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CSPs and Enterprises, post-COVID

Podcast episode 51

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After 16 months of a global pandemic, we’re starting to look for what the lasting impacts will be. What must enterprises and communications service providers (CSPs) do to prepare? Our Jason Elliott looks at some exciting changes from this year so far and the keys to success in what lies ahead.  

Below is a transcript of this podcast. Some parts have been edited for clarity.

Michael Hainsworth: Can't you just wait to get back to normal? There's light at the end of the COVID tunnel. Enterprises are starting to announce plans to return to the office, but do we really want to return? The boss does. PWC polled them and 83% of employers now say the shift to remote work has been successful, but to keep the company culture going, employees will have to spend at least three days a week at the office. I spoke to Nokia's head of portfolio and partnership marketing, Jason Elliott, about the fact that when connectivity is no longer deemed a convenience, but a necessity, how does that change the way telecom operators and enterprises must operate in 2022?

Jason Elliott: What happened was we saw like a huge change that forced us physically separately apart. And the telecom networks became very much essential. So, we changed from this whole paradigm, I think, of seeing connections as a convenience, connectivity as a convenience to networks that are a necessity. And really the telecom providers stepped up very well. I mean, we saw the networks hold up. They were very resilient at that time. 

I mean, there was a huge spike in capacity. I think it was just a shock to everyone, just how much we relied on the networks and how much they were being utilized and for what periods of time. And it really taught us to really think about things a little bit differently as we start to think about the planning for the future of those networks and what we do and for businesses as well, how they think and operate in terms of their own employees and the types of business processes they're trying to work with. And also for us as consumers as well, we realize how important these networks are to us, even just in our social daily lives as we go about the practical things that we need to do, and then communicate with friends and family and loved ones.

MH: Do we find that the telecom operators had to change anything substantial in the way they went about doing their day-to-day work? Because as you point out, the networks were quite resilient to this remarkable surge in demand that was coming from an area that was wholly unexpected. The most wireless operators are expecting it to be on the highways, on the major roadways, not having to beam into people's bedrooms.

JE: After the initial kind of a wave of the data traffic flow, after six months or so, the traffic levels starting to returning to 20, to 30% above the original normal levels. So, they're kind of trying to work with what are the additional demands of capacity on the network. And even as we started in 2021, we've seen, being able to predict what those traffic levels are is actually becoming a little bit more challenging, because we don't know what the operating environment looks like. We pretty much knew what the nine to five routine looked like in terms of the traffic patterns, particularly as people travel in and out of cities to do their work, and as they come home again to suburban and rural areas. Now we see traffic spread out over wide geographies.

It happens at different times of the day, because people are working at different hours and businesses are trying to accommodate flexibility in terms of both their employees and also being able to address peaks in demand that we hadn't seen before in different timeframes. So, it's really, I think, they're looking to become a lot more flexible in the way they build and maintain and operate their networks. And like all of us, I think every single business has trying to work out how they build that flexibility and resiliency into their business processes and the operational processes as well, to be able to ensure continuity of connectivity and businesses are always there.

We see this continuing in certain instances or even for small businesses that want to continue to operate as well, particularly like in outdoor locations, so where they can't have a physical premise anymore to do indoor serving. Where they have the ability to be able to go outdoors, they can connect their cash point of sale systems using these kind of like WiFi hotspots to do that. So, they're also thinking about going forward, what are those services for what's called the prosumer or the pro office, that the people now that will continue to work more from home as well.

And what do those service offerings and capabilities need to be? And some of the things that we've seen particularly that are challenging that go along with that is how do you provide the right level of security for those different types of employees that are now working in more of a home office environment. If you think about it normally if you had most of your employees working indoors and you're on a local area network, you're in control of that network like physically. And now the question is for a lot of enterprises is how do I maintain that same level of security with a distributed hybrid workforce? And I think a lot of service providers right now are looking to how they can actually address that with security solutions to be able to do that.

