Ray Le Maistre, TelecomTV (00:10):
Hello, you are watching telecom TV and welcome to the DSP Leaders Council Industry Vision Report Debate. I'm Ray Le Maistre, editorial director at telecom tv, and I'm here to host today's program, which examines some of the findings published in our recent DSP Leaders Council Industry Vision Report. The DSP Leaders Council was formed late last year and is a visionary forum that brings together industry thought leaders, innovators and disruptors from the network operator, vendor enterprise and industry analyst community who've generously committed to sharing their insights and expertise by participating in our surveys and research and having formed the Council, which is about 80 strong currently and growing, we decided to conduct a survey to find out the councilor's views on some of the industry's hottest topics, and that resulted in the publication last month of the DSP Leaders Council Industry Vision Report, which is available for anyone to download from the telecom TV website.

(01:19):
And I'm delighted to say that I have several of our counselors joining me today to discuss some of the survey's. Results and on the program are Beth Cohen, SDN Network product strategy at Verizon Business Group. Diego Lopez, senior technology expert at Telefonica, and an Etsy fellow, Verna Schafer Vice President Sales and Marketing Group, general manager for network and communications sales group at Intel and Francis Hasum, principal analyst Apple Door Research. So welcome everybody. Good to see you all. We have some great topics and survey results to discuss today. So let's get stuck in now. Our first topic is service development strategies and we asked our counselors, should traditional infrastructure based digital or communication service providers, DSPs and CSPs, focus on connectivity services or seek to develop a broad range of digital services. Now here you can see the results are about two thirds of our counselors believe the development of a broad range of digital services is key. Francis, there appears to be a growing school of thought that telcos maybe should focus on connectivity services and leave digital services to others, but it seems our counselors don't agree with that view.

Francis Haysom, Appledore Research (02:54):
Well, honestly, I think the split here is actually a fairly representative of the conundrum for telco is that there's a desire to want to be A DSP. There's also I think a growing recognition that a lot of what makes a telco special is tied up in the sort of base capability to deliver connectivity activity. I think actually in a way, the 33% here is indicative of actually a growing realization that a lot of telcos will be focusing on. What I think five years ago would've been called the dumb pipe area of the solution. So I think five years ago everybody would want to be that sort of full service capability. Today, I think there's more of a recognition that many will take the way of delivering basically the connectivity and let's be honest, hopefully being good at that one. I think in terms of the 65% that want to be the DSP, it needs to be more than just, this is some sort of increment on top of the telco. I think telcos need, if they really want to be DSPs, they need to be making the investment decisions to become DSPs. They need to be making the partnerships with particularly an enterprise to become DSPs. And that's what I think finally decide what will ultimately in the industry where both will be potential futures for the company.

Ray Le Maistre, TelecomTV (04:38):
Yes, thanks Francis. Yeah, great points there. It's a real conundrum for a lot of the service providers. I think Verna, I mean, how do you see this developing? And the results are pretty clear from our counselors. They think the service providers should be going quite heavily into digital services, but there's clearly some that believe that they shouldn't.

Werner Schaefer, Intel Corporation (05:03):
Yeah, I think it's not an either or, right? There's probably an and in the middle there, but you do have to provide the state-of-the-art best possible connectivity. If we've seen the recent outages that we had in Australia and in the US here, that puts you back to basis, right? Without that connectivity, nothing's going to work and it's going to upset your customers. So if you want to play in these higher value more services, the connectivity absolutely has to be there and it has to be best in class and to adding to Francis's point right now, I think we're away from the dumb pipe to the intelligence pipe.

Ray Le Maistre, TelecomTV (05:42):
Okay, Verna, excellent. Yes, the intelligent pipe. Maybe that's a phrase we should be using more. Okay, so we dug a bit deeper in on this topic and asked our counselors should DSPs and CSPs focus new service development efforts on the enterprise services sector? And we asked this question because there's been a great deal of focus on how DSPs and CSPs need to improve their enterprise service offerings to get a better return on their investments, particularly in 5G. And it's clear the council believes the enterprise sector should indeed be the focus of the service providers r and d efforts, but does this make sense? Is this the way to go? I mean, the big chunk of customer bases and sales for the CSPs comes from the consumer segment, so enterprise, is that where the focus should be? Beth, let's come to you first.

