DT's Terastream: A Bigger Splash?

Iain Morris

Going native
Alas, the same cannot be said about the second element of Terastream -- the vision that service production would take place in data centers integrated into the IP network. As in the IP and optical sector, Deutsche Telekom inevitably hit resistance from technology vendors that saw this "cloudification" of network services as a threat to existing investments. Unlike in IP and optical, it has not been able to overcome these barriers so quickly. "We thought we would have full cloud-native production by now," says Clauberg.

These delays in areas such as NFV have been felt by the entire industry, and not just Deutsche Telekom. But the German operator has continued to push Terastream forward. In an effort to prove that services could be developed in this way, it launched a cloud VPN (virtual private network) service across a limited market in 2015. Clauberg says that was a precursor of today's more sophisticated SD-WAN products and the point at which Terastream and pan-net came together. (See NFV Is Down but Not Out.)

To an outside observer, figuring out where Terastream ends and pan-net begins, or where the two overlap, is not easy. It is possible to view pan-net as a subset of Terastream, says Clauberg, with pan-net focused on building data centers for service production and Terastream encompassing the entire IP-based solution. NFV inertia, of course, means pan-net has fallen behind expectations. While Deutsche Telekom has been able to set up network operations centers in Germany and Romania, as well as data centers in Greece, Hungary and Poland, only a few services were running on the pan-net platform as recently as May. In a presentation it gave at its capital markets day that month, Deutsche Telekom slapped a red traffic light marker against pan-net service migration to show the initiative was not "on track."

The related all-IP transformation, whereby Deutsche Telekom aims to shut down older PSTN systems, is also behind schedule. The original goal was to complete that project in 2018. Currently, it is running about two years late, Deutsche Telekom acknowledged around the time of the capital markets day. While the overhaul is finished in Croatia, Hungary and Slovakia, only 72% of German and 59% of Greek retail lines were IP-based at the end of June.

Taking Stock
Source: Deutsche Telekom
Source: Deutsche Telekom

Partly because of this slow progress, Deutsche Telekom has dramatically undershot previous cost saving targets. Under a plan announced in 2015, the company had aimed to reduce indirect operating costs outside the US by around €2.4 billion ($2.8 billion) annually, compared with the figure in 2014. Its goal had been to reach savings of €1.8 billion ($2.1 billion) by the end of this year, but it was tracking at just €700 million ($814 million) in 2017. Conscious it would need to find another €1.1 billion ($1.3 billion) in savings this year to realize the 2018 target, it flashed up another red traffic light against its savings ambition at the capital markets day. Under a new plan, it is now aiming for €1.5 billion ($1.7 billion) in annual, non-US savings by 2021, compared with 2017. Achieve that target, and relevant costs will fall to about €17 billion ($19.8 billion) per year in 2021, roughly €2.2 billion ($2.6 billion) less than in 2014. (See DT's Epic Undershoot Reflects Transformation Woes and DT Targets €1.5B in Automation Savings, Misses Former Target.)

All this came after Deutsche Telekom had wagged the finger at pan-net suppliers during a presentation at this year's Mobile World Congress in February. Jean-Claude Geha, the chairman of Deutsche Telekom's pan-net subsidiary, delivered a stern lecture before an audience of vendors, demanding products that support multivendor orchestration as well as much greater automation. To anyone who heard that talk, Geha's frustration seemed palpable. (See DT Demands Automation, Cloud Tech From Pan-Net Suppliers.)

Have vendors been deliberately obstructive when asked to develop cloud-native gear? Clauberg thinks not. In his view, one of the main challenges facing that community relates to the typical investment cycle, as products are designed, built and sold over a period of years. If a particular supplier labors over a packet core hardware platform, and then finds customers talking about cloudification just a year later, it seems unlikely to have much enthusiasm for an abrupt change. But as older investments are amortized, vendors are starting to accommodate new customer demands. "We are now seeing classical core services rewritten to be cloud-native and not just a virtualized version of an existing piece of hardware," says Clauberg. "The movement toward cloud-native development makes me feel very positive."

Next page: Still a work in progress

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
1/20/2019 | 11:43:39 PM
Really good article really appreciate your knowledge and found you as expert in it.
9/13/2018 | 5:22:08 PM
Re: Beer reference
Kölsch - a clear, top-fermented beer with a bright, straw-yellow hue. Nothing cloudified there Axel :) 
9/13/2018 | 11:36:56 AM
Beer reference
I won't comment on the rest of the content, but for someone who studied and worked for a long time in Cologne, this comment on the start section of the article is key: my favorite beer is Koelsch (this is brewed inside the city limits of Cologne), and definitely not Alt - which is btw also from the Rhine area - not Westphalia - but from Duesseldorf and surrounding. A small, but on the regional politics really important difference... ;-)
Featured Video
Upcoming Live Events
October 1-2, 2019, New Orleans, Louisiana
October 10, 2019, New York, New York
October 22, 2019, Los Angeles, CA
November 5, 2019, London, England
November 7, 2019, London, UK
November 14, 2019, Maritim Hotel, Berlin
December 3, 2019, New York, New York
December 3-5, 2019, Vienna, Austria
March 16-18, 2020, Embassy Suites, Denver, Colorado
May 18-20, 2020, Irving Convention Center, Dallas, TX
All Upcoming Live Events
Partner Perspectives - content from our sponsors
Edge Computing, the Next Great IT Revolution
By Rajesh Gadiyar, Vice President & CTO, Network & Custom Logic Group, Intel Corp
Innovations in Home Media Terminals for the Upcoming 5G Era
By Tang Wei, Vice President, ZTE Corporation
All Partner Perspectives