MH: That's a fascinating point. Specifically that in the early days of work from home, we saw a tremendous surge in security problems. Phishing attempts, all sorts of scams, means of getting into the corporate network from not the back door, but from the front door of the home.

JE: Yes. And I think there are other challenges as well, apart from social engineering and the remote workforce as well. As you start to digitalize certain parts of your operation that there are other challenges that come with that from a security perspective as well. So, being able to detect those threats and really kind of be able to respond to them in real time, having the intelligence in the network to understand where those threats can come from and be able to monitor that across the entire network. So, visibility across the entire network for any type of threat or operational, abnormality or concern is really, really important.

And we've seen that actually throughout the recent months in terms of what the challenges are, and in making sure that these mission critical networks are secure. And this is going to be an ongoing concern that needs to be addressed. And there are many solutions, there are many types of aspects to tackling this, not just from a software point of view, but also in working practices as well. Being able to educate the workforce to understanding what those security concerns can be, how they can help ensure the company remains secure as well, as well as having the software and the processes in place to be able to detect and then respond to those threats that are happening now and obviously in the future.

MH: Yeah. I wouldn't give the security troubles of a chief security officer to a monkey on a rock in the first six months of the COVID-19. What about the last six months we've been going through? Talk to me a little bit about some of the key milestone activity that's been going on through the first six months of 2021, as we found our footing, but we also saw a bit of a light at the end of the COVID tunnel.

JE: It's incredible. I think when you put people and technology together, this is the amazing things that have happened that we've seen in the first six months of the year. And I only think about the types of boundaries that are being broken right now in terms of going into space. I mean, this is the first type of activity that we've seen in a long time, resulting to this. The flights of both Virgin Galactic and Blue Origin really kind of make you take a step back and kind of awe in wonder how technology and people working together are breaking these incredible barriers that we've never seen before. We'd never thought possible in our lifetimes for sure. And then that kind of really has spurred like a lot of momentum in our industry, even though we've had 5G and that there are different networks around the world that have been deployed now.

We're seeing some incredible breakthroughs in terms of the capabilities of 5G. So, for example, earlier in the year, we saw one of the longest transmission distances recorded for 5G millimeter wave, which is that high band spectrum that's not actually designed necessarily to kind of, because of the signal, travel so far, but we saw a world record distance of around 10 kilometers being transmitted, the distance between the transmitter and the receiver, which is pretty amazing when you think about it. It's still being able to achieve like gigabit speeds for things like digital divide. And again, when you think about rural connectivity and providing access to people, breaking down kind of like that barrier to access of information is really key to be able to do that. And similarly, again, we saw more advances even in the optical world as well.

So, the necessity to connect the backbone of the network, if you like. So, cities and individual networks and multiple networks together using these passive optical network technologies. We saw this breakthrough in Belgium earlier this year of being able to transmit 25 gigabits per second, actually 20 gigabits per second was the raw data speed across this optical network. And it starts to show you that the capabilities that the technology is having to bring us more data, bring us closer together, be able to develop applications and services that allow us to communicate in ways that we've never really been able to do that before, to either bridge the digital divide for people that were unable to access that before, and also provide new ways of working with each other as well, and enhancing that level of communication overall.

So, there's some incredible breakthroughs, I think, that have happened just in the beginning of the year. And we've seen now already, according to GSA figures, that their 5G subscriptions, for example, grew by 36% in the first quarter of 2021. And we're now around almost like 300 million people globally on 5G. There are around 557 different types of commercial 5G devices. So, we're really seeing that acceleration, the uptake, I think, despite the challenges of rolling out the networks, it's been huge. And if you take an example like South Korea, where they've had 5G deployed for a while, 53% of the cellular traffic is now on 5G, which is pretty incredible considering just the short amount of time that, that network's been operating.

