Going digital by reconstructing IT

The last few decades have seen great progress, with IT transforming the way we communicate, learn, shop, travel, and socialize. We now stand at the forefront of a new digital realm where people can roam unshackled by time and place, which will continue to grow as more people and things get connected. In the working world, industries will digitize, and business, R&D, production and sales models will completely change.

New revenues for operators 

While telecom networks drive the information era forward, the digital dividends from user growth are declining. Mobile penetration is approaching saturation, user demand is forcing operators to upgrade their networks, and OTT apps are cannibalizing core services. These factors are decelerating operators’ previously rapid growth and shutting down the digital dividend revenue stream. What’s the answer? Huawei believes it exists in different stages of physical-digital integration, with each stage offering operators different revenue sources.

Demographic dividend: the earliest stage where the first networks enabled long-distance communication and fulfilled basic communication needs.

Traffic dividend: the current stage of bandwidth expansion where people's traffic demands are increasing, content is changing from voice and text to images and video, and channels are shifting from broadcast to on-demand and customized. The next five years will see mobile broadband subscribers jump to up to 4 billion and bandwidth demand soar by up to fivefold.

Data dividend: the stage where cloud computing and big data surge, leading to diverse services and moving all kinds of sectors online. Enterprises’ internal IT applications will migrate to the cloud, and centralized supply will enlarge the corporate market.

Information dividend: the stage where the digital world eclipses the physical world in size, prompting new discoveries and unlimited possibilities. Huawei predicts there will be 100 billion connections by 2025.

Transforming operators’ IT systems

To effectively mine data and information dividends, operators must transform from asset-heavy beasts into agile, efficient vectors that can quickly adapt to changes in external demands and internetize user experience. 

User experience must be ROADS: Real-time, On-demand, All-online, DIY and Social. ROADS requires operators to restructure their IT from internal support systems to value-creation systems. What does this require?

Cloudification and software-defined infrastructure 

Cloud computing is initiating ICT convergence, and represents the next key growth point for operators. IT infrastructure will continue to cloudify, greatly improving infrastructure resource use and efficiency. Software-defined telecom networks will emerge on the back of software-defined networking (SDN) and network function virtualization (NFV). New service TTM will drop, and ROADS capabilities on the upper layer will sprint with new agility. At this time, more than half of companies will entrust no less than 50 percent of their IT assets to third-party (3P) data centers, and cloud service providers will provide 60 percent of all storage capacity. 

Local branding and resources give operators the edge over multinational cloud companies, and cloud services provided for customers on platforms housing cloud telecom infrastructure will give them revenue.

Huawei is one of the first players to start building cloud data center solutions featuring open, distributed cloud architecture and IT infrastructure platforms. As of June 2015, we had built more than 660 data centers for customers across the world, including 225 cloud data centers, and more than 700,000 virtual machines. 

Next-gen operating systems (OS) for ROADS

To empower carriers' business, the next-gen OS must be able to handle resources, services, and management. Our vision of what we call Telco OS comprises three core modules:

Infrastructure Enabler System (IES): flexibly schedules bottom-layer ICT infrastructure. 

Big Data Module: enables operators to mine massive amounts of user data, recreate user service scenarios, generate high-value service policies, and optimize operations. 

Business Enabling System (BES): allows users to develop products and services by providing an agile interface for designing plans, developing partners, and facilitating user service subscriptions. 

Huawei is currently developing the Telco OS, and has already deployed BES and Big Data Modules.

Open, aggregated digital platforms

Carriers must help advance the digital realm by building open service platforms and digital ecosystems for society. They need to aggregate innovations and content to become digital platforms that merge the physical and digital realms.

To support carriers, Huawei has designed Digital inCloud, a solution that offers a unified open platform and alliance. Digital inCloud opens telecom resources to partners for quick and easy selection and use. This alliance transforms networks from closed service environments to open digital ecosystems that connect partners and resources, helping operators quickly aggregate partners and provide diverse service content.

Beyond connectivity

With cloudified infrastructure, ROADS-capable OS, and open digital platforms, operators can provide high-quality connectivity and cloud services for individuals and enterprises. They can attract players from different sectors and 3P developers to join their ecosystems, develop apps for different vertical industries and market segments, and cultivate user-oriented long-tail markets.

Huawei already provides public cloud services. We are expert at cloud system O&M, and have helped operators expand into cloud service markets by providing system integration solutions that enable vertical integration.

Going fully digital

Telecom digitization has begun, and more operators are transforming. Huawei began deploying resources in a mainly private cloud back in 2008. In 2010, we formally entered the cloud market with our Cloud Plan, later expanding into the market with a range of solutions developed from our vast research strength. In 2012, Huawei proposed SotfCOM, a full transformation solution covering architecture, network, operations, and services. 

Huawei understands that transformation is an integrated systems project where products alone will not suffice and services are crucial. Our stance has shifted from product-driven, service support to growth driven by both products and services. Customers can transform more easily with Huawei's one-stop software and hardware solution — products, consulting, planning, integration, and support.

The telecom industry faces a long road towards digital transformation, presenting a great challenge for both operators and equipment providers. As a long-term partner, Huawei will walk shoulder-to-shoulder with its customers on the path towards digital transformation and a Better Connected World.