Telcos are right to look to enterprise customers for near term growth. But that growth will see them selling new kinds of services, and is dependent on a new level of self-serviceability. In this episode Robert and Grant are joined by Itential CTO Chris Wade to discuss how the next big wave of digital services – an incremental revenue potential of $100B for telcos – can be enabled.
Unveiling Telecom Transformation: Orchestrating to $100 Billion
Robert Curran: Hello, thanks for joining us for another episode of the Appledore Research Podcast. My name is Robert Curran, Consulting Analyst with Appledore. As ever, we’re here to share insights on the transformation of telecom in the era of cloud, network automation, and AI. If you enjoy today’s podcast, make sure to follow us on LinkedIn and Twitter. Now enjoy the show.
Enterprise Services Evolution: Orchestrating to $100 Billion in Telecom
Robert Curran: So welcome back, everybody, to the Appledore Podcast. The $100 billion global upside in telcos selling to enterprises is probably the largest single number that Appledore has ever forecast in any of our reports. But something we make clear in our discussion about that opportunity is that accessing that revenue is conditional on a few different factors. Today’s episode, we’re going to explore just how the conventional thinking in supporting enterprise services is changing, and what impact that has on both the networks and on the supporting systems themselves. It’s something that our Appledore Principal Analyst, Grant Lenahan, has written extensively about. So welcome back, Grant, to discuss the topic.
Grant Lenahan: Thank you very much, Robert. Glad to be here.
Robert Curran: And as ever, we always like to have a guest. I’m delighted to welcome Chris Wade, who’s the CTO at Itential. Itential is a company that has quite a distinct vision about the new world of enterprise services. Chris, welcome to the Appledore Podcast.
Chris Wade: Thanks for having me.
Itential’s Impact: Orchestrating to $100 Billion with Network Automation and Digital Services
Robert Curran: Chris, maybe we could start just with a little bit of background about Itential and what you do there. I know we’re going to get into more detail, but just at a high level.
Chris Wade: Sure. I’m the CTO, so I lead our product offerings, and we focus on network automation and orchestration solutions for customers both in the service provider and enterprise domains.
Robert Curran: Chris, I do want to ask one question just to kick off with, which is what happened to enterprise services? How have they changed compared to where we were 20 years ago? And what do you think that means for telcos trying to support those kinds of customers?
Chris Wade: So when we talk about stuff like this, I usually like to think about the customer first. So if we think about the enterprises, what do they expect in products? A lot of times we talk about the types of services we want to offer, but it’s very interesting for me to think about the products that enterprises want to consume because enterprise networks have changed so much, right? We used to have data centers with branches. We used to VPN into our data center to access our applications. Now enterprises have employees everywhere. They have multiple clouds. Security is everywhere. So the needs of enterprises have really changed, and I think the first thing to do is to think about what types of products do we need to offer these enterprises as their networks have changed so dramatically.
Grant Lenahan: From your research, what would you pick out as some of those key differences now versus historically?
Grant Lenahan: Well, I think the good news is I agree with everything that Chris just said. In fact, he made my job quite easy, so I think I’m going to take a couple of areas to embellish on that. You mentioned the $101 billion, and I presume many of our subscribers and readers know that we have a published forecast that says just looking at one subset of digital WAN services with all the characteristics Chris talked about, there’s $101 billion incrementally, not in total, just the new business that Telcos could win around the globe per year at stake. So there’s a real reason to do this. In fact, I love the idea that we’re talking about new money rather than cutting costs within the constraints of our old business or our industry’s old business. That’s very exciting.
The Changing Landscape of Enterprise Networks in Telecom
Grant Lenahan: As to the pace of change, I think it’s really been very dramatic the last few years. I mean, to tell a little story, if I go back 20 years, almost exactly 20 years to today, Keith Willits and I were sitting in my office in Piscataway, New Jersey, drawing on a whiteboard, talking about the fact that the idea that all services were defined by hardware was an obsolete thought, and that there were going to be things defined by software, they’re going to be programmable, they’re going to be dynamic, they’re going to be exposed in some kind of an interface like an API. And we needed to rethink how we managed those and what was possible. And that was the genesis, even though we called it something very different back then, of TMF’s Open Digital Program. And it’s been stumbling along very slowly for many years. But I think a combination of public cloud, the rise of cybercrime, distributed businesses, globalization, and then, you know, interestingly, COVID with work from home and even more distributed workforces has made the shift that Chris talked about much more rapid recently. And that, you know, is the new de facto.