And one of the subscribers has already reported that many of the subscribers now are using seven X times the type of VR/AR services that they were before. Over three and a half times the amount of video and three times more gaming type services as well. And I think it shows you that when you build those capabilities, that people will use those services and find ways to use those services. And I think that's what's really exciting about the first part of this year is seeing those boundaries being broken, the way the technology is being used and bringing those people closer together to use those services going forward in the future.

MH: It's funny that you mentioned the 25GPON, the ability to pump so much data down a passive optical network as that backbone. It sort of reminds me of the whole point of when you get a larger hard drive. All you're going to do is fill it to capacity, no matter how big the hard drive gets, you're always going to find something to put on it. And it seems very similar that as we now find ourselves in a situation where more and more of us are using 5G and the backbones, the pipelines to those devices are getting fatter and fatter and fatter. We're just going to come up with new ways to take advantage of all that bandwidth. And we're just going to keep following each other up the ladder to the next generation of technology with, as you point out, augmented reality, virtual reality, very intensive data demanding applications. Yet, at the same time we're now working on these technologies that make it a piece of cake.

JE: Yeah, absolutely. And I think, like we mentioned earlier with more and more people taking the hybrid approach to working that we've seen many companies come out with statements around hybrid working, Nokia being one of them actually. Just talking about the fact that they're offering the capability for our employees to work three days a week remotely. It's interesting to see how the changing of those working practices that many companies have been talking about in the first six months of the year will manifest themselves into the second half of the year and beyond in terms of the data capacity of the network. And that's why we talk about resiliency and flexibility as being really, really important going forward, because we really don't know with a 100% view of what those traffic patterns are going to look like.

And it's not a case of building back as we were before. We really do have to move forward and think about that level of flexibility and resiliency in the telecom infrastructure that we build. And particularly when it comes to enterprises as well. They've seen and been challenged by the impacted of their operations overall. And I think in the first six months of the year, you've seen quite a few announcements already about many enterprises looking to use private wireless and optical networks in their infrastructure to further digitalize their operations. And then we're going to see that continue to accelerate, I think, in the second half of the year as well.

MH: As you point out, we can't just build back more as we come out on the other side of COVID-19. What has the industry been doing to build resiliency into what it's doing? How does it build back better?

JE: There's a lot of increased complexity, I would say, to be able to do that. We've seen some announcements in the first half of the year that talked about different types of partnerships with other companies. And I think that's another key trend that we saw this year as well. So, you'll see the telecom infrastructure and service providers starting to work with the cloud providers, for example. So, like AWS, Google and Amazon. This is very important because we're going to see that there's no one single player at any point in time, being able to have a solution to everything that we need to do. And the fundamental premise that we do need to collaborate together and work together to see this throughout the industry, whether you're an infrastructure provider, whether you're providing application software, or hardware. The new platform economies that we're going to see and drive really do need this level of collaboration going forward.

And we have to build infrastructure to support those digital platform economies and different layers of the way we all work together, as well as new types of business models and the new ways of working and the different levels of partnerships that we have as well. It's not just about establishing a one-to-one partnership with one company and another partnership with another company, but we really are going to have to work together in a much larger pool to really build a true kind of ecosystem that people can draw from over a long period of time and work out, how do I partner with this particular company at this point in time to achieve this particular solution and this business benefit, and then work with the next one, and then the next one, and do that in a very agile way, rather than the traditional monolithic establishment single partnership approach. And you'll see that I think kind of that world that we live in now from a tech perspective, becoming ever more complex in terms of partnerships going forward.

MH: And that's something that's not exclusive to the digitalization efforts that we saw, not just in telecom, but also at the corporate level and enterprise level, because of COVID-19. Just the nature of 5G technology in, into itself requires the CSPs to be thinking differently about how they go about their business on a day-to-day basis. And those independent silos all have to be broken down to accommodate for working together. But as more companies digitalize, as more enterprises digitalize, what are some of their challenges that we need to look out for to help them along the way?

