Vodafone pins future on 'telco-as-a-service' strategy

A pioneer and driver of TM Forum’s Open API and ODA programs, Vodafone Group has been reimagining itself as a software company for the past several years. It is developing an ambitious “telco-as-a-service”, or TaaS, strategy that serves as a foundation for all the Vodafone operating companies.

“We are trying to abstract our network, our IT and our products through the same technology layer,” explains Justin Shields, Platforms and Solutions Director at Vodafone Business. “We call it telco-as-a-service. Everyone is now using that same functionality to expose their infrastructure, so the network, IT and my product team are all putting their services into that same TaaS. It can be used internally or externally, and we are seeing increasing demand externally.”

TaaS is Vodafone’s implementation of network-as-a-service (NaaS). Through the TaaS platform, northbound APIs are exposed for internal and external developers to use in creating new products and services. A group-level Vodafone IT team does the work of exposing the network through the APIs.

Dr. Lester Thomas, Head of New Technologies & Innovation, Vodafone Digital & IT, leads development of Vodafone’s ODA-based architecture, which the company refers to as V-ODA (see graphic). Vodafone was awarded “Running on ODA” status last year. Shields is in charge of all engineering of products and platforms for Vodafone Business. He leads the team responsible for technology strategy and product development, while his counterpart, Giorgio Migliarina, heads up product management. Vodafone Business hired Johanna Wood from Google to lead the company’s API marketplace efforts, which are part of Migliarina’s group.

IoT as a driver

A key driver for Vodafone’s platform model is “moving from our millions of human customers to billions of things”, says Thomas. Instead of offering just four primary services – fixed voice, broadband Internet, mobility and TV – he envisions using 5G network slicing to support thousands of IoT services per vertical market. “Unless we can drive this through software-driven approaches and automation, we’re not going to be successful,” he says.

Vodafone is starting by exposing fixed line connectivity “as-a-service”, according to Thomas. But he adds that this “is only really scratching the surface. I think the real benefit comes from what else that enables you to do.”

Vodafone’s TaaS architecture is layered like ODA, with connectivity as the base layer. “Our plan is not to build all these layers and only sell at the top layer,” says Thomas. “Our plan is to [sell at multiple layers]. You can get machine-to-machine connectivity from Vodafone, which is very, very basic...We then have an IoT platform. And then on the IoT platform, we can build digital twins and device management and other things.” He adds: “Connectivity is never going to drive more new revenues. We might make things more efficient and easier to consume, but the new revenues come when there is something taking advantage of that [connectivity].”

Easy as A, B, C

To expose connectivity services, Vodafone has classified all its products into A, B and C categories. Group A includes local, infrastructure products like fixed line or mobile connectivity. Category B includes global products that don’t depend on Vodafone connectivity – for example, IoT device management-as-a-service. Group C includes new products that combine A and B products. “So, we’re saying there are things we can build over the top [of the network], but they’re integrated into the underlying network services,” Thomas explains.

Indeed, the global products group that Shields heads up is developing C-class products targeting enterprises in industry verticals such as manufacturing and healthcare. “The ideas for new products and services come out of our own teams – the intersection between IT, network and R&D,” says Shields. “They also come from customers.”

For example, Vodafone’s mobile private network (MPN) platform was co-created with customers. The company offers two models, one giving enterprises a dedicated core and access network and the other providing dedicated access but roaming on Vodafone’s public core network. “We have built an MPN platform layer which is like a control layer,” Shields explains. “This then interacts with our core network via our TaaS…So, we have this platform approach – other people build applications that work on our TaaS, or we might decide ‘that is a good idea’ and build our own products.”

Drone operations are an example where Vodafone is building its own products. The company is drawing on learnings from the TM Forum Catalyst program, which Vodafone has used for the past few years to test the drones-as-aservice concept. The company is developing a portal, a drone coverage API and location services to allow drone operators to produce coverage maps using network intelligence. Operators can then use the maps to plan predetermined flight paths that avoid obstacles and crowded areas, allowing drones to be flown safely and in compliance with regulations for beyond-line-of-sight flights.

A software focus

Vodafone Group is in the process of hiring 7,000 new software engineers as part of its platform transformation. According to Ahmed El Sayed, Vodafone UK CIO and Europe Digital Engineering Director, the company is re-evaluating all its internal processes, asking questions such as: “Are we fit for software engineers? Do we have the right productivity tools for DevOps so that they can come and deliver from day one? Do we have the right technical career path for them to progress and be able to still have tactical value to the company while they’re progressing on their career?”

Agility is also key. “The future is about our digital engagement with the customers and offering the right products at the right time,” he says. “And for this, we need to have the right agility. We need to be able to co-create with our customers. And we see that the only way to do this is actually to build our own technologies rather than buying it. For sure we will not build 100% of everything, but the core digital engagement – our apps, our portals – this is something we would love to build end to end.”

This article is an extract from our recent report Establishing links: Platform models in the Open API economy, which you can download to find out about other operators hoping to move to the next stage of the API economy to create platforms and marketplaces.