Beth Cohen, Verizon Business (06:42):
Oh man, this is a tough question because it's always, there's trade-offs, right? The enterprise has traditionally been where the innovations come out of. So in that sense, r and D makes sense to put it into the enterprise and then swing it over to the consumer. That's the traditional path, but in recent years it has swung kind of the other way. I think it's swinging back toward the enterprise side is driving a lot of the innovation, particularly I know we're going to be talking about later, AI and intelligent networking that's being driven by the enterprise, much more so than the consumer SD wan, virtualized networking, the security pieces, security and networking integrated, that's all being driven out of the enterprise. So I think the enterprise definitely has the play, even though yes, that's not where we get the majority of our revenues, but a lot of the work that's happening in the enterprise and the r and d that's needed to support it will in fact go out to the consumers eventually.

Ray Le Maistre, TelecomTV (08:05):
Okay, yeah, great insights there Beth. Thanks very much, Francis. Do these results make sense to you? I mean, is the enterprise where the key focus, the key innovation should be happening in terms of service development?

Francis Haysom, Appledore Research (08:21):
I think it really reflects a certain part, which is if you think about the new technology 5G particularly, really the things like ultra reliable, low latency and the I OT aspects, they are fundamentally about enterprise. So actually in a sense, 75% recognizing that this important is a great result here, I put a caveat here that the question actually says R and D spending, and I think it's actually far more about the business model here than just simply r and d. It's going to be much more about exploring business models. The telco industry is very used to consumer, which is where it's selling actually in reality, some very, a small number of products to a lot of people, the enterprise area and is a completely different business model. It's selling capabilities into lots of use cases, lots of very different use cases and telco's, success or failure here will be about its ability to adapt to the business models of enterprise, not simply one of just technology.

Ray Le Maistre, TelecomTV (09:29):
Yeah, absolutely. And it's adapting to those use cases. That's proved a pretty tough task in the past few decades. Now, here's a big bone of contention and one of our more surprising results. We ask the counselors, do DSPs and CSPs need a broader ecosystem of vendors to meet their needs? Well, as you can see from the results graphic, the answer was an overwhelming yes. Verna, let's come to you first. What does this response from our counselors suggest to you?

Werner Schaefer, Intel Corporation (10:09):
Well, as you know, Intel is big and ecosystem, building ecosystem for many, many years. I think one of our key tenants actually that we bring to this industry and to other industries, the broad ecosystem that we can surround on industries, I think it is not necessarily maybe a question about it being bigger per se, but maybe utilizing it more, giving more access to the ecosystem, to, we will talk about procurement in a moment, but also about innovation and technology access into the operators and into that, let's say the core of what the operators want to accomplish. And with the need now of bringing in a broader set of players as everything gets more complex and it's not the one box, one shoulder to pad when things go right or wrong, that's now where you need more active players within what you want to accomplish as an operator. And I think that's probably where the real key is that you need to bring a group of like-minded companies together that helps you solve your problem.

Ray Le Maistre, TelecomTV (11:26):
Okay, yeah, interesting. I can see where you are coming from in terms of some of these collaborations we're seeing with smaller, more IT focused companies in particular. But Beth, I understand you were a little bit surprised by this result. Is that right?

Beth Cohen, Verizon Business (11:46):
I was, and I have been kind of on the forefront of this, and I'll use as an example, the sd-wan product evolution, if you will. So sd-wan came out of, there was probably 10 or 15 early startups that were involved with sd-wan. I think there's one independent left that's versa. Everybody else has either gone out of business or been bought up by somebody. So that is the natural progression. However, that puts us in a bind. So we got into early, we were one of the first service providers to provide an SD-WAN solution. We got into it probably a little early, and so we were working with startups, telcos, traditionally, telcos do not do well with startups because as the saying goes, we eat them for lunch and startups have a hard time working with the giant companies, and I know we're going to be talking about procurement process and introducing technology and our needs to be highly available.

(13:04):
100% dial tone has to work all the time with the startup mentality of, Hey, we'll ship it and cross our fingers. So that's a struggle, but there's no doubt in my mind that we need a broader ecosystem. We need to encourage these startups, and I don't know what the current status is, but a couple years ago, the investment was leery of investing in startups that we're going with telcos. So right now I think they're mostly investing in AI technology startups and not so much with networking and the telco space. And that's a shame because there's a lot of opportunity here, and I think we as telcos do need to get better at working with these smaller companies.

Ray Le Maistre, TelecomTV (14:07):
Yeah, it's a real conundrum, isn't it, wanting to deal with more innovators, but then hard for them to work with the companies they want to work with. Diego, do you think that this is perhaps a little bit of a wishful thinking on the part of our council? Yes, it'd be greater to have a bigger menu to choose from, but at the end of the day, you might always go for your favorites and not look at the additional options.