JE: It's a lot to do with, as you start to kind of digitalize your operations, there are new types of just, we mentioned earlier kind of like from a security perspective that, that's one aspect that you're going to have to address, because you start to connect more things to the network. You obviously have to think about that in terms of the threat surface as well, going forward. And then also in terms of the speed of your operations as well. So, thinking about the way that you scale and grow your business, as you start to digitalize the types of processes that you have over time, will also provide you a lot more options to grow your business. And for enterprises, it's really focused on safety, productivity and efficiency, particularly in the physical asset heavy industries. And that's what we've seen again towards the first half of the year.

A lot of these enterprises right now have been focused more kind of on the safety side of things and how they look at their internal processes, but going forward, they're going to be under pressure from a regulatory standpoint as well, to start looking at things like sustainability in terms of what do I need to do to meet my sustainability goals? From a regulation perspective, policy perspective, what do I do? Do I need to digitalize to actually be able to achieve those goals? And that's really going to drive a lot of change in digitalization I think as well. Is when you start to see those regulatory effects really come into play. And also just from a socioeconomic perspective as well.

I think there's a lot of people really kind of waking up to the fact that we really need to make a difference now. We have to act and work on these things together, and that they're going to kind of look at these very, very large companies and look at what efforts they're putting in to be able to contribute to that effort overall, to really create a fully sustainable environment that we feel is the right environment that we can continue to grow in with those correct sustainable practices. And making sure that we act together and really do this in a sensible, methodical approach going forward.

MH: So, then how do you see the need for companies to work together to achieve their business goals? What's your best advice when it comes to that?

JE: There are many ways. I mean, I think a lot of the times we think about this just purely from a technology perspective, but it all has to come together, not just from the technical capabilities, that's obviously a very, very key element, but your cultural processes and practice and working is very key to be able to ladder those together. And one of the things of having those principles of the way that you work together on the actual goals that you want to achieve is first and foremost, I think very, very important. And then you build the technology blocks around that, and you start to build the solutions to understand how you're going to be able to realize those goals and drive for them and look at the metrics around that. And that's one of the other things that we need to think about as well is how do we make sure that we're recording the right metrics and measuring those things as well over time?

That's one of the things that I think a lot of businesses and us as an industry really need to align on as well. Is making sure that we're all working towards the same goals in terms of those metrics. And in the second half of the year, as we start to talk about very important topics around sustainability and the fourth industrial revolution and digitalization and openness. Having those right goals and the frameworks and the policies in place that we all understand will help us drive us forward. And then we'll be able to understand kind of how we build those technology blocks to really make it happen in the future. But it's very, very important not just to start with the technology, but also have those key components and those working groups to make sure that we're all starting with the right baseline as well. That's very important.

MH: So, as we get towards the light at the end of the tunnel there on COVID-19 you have an opportunity at Nokia to work three days a week remotely. What about you? Are you looking forward to getting back into the office, or are you all settled in now and the dining room table is the place to be?

JE: That's a great question, Michael. I mean, I think everyone's adapted to a certain extent. And I have too. I used to travel quite extensively in my role. And I think I've adapted to kind of this new working environment, but it's like anything, I don't think it's all or nothing. I think you do have to have a hybrid approach. I do miss working directly with people and actually seeing customers and talking to customers directly. So, I think the hybrid approach is definitely the right way to go, having that balance of being able to do that. The technology's great. And I think as we go into the second half of this year, there's a lot more advances that are going to be coming in, especially as we look towards 2022 as well coming up. There's a huge convergence of the capabilities, the network and the devices that's going to start to come around.

But yeah, for me, I think I'll be taking the hybrid approach and there'll be some days in the office talking with employees my colleagues and also talking to customers as well. Obviously that's really kind of at the heart of what we do. And I really enjoy doing that. And then obviously being able to work from home and actually using all the great connectivity that we have in the world and all the tools to be able to do that. It's a great balanced approach, that hybrid world, I think, will be great going forward.

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