Sunday, July 11, 2021

Connectivity Networks are Becoming Computer Networks: What That Could Mean

“5G represents a paradigm shift, where the telecom industry is now taking substantial steps towards using the same building blocks as the IT industry,” says Ericssson. That is another way of saying telecom networks are becoming computer networks. 

And as networking is organized using a layered model, so too might all business processes be layered. 

source: Lifewire 

Think of the analogy to the ways all lawful applications run on IP networks: they use access supplied by third parties, with no required business relationship between the app providers and the access providers. 

To be sure, one entity might own both the transport network and the app, but that is not required. Google owns YouTube, Google search and Google Maps, which in part are transported over Google’s own global IP network. But common ownership is not required.

AIn the same way, telcos and cable TV companies own some lead apps, and also own access networks. But the relationship is not mandatory. They could own apps as well as networks. Those apps could be delivered over third party networks as well as their own networks. 

source: Ashridge on Operating Models

The point is that business operations are supported as layers on top of transport network layers. But those business and transport functions are logically separated. Ownership also is logically separated. 

In the future, that might allow different ways of structuring connectivity provider operations. In a sense, the way Comcast operates its theme parks, content studios and programming networks separately from its access networks provides an example. 

Each of those businesses runs independently of the access networks, though all have common ownership. 

source: Illinois Department of Innovation and Technology  

All that might have profound implications for the ways tier-one connectivity providers run their businesses. Connectivity providers run networks to support their core revenue-generating applications: broadband access, voice, business networks and content. 

As a practical matter, the network-operating functions increasingly are logically distinct from the application functions, as a Wi-Fi network is distinct from the apps using it. Perhaps the layers are not quite as distinct as they would be at Google or Facebook, where the app creation and business functions are logically distinct from the ownership and operation of core networks. 

But the principles are the same: all modern computer networks are based on separation of functions: logical separated from physical; higher layers isolated from lower layers; applications separated from networks. 

The obvious implication is that, over time, connectivity operations will more closely mirror the way all other networks work: transport functions separated from application functions; network functions logically separated from application, use case and revenue models. 

Historically, connectivity providers have bundled their core app or apps with construction and use of the network. In the future, as computer networks, those relationships could change. 

Already, any broadband access network allows lawful apps to be run on the connectivity network, with no business relationship between app owner and network owner. In the future, that might be further developed.  

The perhaps-obvious line of development is to further isolate business operations from the network, as Google’s YouTube, search, messaging, maps, Android and other business units are separated from the operation of Google’s own network. 

source: CB Insights

Assume a future where whole businesses (Google Maps, search, Android, Nest, Chromebook; Verizon mobility, voice, internet access, enterprise and business operations) are run independently of the transport and access networks. 

“Networks” are a service provided to the businesses, not a direct revenue generator. That is precisely how current telco or cable operations are structured already. Revenue is generated by services and apps sold to customers. The network exists only to facilitate the creation and sale of those apps. 

In principle, there no longer is any reason why applications and services need to be--or should be--developed or created to run solely on “my” networks. The bigger opportunity is to own apps and services that run on anybody’s network. 

Few would consider it “better” to create internet of services apps, platforms or services that only work on a single access provider’s network. It clearly is “better” if the platform, apps and services run on any access network, anywhere. 

But that requires a change not only of mindset but of business strategy. Today, most effort is spent trying to create value for things done “on my network.” In the future, some might do better creating value for apps, services and platforms that work anywhere, on any network. 

That assumes the continued existence of multiple competitors able to pursue such strategies. If competition is not the future connectivity framework, few if any access and transport providers will be allowed to spend much energy developing platforms, services or apps that run anywhere, on any network.

Instead, effort will revert to pre-competitive, monopoly objectives: just create and operate a competent access network.

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