Diego R. Lopez, Telefónica and ETSI (14:39):
Well, I believe that this is for sure that there is a little bit of thinking. Having a wider menu, even if you always choose the same dishes, is something that is always appealing, but the belief that there is some issues that are important when it comes, we keep talking about the broader ecosystem and probably we should be thinking as well about the deeper ecosystem. Bernard mentioned this idea of the intelligent pipes. Francis mentioned this idea that in the enterprise environment you need to address the business needs of the enterprises, et cetera. I believe that playing with other players, not necessarily the ones that are providing, let's say the usual tools or the useful technologies, but trying to play the game of integrating, making more collaborative. We're not talking only about vendors, we're talking about how we can collaborate to create new services and create new revenues, et cetera. Probably going in that direction would be interesting, not only considering just what you simply put in the pipe to happen, but precisely this smartness that you need in the pipe to make it smart.

Ray Le Maistre, TelecomTV (15:57):
Yeah, absolutely. I mean, why not think of an application developer as an extension, a new application developer as an extension of the vendor ecosystem. Francis, this debate has been raging for years. I mean, it cropped up at the beginning of network functions, virtualization as well. When there seem to be a lot of new prospects, and now we're seeing it again with cloud native and AI and network APIs and of course disaggregation. Do you think that we will see a broader mix of companies playing a role in telecom?

Francis Haysom, Appledore Research (16:39):
I think this is quite highly related to the previous question about what do telcos want to be. Actually, I think a lot of this is about if you want to be mature connectivity businesses. If you look at what other mature businesses like I'll take aircraft and jet engines for example. They don't have huge ecosystems of suppliers. They actually have one or two in many cases, three potentially in jet engines. So I think if it's a mature business, it's not a highly innovative business or it's an innovative business in aggregate rather than specifically between say airlines, et cetera, then I think actually the model we're increasingly going to, which is large, strong suppliers, is the right one. If you want to be getting into the enterprise business, you want to be differentiating what you are doing. You want to be working more closely with say, automotive applications or choose your favorite industry here.

(17:47):
That's where the key need for a broader ecosystem is. And also the key need in which we're going to talk about disaggregation or the survey talks about disaggregation. That's where the disaggregation helps because disaggregation is your means to insert things into the business, which might not just simply buy the base connectivity solution. So I think it is talking to the ambition of telcos, if you want to be a DSP, you want to be engaging with enterprises, you're going to need a bigger ecosystem and you're going to need to nurture that ecosystem. To use a slightly different thing from Beth, my comment is telco is where startups go to die. It's the comment that is quite frequently made, and that's something that Telco needs to address if it wants to be this DSP of the future.

Ray Le Maistre, TelecomTV (18:39):
Okay, thanks Francis. And Beth, I think you wanted to come back in with some additional comment there.

Beth Cohen, Verizon Business (18:46):
I did indeed. The problem with telcos is we are engineering companies fundamentally at the end of the day, and we have to have to be on the leading edge of engineering, and we cannot, cannot rely, unlike the airline industry, which you don't want airplanes falling out of the sky, hello Boeing. We have to work with the big vendors, the traditional telco vendors. At the same time, we have to work with the startups. I know Verizon has a whole group that does nothing but look at startups and invest in startups. And so we try to walk that fine line where we're using tried and true technology, but also inserting new technology at the same time. And I wouldn't say that it's easy, but I think it's important and it's critical for our success in the future.

Ray Le Maistre, TelecomTV (19:55):
Okay. And Verna, did you want to come in with an additional comment as well?

Werner Schaefer, Intel Corporation (20:00):
Yeah, just a thought there to share on that. Startups is probably its own breed to think about, but there's existing companies out there, especially when you talk about how it and telecommunication has merged over the years. Now they're well established companies, big companies, and they still don't really play a role that they could play in the industry because we are somewhat narrow in whom we're working with. So I think there is a good chance to even make more use of the hundreds of companies that are already in the ecosystem. We've got about, I think 600 in the network builders ecosystem at Intel, and I'm sure there's not any operator out there that's going to make full use of what we already have, not to mention the innovative startups.

Ray Le Maistre, TelecomTV (20:45):
Yeah, no, all great points. I mean, it's a real fine line for the telcos to tread and to find the right model and the right way to engage. Now of course, the council believes that a broader range of suppliers would be beneficial, but what about the way in which network operators acquire their suppliers goods and services? Can new or emerging potential suppliers even get a foot in the door of their prospective telecom customers? It's a thorny topic. So we asked the council are DSP and CSP procurement practices suppressing telecom sector innovation and making it more difficult for potential new suppliers to win business with the DSPs and CSPs now in the view of the council current procurement processes aren't helping. Is that fair, do you think, Beth?

