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See how SaaS helps CSPs transform their business

See how SaaS helps CSPs transform their business

“Where we’re going, we don’t need roads,” proclaims Doc Brown at the end of Back to the Future. Swap “roads” for “on-premises software” and you have the situation facing today’s CSPs. Their business has relied for decades on OSS and BSS applications running on in-house infrastructure, but that setup is increasingly unfit for a world where customer needs are changing fast.
 
With 5G opening up new possibilities to deliver innovative, value-added services, CSPs need software that can adapt effortlessly to meet dynamic market opportunities. But the cost and overhead of managing legacy apps means CSPs are stuck in the role of integrators, while disruptive players surge ahead with new 5G and IoT services.

SaaS brings an Uber-like model to business applications

Essentially, the new players are catching an Uber to the future, while CSPs are stuck tinkering with the ageing DeLorean they bought in 1985.

The beauty of Uber is that it does away with vehicle ownership, relieving people of the burden of buying, housing, maintaining, fueling and upgrading their own car. Instead, they can simply summon a car when they need to go somewhere, and only pay for the time they spend in it. Moreover, the Uber model gives customers total choice – even down to the music that plays during the ride.  

Now, SaaS is doing the same for software ownership, by delivering easily-adaptable software on demand from the cloud. With the software vendor taking on responsibility for maintenance and updates, and the cloud vendor providing scalable infrastructure, CSPs can serve customers better while freeing up resources to focus on further transformation.

It’s a model that’s spurred transformation in other industries, and telecoms is fast catching up. “A growing number of CSPs are evaluating and deploying applications delivered in a software-as-a-service (SaaS) model,” wrote Analysys Mason in August 2020. “SaaS is increasingly viewed as the delivery model of the future and has been widely adopted in other industries.”

Legacy BSS and OSS are tough to modernize

Even within the telco industry, SaaS is already proving its worth in non-business-critical areas. Productivity apps like Microsoft Office are increasingly used on a SaaS basis – turning them from a capital investment into a manageable monthly opex cost, and ensuring users are always on the same, current version.

But critical areas of the business – such as OSS and BSS apps – are much harder to transition to cloud-native architectures and SaaS. As McKinsey wrote in its April 2021 Blueprint for Telecom’s Critical Reinvention: “Transforming a legacy stack cobbled together over decades of business evolution and M&A is extremely costly and slow.”

At the heart of the issue is the customized nature of legacy applications, which have had vast amounts of code added or modified over the years to meet internal and external demands. Those changes may have served a purpose in the moment, but over time they’ve created technical debt that makes application modernization a daunting task.

So daunting, in fact, that Omdia found that around 15% of CSPs have no plans to move core BSS like billing, CRM, and rating and charging to the cloud, and a further 20% only plan to do so by lifting-and-shifting their on-premises apps into a third-party data center.

That reluctance to let go of legacy apps will put CSPs at a disadvantage. A recent Nokia survey found that 71% of CSPs want to move beyond connectivity and deliver innovative new 5G-enabled services. But according to a study by TM Forum, 72% of CSPs believe 5G revenue growth will depend on OSS and BSS transformation.

SaaS enables 5G monetization in areas like analytics, security and slicing

In short, CSPs that fail to modernize will miss the chance to offer new, high-value services in areas like network analytics, security and 5G network slicing.

In analytics, for example, 5G will bring a new capability: the Network Data Analytics Function (NWDAF). It will standardize the way CSPs collect and analyze network data, making network management more efficient. By deploying NWDAF in a SaaS model, a CSP can turn it into much more than just a network function, by using open APIs to share network data with an ecosystem of partners, and co-create unique and valuable propositions.  

A good use case is 5G inspection drones. With network analytics as a service, a CSP could work with providers of other data-driven services to bundle real-time collision warnings, adverse weather warnings, and 5G and GPS reliability forecasts. The monetization possibilities increase further when network data is combined with other internal data sources, such as subscriber demographics.  

On the security side, the rapidly evolving cyberthreat landscape requires new thinking and new solutions. With IoT infections doubling year-on-year and high-profile data breaches becoming more frequent, traditional, local security solutions require a lot of costly maintenance and updates even to try to keep up – let alone get out ahead of new threats.  

An “as a service” approach, by contrast, allows CSPs to give customers the highest levels of protection against threats such as phishing, ransomware and other malware in a highly scalable way and at minimal cost.  It could also open up monetization opportunities, by offering security services to consumers and enterprises on a “try-and-buy” basis.

The area where “as a service” models have perhaps the greatest potential is in 5G network slicing. Without the need for upfront investments in licenses and hardware, CSPs can trial new slicing-based services easily and at low risk.  

 A future “5G network slicing as a Service” might include orchestration to design, deploy and assure a slice, network analytics to ensure that SLAs are met, security to ensure the slice is protected from the ground up against new and emerging cyberthreats, and charging to help monetize new, low-latency 5G services.

CSPs can start small and scale when needed

With endless possibilities to explore, a key advantage of “as a service” models is that CSPs can start small by trialing one or two capabilities at low cost and low risk – and then scale easily when the business case is proven.

Vodafone, for example, recently moved its RAN network data from multiple on-premises data lakes to one big “data ocean” on Google Cloud Platform. Once its data was collected into one place, Vodafone was able to quickly deploy an application, the Nokia Anomaly Detection Service, to identify and fix issues across the network.

With the pilot deployment showing that the service could deliver a 25-30% efficiency improvement by automating root cause analysis of network issues, Vodafone now plans to roll-out the app across all of its European affiliates and extend the scope to include its core and transport networks.  

SaaS will underpin innovative new services in the 5G era

While Omdia’s research found that one-third of CSPs plan to hang on to their legacy apps, the tides of change may soon persuade them to think again. Telcos are moving their networks to the public cloud in ever greater numbers, reaping the benefits of rapid scaling, easy software adaptability, and lower costs.

Add to that the ability to trial new services fast and at low risk, and the business case for cloud-native SaaS becomes ever more compelling. The DeLorean of software ownership was a fine model for the future in 1985. But in 2021, it’s the Uber of SaaS that will take CSPs where they want to go.

Hamdy  Farid

About Hamdy Farid

Hamdy Farid is the Vice President of Nokia’s Business Applications unit and loves to talk with CSPs and Enterprises about how they can unlock the value of their network investments through secure, intelligent automation. Born in Egypt, Hamdy graduated in computer engineering from Alexandria University, before moving to Canada to tap into the early 2000s tech boom. Today, Hamdy lives in Ottawa with his wife and two teenage children in a trilingual English-Arabic-French home. He’s a self-proclaimed chef who loves to cook and explore various recipes. Counter-intuitively he finds relaxation in the world of motorcycle racing, where he takes pleasure in riding as fast as he can and passing his fellow racers.

Connect with Hamdy on LinkedIn or follow him on Twitter

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