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Why ‘Digital Transformation’ for Telcos Means Stack Simplification

Why ‘Digital Transformation’ for Telcos Means Stack Simplification

May 28, 2021

5G promises a brave new world of connectivity. Be it life-saving remote surgery, immersive learning, intelligent fraud detection, or predictive resource conservation, everything is possible. This is because the new generation of superfast ultra-reliable millisecond-latency networks make it possible.

The most impactful technologies of today and tomorrow—the Internet of Things, big data, machine learning, virtual reality, and augmented reality—rely on 5G’s 1000x increase in data throughput and broadband-like mobile service to deliver innovation.

Enterprises were the first to recognize the potential of 5G. Every vertical—be it healthcare, transportation, industry, or retail—has a viable 5G use case. Wearable devices, telemedicine, virtual learning, 4k streaming entertainment, and social shopping are among the first 5G-powered applications to catch the consumers’ fancy. These (and many, many more use cases) represent major opportunities for monetization of 5G investments.

They also herald a new age of “in the moment” intelligence that requires complex data-driven decision-making at unprecedented speed, scale, and precision. Enterprise tech stacks are struggling to meet these demands. The proliferation of IoT-based devices and an increasingly distributed and demanding customer base are only making things harder.

For telcos and communications service providers (CSPs), this is as much an opportunity as a challenge. 5G gives them the ability to evolve from mere connectivity providers to enablers of innovative services and creators of new opportunities. It’s a chance to extract more value from the network, create new services, and establish new markets that extend beyond communications.

But to make this leap, telcos will need to radically transform how they do business and how they architect their stacks to support modern applications. In the end, the most powerful tool for telco digital transformation is technology stack simplification.

Stack simplification and transformation

Telcos can’t deliver the promise of 5G on infrastructure that was built for undemading purposes using a patchwork of disparate legacy technology. CSPs need a unified platform that can address the entire data lifecycle in one quick, seamless motion. This modern platform replaces a variety of technologies such as an ingestion layer, a storage layer, a processing layer and a ruleset manager that used to be cobbled together in a multi-layer architecture.

Multi-layer stacks inevitably introduce internal latency that acts as a drag on the speed and performance of an application. To reduce latency and improve response time, we need to get rid of excess stack layers and build a unified platform that supports advanced AI-powered tools and distributed computing.

Monetizing 5G

MarketsandMarkets expects the global 5G Services market to grow to USD 249.2 billion by 2026 (from USD 53 billion in 2020).

Capturing this value requires a fundamental shift away from the traditional telco model. It requires greater openness and simplification—of technology platforms and APIs—as well as the ways in which customer and partner relationships are managed. It requires the willingness and ability to share control through things like network slicing and built-for-5G stacks.

It also requires future-ready business support systems (BSS). This digital BSS infrastructure is  equipped with sophisticated data processing and decisioning abilities that trigger hyper-personalized “in-the-moment” offers and handle complexity in policy controls and charging in real-time.

Driving stack agility

Typically, modern applications are multi-cloud deployments (on-premise, public, and private) that utilize myriad hybrid services. This adds complexity and latency by increasing network traffic, adding data hops and mandating more round trips to complete a transaction.

It is possible to drive speed and agility by leveraging microservices, digital twins, and edge computing.

Microservices allow us to break down complex activities into smaller, more flexible and targeted tasks. Microservices can be deployed independently and may run non-sequentially, thus allowing a transaction to be completed faster. This improves both granularity and performance.

Digital twins are virtual replicas of physical entities. Using deep learning and AI, it is possible to create digital twins of customers, simulate their behavior, and predict their actions. This improves response time and reduces latency.

Edge computing has the potential of blurring the lines between the device, the network edge and the datacenter or core. Keeping storage and compute capabilities as close to the device or “decision location” as possible enables faster processing, decisioning and actioning. This can deliver a massive surge in speed and performance for telcos.

Conquering latency

Accuracy, speed, and scale dictate the quality of service and the subscriber experience. For a delightful user experience, telcos need to conquer latency. Latency is defined as the delay between a user’s action and an application’s response to that action.

Now, the problem with latency is that it adds up. Most transactions require a series of related sub-tasks to be carried out. Let’s consider one of the simplest (and among the most common) tasks in the telco system—recharging a prepaid phone card. For every single recharge event, the charging system needs to check available credits, determine if activation, maintenance or other fees are to be applied, add new credits and update the balance, change account status to “recharged”, assign a new expiration date, etc. Each of these data checks/changes adds latency to the transaction. So, even if we were to budget a 1 millisecond latency for each sub-task, we could easily be out of pocket.

If we’re to successfully operate in a low-latency 5G universe, we need to start with the available latency budget and then figure out how to meet our business needs within it. We need to be mindful of factors like distance from required services, number of hops and round trips required,  internal stack layers, etc. that slow down decision-making in a multitude of telco scenarios. Having multiple technologies in play only adds to the problem as latency tends to add up.

Many of the current tech stacks are built for the very limited speed and latency of previous generations of networks. 5G demands a much higher level of performance in speed and response time. To beat latency, we recommend a high-throughput data platform working in tandem with an agile and simplified tech stack.

Enabling true “real time”

A common thread across many use cases—and, in my book, the most intriguing promise of 5G—is “real-time” experiences. Be it guiding a robotic probe, unlocking a smart door, or slaying an opponent in virtual gameplay; success depends on real-time data processing and decision-making at the back-end.

So, what is “real time” in a 5G world?

5G time is not measured in seconds. It is measured in milliseconds, i.e. 1/1000th part of a second. Real time is when an event is completed in about 250 milliseconds, with a 10-millisecond window for making decisions and acting on them.  An event is any action that triggers data transfers or initiates changes that need to be reflected in a database. Placing an online bid, adding credit to a prepaid card, and sending a text message are all examples of events.

Real-time events are opportunities to monetize 5G by leveraging real-time insights. This can take the form of targeted advertising, pushing upsells, or offering special price deals (among other things). However, real-time insights lose their value if decisions and actions are not taken “in-event”or within the 10 millisecond window that 5G latency demands.

Let’s continue with our basic prepaid card recharging example. When a subscriber initiates a recharge, there is a millisecond window to analyze data streams and recommend a higher value recharge in return for a valuable reward, say a free trial of a popular game. To make a tempting offer, we need to have and analyze data about their usage patterns and other big data information like what games are popular in their region.

Under the hood, this means a blazing fast data platform that can apply sophisticated transactional rules to high velocity data streams to make and act upon a decision in under 10 milliseconds. If you miss this window, you’ve not only lost potential revenue, but also an opportunity to delight a subscriber and build loyalty.

In a world in which all industries want to reap the potentials of 5G connectivity and potency, stack simplification is a necessary and rewarding priority for high-performing telcos.

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