Open source developments are the biggest single threat to today's major telecom equipment vendors, according to the results of an industry survey conducted in late November ahead of Light Reading's annual 2020 Vision Executive Summit.
Almost 190 respondents from the industry shared their views in the survey, and as the graphic below shows, "open" was the word that cropped up most in the responses to the question, "What is the biggest threat to today's major telecom equipment vendors?"
The "open" response came in a number of different guises: "Open Source" was the most popular, but OpenRAN, the radio access network disaggregation development being promoted by the Telecom Infra Project (TIP), was also specifically cited by multiple respondents.
It's worth noting that our survey was conducted shortly after OpenRAN had featured prominently in the news during November 2019:
- Facebook, Telefónica take OpenRAN 'Live' in Peru, boast 450K subs
- MTN to Deploy 5,000 OpenRAN Sites From Parallel Wireless in Africa
- Vodafone Eyes Open RAN Overhaul at 100K Sites, May Swap Existing Suppliers for 5G
- Sprint to Open TIP Community Lab for OpenRAN 5G
- TIP Takes Off in Amsterdam
In addition, open interfaces, white box, TIP, cloud-native and disaggregation also got mentions. One respondent noted: "For the largest vendors [the biggest threat is] the transition to open, disaggregated platforms -- for the smaller challenger vendors, it is inertia."
But not everyone had the same take. "I think smaller telco industry vendors will suffer most from the move to white boxes and open source software, but the larger vendors will adapt and use white boxes/open source software to more cost-effectively supply network equipment," noted one participant.
Show me the money
As you'd expect, financial pressures featured prominently on the responses: The cost of R&D was cited as a significant threat to the future health of the major vendors, as was "low margins" (the vendors will tell you it was never any different...) and "reduced CSP investments." Another take on that latter comment is that CSPs will have less to spend with the vendors, and so cause a collapse in the food chain, as their revenues are "gobbled by the hyperscalers."
Another suggested that those hyperscalers, which spend big bucks with some telecom industry vendors, would "build their own gear," and cut their spending with traditional suppliers. The increasing interest in developments at TIP, where Facebook is a major influencer, would add fuel to that particular fire.
In addition to money, geopolitics was also cited as a pressure, with politics, trade wars and simple "China" mentioned by a number of respondents.
The other notable trend amongst the responses, but which didn't really feature in the resulting word cloud was culture and process: Here's a selection of responses citing cultural threats to the major vendors:
- "They need to change with the industry or prepare to be replaced in the medium-term future."
- "Hubris and internal bureaucracy."
- "Telco culture and mindset."
- "Themselves. They are not innovative and proactive but just react to pressures from the IT sector. They like to hide themselves in closed systems and proprietary software. With this mindset it is also not possible for them to attract young talent."
- "Themselves. Over reliance on old business models."
- "Getting 5G wrong."
Last but not least...
There's always one, isn't there? My favorite response to the question "What is the biggest threat to today's major telecom equipment vendors?" was: "Cheese fondue blocking the router ports."
Don't rule it out!!
— Ray Le Maistre, Editor-in-Chief, Light Reading