Beth Cohen, Verizon Business (21:48):
I think that's a fair statement. Part of my job is working with vendors and I'll have to say Verizon's gotten better at it. I mean, it used to be literally we do the initial negotiation and then we hand it over to this bureaucracy I'll say that handled the actual contract negotiation, which was very awkward. We have streamlined it so that we do do it faster, but particularly getting back to the earlier conversation about startups, when I talk to startups a lot and we will bring up, Hey, we need you to sign an NDA before we're going to have any additional conversations. And sometimes they'll blk and I'm like, you know what? We're Verizon. Just sign it. And sometimes they'll be concerned, oh, well you're going to steal our technology. I'm like, dude, if we wanted to steal your technology, we wouldn't even be talking to you. Just sign and move on. We're not a software company. We buy that stuff and we're a services company, so just get over it.

Ray Le Maistre, TelecomTV (23:14):
Okay, thanks. Beth. Verna, I mean, is this something you hear about a lot, about the way in which companies maybe struggle to engage with Telco customers?

Werner Schaefer, Intel Corporation (23:27):
Yeah, I think it's a real challenge for both sides because we're traditionally in the procurement process. You had probably a handful of vendors that you were talking about, particularly when we talk about the network itself in the ran. Now, if you think about O Ran, V ran conversations, all of a sudden there's a much broader set of companies that you want to deal with, and that is new for the procurement organizations as well, and that's what doesn't necessarily fit in their normal mold. And similarly, it's also not necessarily what these newer players are used to in dealing kind of like what Beth just described with large organizations like the operators are. So there's probably got to be a little bit more understanding on each side for each other in there. And on the other hand, also maybe a real realization on the operator side, what do they want to accomplish there?

(24:25):
When you think about some of the RFPs that we're seeing right now that are out there for open networks, including the new cloud native works that can brought in there, how do you really want to accomplish the future view when you only look at the existing TCO? What do I get now out of what the vendor's giving to me? How do I actually quantify things like future energy savings, future flexibilities, right? The good stuff that comes out of the innovation that the customers bring and how do you have that immersed into your procurement process? So I think we're all learning and learning with each other, and that's probably an area where the communication conversation, sharing information will be helpful for both sides.

Ray Le Maistre, TelecomTV (25:17):
Yeah, it really is a case of learning for all parties. Francis, you have worked on the supply side and you speak to a lot of companies large and small that go through this process. What's your view on the procurement process? Is it something that needs to be fixed and can it be fixed?

Francis Haysom, Appledore Research (25:42):
I think it's actually a little bit easy to blame procurement. In essence, the survey says we do blame procurement for the problem kind of, well, we would've selected you, but that they wouldn't. In my background as a supplier, very earlier in creative system, there was a market development book called Crossing the Chasm, which talked about a chasm that needs to be left across for market development. And I think we have a similar issue in terms of what I would term is proof of concept ideas, ideation in the company where open ran is a classic case where we've done of companies have done large scale projects with lots of the innovators, and then there's a kind of chasm between that and the major part of the business. And I think the procurement problem is, I think a secondary, I think it's our ability to describe, and Vener hinted at it, it's our ability to describe the benefits of this new stuff in a way that a hard bitten procurement guy is going to understand is going to put into the KPIs.

(26:57):
And I think if we're to overcome this problem, the industry needs to raise its game in terms of being able to describe not just technological benefits, but the business benefits that will come to the business. I'll leave you with a sort of vignette from my time as a supplier. One procurement guy once said to us, he said, but literally all projects fail in my company. My business is about making 'em fail for the cheapest price. And I think if we can understand what is it we're just trying to describe to procurement that actually makes a difference to the business and making that very clear upfront that's going to solve a lot of these problems not simply blaming procurement.

Ray Le Maistre, TelecomTV (27:40):
Well, it's no wonder you got out of the supply side then if you were getting messages like that. But Diego, I know this is a topic that you've been looking at and thinking about for quite some time. Is there a way to make this easier and better for all parties?

