Virtualization is going to happen, but that isn’t the point

A question was raised at The Great Telco Debate event which caused a stir: will virtualization make telcos agile and competitive? Of course it will, but it needs to happen faster was the feedback.

This is perhaps the point which the industry doesn’t seem to be getting at the moment. Virtualization is critical for the telcos to operate in the digital economy, but progress has been slow. The question of whether virtualization is important is a moot point, everyone gets it, but what doesn’t seem to have sunk in is the fact it needs to happen quicker.

Colt is a great example of what is achievable when virtualization projects are accelerated. Mirko Voltolini, Colt’s Head of Network on Demand, gave some great insight on the Network on Demand product during his talk, which is essentially the delivery of connectivity through a cloud business model. Customers can scale up and scale down, while being billed by the hour. It is the flexibility and scalability which the digital economy demands.

This is only one product which the Colt team offer, but the concept of virtualization is one which has enabled this change. “We can fail fast and fail often, which is something we have not experienced before,” Voltolini said. It allows Voltolini and his colleagues to create and tweak products, learn from experiences and launch new services quicker. It is the OTT business model, which is proving so successful.

But to create this concept, Voltolini highlighted that virtualizing the network is a key aspect of any progression towards the digital economy, but then so are DevOps and business transformation projects. This is perhaps where many of the telcos are falling behind the times; virtualization is being viewed as a network initiative, whereas there are wider needs and implications if a telco is to remain relevant in the connected community. From Voltolini’s perspective, a successful virtualization project marries the needs and demands of the network, IT and the business in one.

One point which was raised from the audience was virtualization is like electricity, necessary but not sufficient alone. This was backed up by another frustrated voice, virtualization is like asking turkeys to vote for Christmas; there are too many people, both internally and externally, at the telcos who will lose out through the process of virtualization.

So why is virtualization taking so long? Let’s get the obvious point out of the way first and foremost, it is difficult and expensive. But now onto the more interesting point, the projects are too narrowly focused. Some telcos are resisting the idea that every company is now a software company, some individuals are stuck in the analogue age of business and some parties have not evolved to the digital world yet and therefore want to don’t want to lose out just yet.

Virtualization is going to happen quite simply because it has to. But when it is going to happen is a difficult question. The tide is turning more quickly than the super tankers can turn which is very worrying for the longer standing players in the telco vertical. The younger players, such as Three for example, might be holding back smiles as they are not as burdened by the legacy of the industry, but whether this enthusiasm is held by everyone else remains to be seen.