DT Demands Automation, Cloud Tech From Pan-Net Suppliers

Turning a motley assortment of ageing telecom networks into a cutting-edge pan-European cloud was never going to be an overnight task. But Deutsche Telekom's ambitious pan-net project remains a sleep-depriving slog three years after it was first conceived. (See Deutsche Telekom Turns On Pan-European IP.)

The goal is to replace the legacy technologies in individual European countries with more centralized cloud systems catering to the entire region. In this way, Deutsche Telekom AG (NYSE: DT) hopes to collapse about 650 different service platforms into just 50. Instead of developing a new service 13 different times for 13 different countries, it would in future build and manage one service for all of its operations. That should lead to cost savings and give Deutsche Telekom the nimble, "fail-fast" qualities normally associated with Internet companies. (See DT Plots Pan-Net, 'Answers' B2B OTT Threat.)

Deutsche Telekom's European Footprint
Source: Deutsche Telekom
Source: Deutsche Telekom

If pan-net is to make good on these promises, Deutsche Telekom's suppliers will have to shape up. At least, that was the subtext of a closed-door presentation by Jean-Claude Geha, the chairman of Deutsche Telekom's pan-net subsidiary, during last week's Mobile World Congress (MWC). Addressing an audience of suppliers like a schoolteacher lecturing an underperforming class, Geha was short on praise. "A lot of our vendors have been ready to orchestrate on top of their functions and their infrastructure," he said. "That is not our ambition. We want more. We want vendors to be able to orchestrate across other vendors. We want no lock-in."

That multivendor orchestration has been a stumbling block is no great surprise. Across the industry, telcos have been eager to vent their frustration about the lack of vendor interoperability, especially when it comes to the tools used in management and network orchestration (or MANO, as it is commonly known). Several years into its own virtualization journey, France's Orange (NYSE: FTE) has until recently relied on a "single integrator," says Yves Bellego, its director of spectrum strategy and planning. It has just started to invest in "fully separate" infrastructure, orchestration and virtual machines, he told Light Reading at MWC.

But Deutsche Telekom's concern is not confined to interoperability. The lack of automation that comes with the traditional setup is perhaps its biggest gripe today. While it has been able to reduce the time it takes to establish a cloud "instance" from about two weeks to less than four hours, it is still heavily reliant on manual processes at its service operations center in Bucharest. "We need to go beyond infrastructure and up the chain to onboarding network functions and customers," said Geha. "Intelligent automation is key."

What does this mean? From Deutsche Telekom's perspective, the future service operations center will not have lots of people and processes in different silos. "We see engineers working with software developers and operations people, leveraging intelligent automation to do service creation and recovery in seconds and hours," says Geha. "We need to keep working on that with suppliers to reach our goal."

Geha Throws Down the Gauntlet
Jean-Claude Geha, the chairman of Deutsche Telekom's pan-net subsidiary, gives suppliers some tough homework assignments.
Jean-Claude Geha, the chairman of Deutsche Telekom's pan-net subsidiary, gives suppliers some tough homework assignments.

With this came a plea for more standardization, the absence of which has been another industry bugbear. Deutsche Telekom has been encouraged by the recent efforts of the Metro Ethernet Forum, an organization trying to address the challenges of service management and orchestration in a cloud environment. But it wants to see an even greater focus on standardization in future. "That will allow integration faster," said Geha. "It will allow us to be more agile and to address customer needs. We need to work together on a telco-grade next-generation operation."

Indeed, the operator's ideal partner, it seems, is one that has fully embraced the "cloud technology mindset" and the collaborative working style that goes with it. Deutsche Telekom wants "real cloud technology" as opposed to "slightly modified platforms." It expects some degree of knowledge transfer, too. "We don't have to know everything but we need to be able to work end-to-end with our suppliers and third-party integrators," said Geha.

This all points to one of the biggest problems that pan-net has encountered: The shortage of cloud expertise in the market. In targeting "cloudification," Deutsche Telekom has put itself in competition for talent with the likes of Amazon.com Inc. (Nasdaq: AMZN), Facebook and Google (Nasdaq: GOOG), it acknowledges. To lure budding software developers and integrators from those much trendier companies, it may have to offer some generous arrangements to prospective employees.

If this makes it more dependent on vendor expertise in the short term, the plea for knowledge sharing could unsettle a few suppliers. With the rise of open source technology, some vendors already fear a loss of value. If customers acquire the same skills and expertise, the vendor's role could be further diminished.

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The poaching of top executives by customers may be another concern. Geha, interestingly, appears to have joined Deutsche Telekom last July from Ericsson AB (Nasdaq: ERIC), the struggling Swedish equipment maker, where he was previously in charge of business in sub-Saharan Africa. Nor is he the only Ericsson employee Deutsche Telekom has recently nabbed: Jason Hoffman quit the Swedish company in December to lead MobiledgeX, Deutsche Telekom's edge networks subsidiary. (See OrbTV: MobiledgeX Further Exploring Edge Computing Opportunities and DT Forms New Edge Computing Unit, Appoints Ex-Ericsson Cloud Guru as CEO.)

All that said, open source technology and open approaches are forcing vendors to adapt their business models, or risk obsolescence in some parts of the supply chain. If they do not accede to an operator's demands, then others may step into the breach.

The question is whether the companies on which Deutsche Telekom has traditionally relied have the requisite cloud expertise (or the inclination to deliver). Currently, it appears not: Geha would hardly be chiding vendors about interoperability, and demanding more on automation, if they suddenly measured up.

Next page: Where do things stand?

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microcaptechinvestor 3/19/2018 | 6:24:52 PM
Start feeding the disruptors Here's how DT and other Tier-1s can proliferate the system. Put the vendors on notice: invest real $ with disruptors and disclose to the world who/how much/what VNFs are covered. Only when incumbents start losing contracts will they fall in line.

By complaining there isn't technology out there, it isn't helping. Put the money where the mouth is, and feed the cloud-native players.


disclosure: long RDCM shares (who has fully cloud-native virtual probes and packet broker).
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