Diego R. Lopez, Telefónica and ETSI (28:04):
I believe that this is something that we're suffering in many other aspects when we're talking about the telco sectors about that. We love standards, we love, and I believe that in many cases we love what they would call over standardization. My impression is that we have a procurement processes that have a deep logic and they're very much sustained by experience and the requirements for a critical infrastructure that has to be available 24 7, et cetera. But we tend to apply them these heavy procurement and processes to everything that we do and every kind of technology that we are thinking to acquire and deploy, deploy. And probably what we need would be some kind of diversity in the processes and well probably well to return to a little bit of distributed approach when we're talking about how decisions are taking with or with products that are not so critical and not part of the core business, but are equally important because they're addressing a particular market niche or they're going to provide relevant service to a particular business sector. And I believe that being more agile there, letting the people in charge of the definition and explanation of the services to take both steps if they're required, something that would be important. Again, it's more about allowing a certain degree of diversity or additional degrees of freedom for depending on the kind of acquisition or procurement we're doing.

Ray Le Maistre, TelecomTV (30:04):
Okay. Yeah, no, that's great points there to have maybe a more diverse approach to this than currently exists. Well, we couldn't have an industry survey these days without tackling green network issues. So as part of our survey with the council, we asked how important is sustainability including energy efficiency to your customers? So this is clearly important, but as our results show, the majority believe it is quite important. While 44% believe it is of the utmost importance, sustainability really matters. So I do wonder if we'd ask this question of the industry five years ago, what kind of results we might've got, but clearly this is very high on agendas these days, Verna, how do you regard these results? Are you surprised? I mean we did have a few people respond to say that it wasn't important to their customers at all. Was that a surprise that anybody would give that answer?

Werner Schaefer, Intel Corporation (31:23):
It is a surprise to me because every conversation we have with operators is having that as one of the first topics they address right now. And I believe, if I recall correctly, the survey, it is actually the top rating concern that came out of the survey in general to say, we need to address this. And we're doing a lot of work there right now around power management and it's probably, it is surface faced obviously so strongly over the last couple of years just simply with the increase of the energy costs, right? It hit the operators with unforeseen unprecedented spikes in what they have to come up with now to operate their network. So there is a clear business desire to lower consumption and it's not just for green, obviously we all want to do that. You all have our ESG goals, but it does impact the bottom line and we have to work on that.

(32:23):
And it's not just about innovation, about new stuff. We can't just come to the customers and say, Hey, our new products will be more energy efficient. No, we have to look at what's the installed base, and that's where we actually really focus on, we can help operators lower their energy costs 20, 30% in existing brownfield installments. And that's where we are focusing on, and that's what we're hearing is the number one piece for the operators when it comes to operating their networks right now. But it goes beyond that because green is not just in the way you operate, it's also in the way you procure. So it's not enough to say, Hey, the box I'm buying is green and it's done nicely. No companies go down to the component level. They want to know if the processors that we manufacture are there manufactured in an environment that actually is not causing harm to the earth, to the environment. And that's very important when you think about your supply chain in general. We hear that equally from the customers and from our partners.

Ray Le Maistre, TelecomTV (33:27):
Yeah, no, absolutely. It goes very deep these days and France is, how do you see this playing out in the industry? Do you feel that as time goes on, that this focus on energy efficiency and sustainability might even become a more important that we might see in a much higher percentage saying it's absolutely critical for their customers?

Francis Haysom, Appledore Research (33:57):
Ray, I'll start with I was very gratified that it was considered by important by almost everybody. I'd like to actually be slightly more of the off from a personal point of view. I'd like to more to be on the utmost importance, but I think we've got to be fair here. I think one of the problems that came up in Mobile World Congress in fact was that in fact actually last year was the year of energy efficiency. This year you wouldn't know it was there admittedly under an ai, a tsunami of AI there. So I do worry that we've kind of, I guess taken easy, the low hanging fruit in terms of energy consumption, better silicon, better hardware, energy arbitrage is a big opportunity here, green generation as part of the kit, but a lot of the really nuanced ability to improve are going to require some fundamental operational changes to the way the business works. If we want things like ran breathing, et cetera, we've got to have the confidence to be able to and turn on and turn off and have the confidence that it will come back up rather than the kind of semis static way, which we tend to run networks at the moment. So I think it is great that we've got the impetus here. It is a great boost to make sure that we keep up the efforts here, but I was slightly worried that it was quite so absent from then Mobile World Congress.

Ray Le Maistre, TelecomTV (35:41):
Yeah, you had to look much more closely this year. Absolutely. The green and sustainability messaging, if it was there was very often behind the AI messaging and the flying taxis and so on so forth. Beth, in terms of from the service provider perspective, do you see the emphasis on sustainability becoming greater, a greater demand on the service providers to deliver this to your customers?

