In what is becoming a regular discussion, the Disruptive.Asia team caught up with Openet CEO Niall Norton to get his take on what lies ahead, the importance of open source and what he thinks MWC 2018 will bring.
Disruptive.Asia: Before we get to the MWC bits, I have to start by saying it was quite, well, punchy of you sending the open letter to the industry saying that we need to think again and that the vendor/operator model is broken.
Niall Norton: Actually, we are really enjoying the afterglow of that, mainly because we have been able to follow it up with announcements that bear out the veracity of the challenge we laid down. In some ways it was a pity we waited so long. Here we are post-4G, with no massive changes, but 4G doesn’t lend itself to the IoT in any sensible way. And 5G, which does, is going to be really expensive, and there are no handsets. So, frankly, it needed doing.
The industry is continuing with the journey with SDNs and VNFs and so on, and the industry big boys were lining up to do something worthwhile with service automation and leveraging open source. But it wasn’t happening fast enough, and, in fact, the big players seemed to be trying to slow it down. There is a great scene in Lord of the Rings, where the King of Rohan was being whispered to by this nasty little counselor who was persuading him to do nothing. It felt a bit like that. I felt I needed to have a Gandalf moment.
To put it in perspective, we published the first of our APIs in 2012, and have been building on them ever since. So we can now work with the best of our APIs and the best of other people’s as well. We can, hand on heart, say that we have deployed our offering in Tier 1 operators in 14 weeks or less. And this is not theoretical – it is actually happening.
I found it annoying, actually, that the industry was waiting for the silver bullet, and 5G is not the silver bullet. Instead, operators are beginning to realize that with open source they can deploy new services on a second instance of their systems, which costs very little and is quick to implement. And I can say that 96% of projects arrive on time and budget, which is always good to be able to say.
So we have fired shots in the air, for sure, but we have followed up. Although I can’t quite go to the board and tell them I am a genius and can I have have a pay rise, we do see the pipeline is forming pretty quickly.
What is interesting is that the TM Forum seems to have turned a corner on this. For a long time we all wondered why we went to Nice, apart from the obvious weather related reasons. Then they got behind the Catalyst program which seems to be working well, and now they have launched their Open Digital Architecture initiative. This is microservices-based and really quite radical for the industry. What is nice is that it is a validation of what we have been saying. They are promoting the idea of a charging system to overlay many existing systems.
This gives rise to the idea – which is actually becoming reality – of the digital greenfield brand. Some telcos are already launching this. The point is that if you are looking at a five-year project – a big risky transformation – the ARPU just stops during the period. But if you create a parallel stack you can start selling digital services quickly, and to begin with, they can be quite simple, such as music and games etc. One real benefit is that there are no call centers, no shops and everything happens on the app. Which is why many of these digital makeover projects are going to smaller players.
You say it is ‘operators’ beginning to think like this. Is this coming from the CEO, or the board, or is it a sea change throughout the organization?
Good question, actually. Certainly the decision-making is now going that high. In some instances,it can be that the CTIO needs to do something faster than he can through traditional channels, and we are certainly seeing sign-off – and fast happy sign-off at that. In fact, this new approach means that we are getting sign-off faster than a traditional RFP takes to complete.
The thing to remember, when we lay down challenges like the one we did, is that we have always gone on the basis of showing people real examples if we are promoting a new way of doing things. We don’t believe in buying the snake oil unless you can show glossy haired children, who have been using it for a while, knocking about the place.
OK, so can you name names at the moment?
You will have seen the Globe announcement. They started off with individual microservices – actually for them it was shared data. And they have added more components since then. We also have Tier 1 in North America – and sorry, we can’t name that name unfortunately. With them, we sold them an end-to-end digital-first BSS and OSS platform, and they have a standing army of developers who are doing amazing things with it. They have already launched three completely new services and are using it like a set of Legos. It is satisfying, to say the least.
When we spoke two years ago, you said that the appetite for this new approach was about 20% of operators. Last year, you thought we were around 50%. Where are we now?
I would say we have now reached 75% of operators thinking this way. And I think we have reached a tipping point. Now that the cost of delivering data is more than the revenue achieved from it, something has to be done.
Now the conventional wisdom is that the big transformation is too risky. We know that. But also operators have looked at internet companies and see that they buy equipment cheaper, and they manage software cheaper. So, the true lessons from open source are really here. Now, the CTIO can go to the board and say he can do it significantly cheaper and can do it in weeks. We had a competitive bid a few months back, and had sight of the other bids. On some, we were 5% of the price of one of the big guys – that is the reality that is out there now.
Do you see innovation being driven by Asia?
Up until a couple of months ago, we would have totally agreed. But after the ridiculous price wars in early 2017, crazy economics gave way to a bit more common sense, and working out ways to make the business work. Trust me, they are playing catch up in North America, big time. In fact, North American operators really are becoming media companies, either through partnerships or owned content, and we are possibly looking at completely separate entities in the not too distant future. Once that takes hold, we think that Europe will be a fast follower and then Central and Latin America will come next. There will be a tsunami in 2018, as people race to catch up with the early adopters and front runners.
All that said, the Innovation in Asia is extraordinary. Take Google Triangle, for example. They are buying at wholesale and giving data away to their customers for using their services. Operators had to compete with cheap data – now they have to compete with free data.
MWC is almost upon us again. Last year you thought that 5G would be the overhyped technology of the show. What are your thoughts about this year?
I think people now a have better understanding of what 5G is and what it can bring. The ability to partition cells, provide different quality of services, has great potential for the IoT. But, of course, there are no devices – AT&T has something called the Puck, but otherwise we are in the usual position. Remember in the early days of GSM when we called it ‘God Send Mobiles’? The same is true now, and it’s not necessarily surprising. I also think, by the way, that Samsung and Apple will ditch CDMA. We are definitely going for RFIs and RFPs around 5G,but no one is actually doing anything. Again, not surprisingly, what they are doing is research. So, this year, I think there will be more good, business based, conversations but anyone who thinks they are going to find gold in 2018 is ambitious, to say the least.
Actually, this could be the year when the Internet begins to properly marry telco. I think that will be interesting and long overdue. I am certainly more enthusiastic this year and looking for good business conversations around what operators are actually going to do. It will involve conversations about interchangeable components from a range of partners and best of breed platforms becoming a reality. Now that you go with Plan B, and be up and running in 14 weeks – well, that makes for compelling discussion. Now the differentiator will be around the question: “have you got form, have you got experience with this?” And we can answer, candidly, “Yes.”