How Feasible is "Orchestration" as a Business Model?

“Rather than continuing down the road of being a connectivity provider, CSPs need to transition to become an intelligent service orchestrator ,” says Bengt Nordström, Northstream managing director. “Taking a connectivity and wholesale approach in 5G, or becoming a reseller to the edge, will put CSPs in danger of seeing revenues dry up.”

“Becoming an orchestrator” is viewed by some as a move up the stack to becoming a “service enabler,” presumably allowing additional value creation and revenue generator possibilities. 

source: Ericsson 

Also, there is a less customer-facing understanding of “orchestration” that involves the internal operations of the access and transport network itself. In that sense, orchestration is about automation more than service creation, the creation of end-to-end service more than occupying a new role in the value chain.   

Orchestration makes sense, no matter which definition is used. But one form is easier than the other. Orchestrating the internal operations of the communications network is one thing, taking on a new role in the value chain, ecosystem or functions stack is a different matter. 

The issue is how feasible it is that the access provider becomes the app orchestration supplier, “positioning themselves as the key to enabling a wide range of services through their ability to connect a complex ecosystem of new digital offerings,” notes Nordström. 

Otherwise, 5G is likely to turn out as did 4G, with much of the new value reaped by over the top app, commerce and content suppliers, not access providers. 

source: Ericsson 

“For many CSPs (communication service providers), the aim of digital transformation programs is to empower them to become service enablers or service creators, which increases their commercial enterprise opportunity,” Ericsson says. 

But it might also be fair to point out that this requires moves akin to becoming system integrators, especially integrators with vertical market domain expertise. Some might note that others in the value chain already have staked out this position, requiring access providers to muscle out other existing competitors. 

Connectivity providers might assemble multi-cloud access capabilities, for example. But most access executives would be happier with a more-developed role as service creators. 

Also, in the internet era, it has proven easier to move down the stack than up the stack. That is to say, it has proven easier for entities with domain knowledge to add lower layer functions to create new offers, than to assemble new offers from below. 

In itself, the advice to “orchestrate” makes operational sense. All virtualized networks require orchestration. Whether the use of the term also extends to business role, and the odds of succeeding in such roles, is a different matter.