Beth Cohen, Verizon Business (36:18):
Well, I'd like to separate into two answers because yes, sustainability is very important to Verizon. It's very important to the telecoms. It's obviously good for the earth, but it's also cost savings. So green energy is very important and sustainability is very important. However, I'm not seeing it in the RFPs for example. I'm not seeing it as our customers are not particularly asking for it. So that I was mean, yes, it's absolutely important to us. I was a little surprised that the responses were that our customers were actually interested. I suspect that may be coming from that The customers are just assuming that we're just doing it and there's not a whole lot that the customers can do to drive additional efficiencies and sustainability beyond what we're already doing. So I don't know, customers aren't putting it in their RFPs.

Ray Le Maistre, TelecomTV (37:34):
Okay, interesting. I'm sure it's probably there in the background, but maybe not top of mind for some of those customers, but what we plan to do here is to come back and get a year on year changes and see how things develop. So it'll be interesting to look back at this again next year. Well, we also checked in with our counselors about cloud platform choices and we asked should telcos build their own distributed private cloud platforms? Now, the split here is interesting. The majority feel that network operators need to have their own private cloud while a third believes that the public cloud platforms can give them what they need. Beth, what's your view here? Are you surprised by this? The high level of respondents in our survey who believe that it is pretty critical for the network operators to have a private cloud platform,

Beth Cohen, Verizon Business (38:43):
I would've expected the answer to be even higher. I'm surprised that one third of the telcos are saying that public cloud is good enough, private, ironically, somebody else just asked me this and I actually wrote a little response. Public cloud is in certain places, it's in the United States, it's in what's called the NFL cities. So it's in the large cities. And if you look at where it is globally, again, it tends to be in the large cities. Telcos are not servicing just the large cities. Telcos are servicing a more distributed network. So I firmly believe that for the most part, it makes sense for us to build and maintain our own private cloud. We've already done it for the most part, and it's not like we're going to have huge cost savings to switch over to the public cloud. If we did, we probably would consider it, but the public cloud is not built for the telco workloads and the telco workloads. So when we're building private clouds, we're building them specifically for our workloads. And I know Diego mentioned a little bit about, sorry, spin up and spin down, but the reality is most of our workloads are pretty steady, and so we have to build our clouds to address that and address the type of track. It's all about network traffic. It's not a whole lot about processing. So yeah, it makes perfect sense for the telcos to continue to manage their own private clouds.

Ray Le Maistre, TelecomTV (40:38):
Francis, in the conversations you have in the industry, were you surprised as well that maybe the figure wasn't higher as well?

Francis Haysom, Appledore Research (40:48):
I think the problem with the word private cloud, there's actually three things bound up in this. There are three private clouds and we kind of need to separate out which ones. There's the private cloud that will support the network itself, be it a cloud ran or a cloud core. And Beth is absolutely perfect right there. A lot of telco's, networks at the moment are very, very known loads, et cetera, and it is a very clear benefit to those to actually own that infrastructure and to maximize its usage for the way you want to load it. There's a whole series of where doing business administration systems that could very easily go onto public cloud are in fact going onto the public cloud. So in many cases, a lot of them don't need to be on the private cloud and are starting to make the way to the public cloud.

(41:49):
And the third area I think is it comes back to the innovation story. There's a whole load of private clouds out there that are the enterprises private clouds. They're the business opportunity for the telco to develop that one. Now, it could size its own private cloud, deploy that opportunity, or it could leverage the public cloud or public cloud outposts in terms of delivering that capability. And I think we need to understand three very different things. If you want to do the innovation, public cloud gives you a great huge opportunity here because it allows you to scale up. It allows you to scale down without you having had investment in terms of the capital, in terms of the network. If you've got a very static network that isn't changing a lot, you're not introducing a lot of services. Again, private cloud, let's call private cloud. What it really is, it's, it's your classic, you're owning your own infrastructure, your own network devices. I think we overplay what the word private cloud means. There's a whole series of technical capabilities, but it's basically owning your own infrastructure. And if you're very certain what it is and you don't have scale, upscale up, scale down, great healing opportunities, you're not usually using cloud healing for example, then probably build it yourself and own it.

Ray Le Maistre, TelecomTV (43:17):
Okay, thanks Francis. And Diego, from the Telefonica perspective, is this quite a clear case for telcos needing to run their own cloud infrastructure for all sorts of reasons? I mean, apart from controlling the processes, security very often gets mentioned here in the mix of this.

