triggers an outbound calling campaign using these assets and capabilities. Indeed, BT has this offers cloud services integration (CSI) globally, through our Cloud of Clouds [see TM Forum’s in-depth case study].”

Dyanmic Networking Services (DyNS) will be next – BT has already launched products and will be launching three new product lines this year. The principle behind them is simple but radical: That it should be possible to consume all network services as a service in exactly the same way. Allcoat illustrated this saying, “You might get a Virtual Machine from AWS and bandwidth from a provider of your choice. You should be able to buy network services from us and our rivals, and consume them all at the same time, and they should work together.”

So these six things were BT’s starting points. Allcoat observed, “When I put these slides together two things occurred to me: First, none of these things is real, that is, they are not physical – they are all either virtual or conceptual things you can do. Second, they are all complementary; every one can be deployed in combination with every other one. So the message is this: When you’re thinking about where to start, you can pick any of them, but maybe begin with cloud service integration, then perhaps an SDWAN that allows you to load balance across a traditional private network and the internet, and use it to migrate to a totally dynamic network.”

He added, “I’ve not yet seen all six things at once, but I think that will come – we’re maybe three or four years away.”

The next article will explores HOW to make a successful transformation to digital operations.