Diego R. Lopez, Telefónica and ETSI (43:41):
Well, I would say that the real important thing is not to go private or public. It's about we had to live with the fact that we'll be running hybrid clouds for, well, let's say forever. Why not? I mean, there are cases, as Beth was mentioning, that we have a much stronger distribution requirements for being distributed and we had to cover wide area. And this is something that I have insisted very much when talking about virtualization, cloudification, et cetera, that one of the properties of the network is that it's not only that we have topology, geometry cetera are made. When you have to respect the geometry, you have to run your own infrastructure. It's an infrastructure is tailored to your needs. On the other hand, it's true that in many cases there are very good business reasons to offload part of the work of the work that you need to do around the network or related to maintaining and operating the network and to upload it to a common infrastructure that can be reused for different purposes.

(45:03):
So at the end, I believe that the important thing is how we manage to build those hybrid clouds cloud, how we can manage to adapt it to the different situations that you can find in day by day operation. And there are things that are quite static that's true, and that probably will be candidates for private clouds. But again, if we move to these smart pipes, part of this smartness should be in an environment that is not localized in our on-premises, totally under our control, but we need mechanisms for making cating these different infrastructures in a secure and dependable way. So I believe that the real challenge is in building this hybrid and agile cloud that we'll need in the well we already need and we'll need in the future.

Ray Le Maistre, TelecomTV (46:02):
Okay. Yeah, absolutely. And of course doing that in an intelligent way, it's this intelligence we keep coming back to in many cases here. And of course, we couldn't really conduct this survey without asking about artificial intelligence, the topic du jour. So we asked our counselors, will the impact and use of AI systems result in a seismic shift in the way that DSPs and CSPs operate over the next five years? So the response was very clear as 79% of our counselors responded in the affirmative. But how surprising is it that 13% didn't think that AI would have a major impact on service provider operations in the next five years? I mean, Vern, I guess with this question, we were really looking at the crystal ball here, looking at the future, counting on the great amount of discussion and insight there is into the use of AI at the moment, but there seems to be that the prevailing opinion is this is going to change quite a lot for the operators. What's your view here? Do you think this is going to have a massive impact in the next five years?

Werner Schaefer, Intel Corporation (47:22):
I do believe it will. And I think those smaller percentages that weren't quite sure said no, it's maybe the word seismic that puts them off. But there's no doubt that I think artificial intelligence is going to have a significant impact and it goes from everything that the operators will touch. It's from the customer services side of the house all the way down to how you manage your network. When we speak with customers, it's very, very clear that they're looking at how do we utilize this technology and not just in the future, how do we use it today? What is available today to optimize our network, to harness all the information that comes, the data that comes of out of the networks and make it make sense for us in being able to manage it in a more optimized, more power efficient, more cost efficient way.

(48:15):
Those are all areas where we already hear that that is in the here and now. This is not out two, three years from now that want to use that. And the good news is it is available, right? We can certainly run a lot of artificial intelligence workloads on standard CPUs. It doesn't all have to be A GPU. And equally there's also a broader ecosystem out there, and it's not just one company that should play in this space. And that's also what we're hearing from the customers. They want to learn, they want to hear how can they utilize it all across the industry and not just in this industry. We also hear it from other industries as well. So absolutely, it'll have a big impact.

Ray Le Maistre, TelecomTV (48:57):
Yeah, absolutely. And the use of the word seismic was very deliberate, as was the term AI rather than generative ai. I mean, this is bigger than just the gen ai, but of course everybody's pretty excited about the potential that not everybody really knows where gen AI might fit in. And a lot of the operators I spoke to at MWC are very keen to hear about the use cases and not so much the technology. They want to hear about the use cases. I mean, Diego taking AI in general in five years is a pretty long time now. Things are moving so fast. Do you expect that artificial intelligence in all its forms, gen, ai, different machine learning tools and capabilities, is this going to make a massive difference to the way that network operators and service providers are going to be running their day-to-day operations?

Diego R. Lopez, Telefónica and ETSI (49:56):
I believe so. I think it's something that's a disruptive tool. It's a tool. I mean, we should not think that it's going to be something that is going to change the kind of services providing or business goals that we normally satisfy, but it's extremely important tool that will change many of the mechanisms that we're using right now. Think about is going to be something as disruptive as probably well think about databases, something that could, I mean probably in the sixties or so, it was the possibility of having all the information about your customers and your infrastructure, et cetera, centralized enabled to be queried and managed. Manipulated. The situation is somehow the same. I mean, did you have a way in which you can make things behave according to general instructions and not so much detailed instructions? When you think about the ai, AI has very much to do with telling what you want, talking about something that has become very popular, the recent times that intent.

(51:14):
What is your intention? What is you want? And not necessarily what's the steps to achieve this? And you can train, but at the end you are programming as well. But instead of programming with step-by-step, the different actions your corporate programming with data. So it's going to change very much because change very much the way in which you operate because it'll define a new way of how we express our goals, how we define our procedures, and how we can expose to third parties in general to customers or to even other elements in their smart pipe ecosystem.

(51:56):
The way of interacting with the network. And this has another important implication that is that data that is related to how the network behaves, how the network is performing is going to become more and more crucial. And how we move those data around how we make them available today, it's how we enable or disable access to certain sets and data sets, et cetera, is going to become crucial. And then we will become companies that are very much concerned about moving someone else's data from one part to the other because that's basically connectivity and concerned about how we move data about ourselves inside just to allow a much more evolved way of managing the network.

Ray Le Maistre, TelecomTV (52:53):
Yeah, lots of different ways to think about this. It's such an interesting, exciting topic and no wonder it dominated a lot of the discussions and the marketing of course at Mobile World Congress. Beth, do you think maybe the industry and our council is perhaps getting a little bit overexcited about the potential impact of AI in the next few years or can you already seeing it starting to manifest within Verizon?

Beth Cohen, Verizon Business (53:27):
Both. We're definitely using it. We're using it particularly on the operational side of things, on the more tried and true aspects of AI that have been around for a while. The large language models, the chatbots, those types of things, those have been around for a few years and I think they've been quite successfully implemented into our systems. What's kind of far out and not really there yet is the intelligent network. Everybody, you're absolutely right, everybody's got the, Hey, we've added AI into our systems. I was just talking to a company that does CICD oh, like oh, we have ai. I am like, okay. And I'm working on a project right now in the Linux Foundation networking that's involved in that. And we don't even have the data sets yet standardized. So how can we do intelligent networking with any reasonable sense that we have something that's working five years down the road? That's a different answer, but we're working on it furiously. So there you go.

Ray Le Maistre, TelecomTV (54:53):
No, there's a lot of resource and effort being put into this in the network operator community around the world. That much is clear. And Francis, from the companies you talked to, do you feel a buzz, a real excitement, a real sort of game changing aspect around how operations might change within the service providers within the next few years because of the use of different AI tools?

Francis Haysom, Appledore Research (55:24):
Yeah, I think I come back to my mobile World Congress experience. Honestly, the number here seems low compared to Mobile World Congress. There's definitely a feeling a hundred percent that AI is going to make a difference to the operator there. I think it's important actually to recognize AI is a tool. It's a tool that can help operations, but actually the fundamental seismic shift that AI could help with requires a seismic shift in the way that we look and operate the network itself. It's not simply apply a tool to what we do at the moment and mechanize it slightly better. In fact, Rakuten held a seminar on AI where they were looking at the use cases that are currently within operations within telcos, and they identified generally across the panel that about 95% of them aren't really ai. They're kind of like very, very strong analytics applications really.

(56:29):
So I think if you look at other areas where AI has been applied to some extent, it's not just simply applying it to what we do at the moment, but actually looking at and Diego go, mentioned it about it, it's going to be a lot more about driving our behavior, operational behavior by the intent of what somebody wants rather than the way we currently technically implement it. And the second thing is it's going to be about trust. We have to build into the operations the ability to trust the thing that AI determines and actions. And I think I call out two things that I saw here, which I think are very positive, is this idea of much more of a co-pilot idea for AI in the operational network. The copilot aiding a human being in making a better way in which they make decisions in the network and building that trust. And there were a number of areas. I had a long interview with Rakuten Symphony in this area in Rahul Ri who's been on a lot on telecom TV and these sort of things about this idea of a copilot, this ability to change the operations, but AI is a tool to do that, not a magic wand on it.

Ray Le Maistre, TelecomTV (57:49):
Yes, we've heard over the years about plenty of magic wands and we need to steer clear of that and stick to reality and Mobile world Congress isn't always the place to have a real sort of clear picture of the reality. Well, that was a great discussion. We covered so much ground, but we must leave it there for now. Thank you all for taking part in our discussion. And remember, if you want to see the full set of results, then please download the report from the telecom TV website. You can find it quite naturally in our reports section and it's free and you can't ask for much more than that. For now though, thank you for watching and goodbye.