Robert Curran: So to take Chris’s point about looking at things from the customer in rather than telcos out, I mean, that change has been happening, that change in demand, that change in possibility. The question for us today is what shape are telcos in? Are they ahead of that wave? Are they behind it? What’s your sense?
Chris Wade: Sure. I think it depends who you’re looking at. But if you look in the core network operations, I think telcos are still behind in catching up. If you look at most, you know, one of the things that’s really different about ITENTIAL, and I’m going to say it’s also something that’s different about a partner of theirs, ServiceNow, which I thought was really interesting. Two companies that when I looked at what they were doing, I had the same opinion, and suddenly they’re working tightly together. Are companies that came in at the market and said, everything should be abstracted into APIs, and that allows us to do a lot of things agilely and quickly and custom. On the other hand, if you look at most orchestration, even modern stuff that, you know, I think is very good, that’s deployed in networks, it’s based on fairly standardized models, models for 5G network slicing, models for, you know, Ethernet-based services and secure services. And these are great if you want repetitive things that can be, you know, closed-loop automated, but they’re not great for innovation, not great for, you know, Enterprise A wants something different from Enterprise B. And by the way, most of the piece parts in these services are not within the walls of me as a telco. They’re sitting in enterprises and hospitals and governments and banks and whatnot, right? So, you know, I think there really needs to be an API externally-focused way to create and manage these. And, you know, my understanding, Chris may tell me I’ve missed some subtleties here, that’s one of the things ITENTIAL is trying to do. So, you know, many applause to ITENTIAL for that.
Service Delivery Redefined: Embracing Automation and APIs
Robert Curran: Chris, is that fair? How do you see things?
Chris Wade: So there was a lot there. So I think we are behind, but the gap is not as wide as I think most people think. And I think once, you know, we are offering products, I mean, what’s happened, right, is the enterprise software market and the hyperscalers have been coming towards us in the service provider space, right, as partners. And they’re bringing some of the knowledge of how people offer services. And I think one thing the hyperscalers have taught us is if we make a product easy to use, people use it a whole lot more, right? You know, the thought of making EC2 simple and easy to consume means you get a whole lot more EC2 instances, right? So the idea that we need to make our products easy to consume and simple will scale very, very, very, very quickly. And what Grant’s touching on is we really need to think of how that’s going to happen. You know, historically, we’ve really been tied to, you know, OSS, BSS thinking, where everything ends up on my bill, which means I have to have an orchestration process, design, and assign, etc., etc. Some of these modern digital services kind of break from that trend. So the day zero and day one pinning is very different from day two. And as customers want to use, you know, whitelisting of services or maybe they want to reroute some traffic, it might not impact my bill. I think we have to somehow detach some of the day two activities with a customer-facing portal that makes it very easy to use. So when Grant talks about, you know, ServiceNow and iTential and some of the things we’re working on is really about how do we streamline product catalogs? How do we deliver digital services? And how do we allow end users to consume those as easily as possible? Because we really think that’s going to unlock demand for these services.
Robert Curran: You’re bringing up an interesting point there, that ease of use becomes part of the proposition, not just bandwidth. You know, telecom spends a lot of time talking about beyond connectivity and so on. There’s still a connectivity part there, but the route to growth isn’t more connectivity. It’s different characteristics. So what you’re describing there, the ease with which companies can change things for themselves, that becomes a characteristic of the service. The ease with which, to Grant’s point, new services can be constructed from a mix of own components in on-net and off-net, as we used to call them in a different context, but mashups in a more modern context. Is that part of what you’re tapping into there? That whole kind of, it’s much more of a lifecycle view rather than just a delivery view. Is that fair?
Chris Wade: Yeah, I would say my perspective is that these digital services can be consumed directly by most enterprises or can be offered as a managed service from their service provider. And I think I saw more of this kind of from the community maybe five years ago, is that some of these services are pretty complex to manage. I think if you interviewed most enterprises, they would prefer to consume them as a service. They would prefer somebody else manage them on their behalf. But when the level of complexity and customization and on-demand nature of these services are that a lot of enterprises have taken the burden of these services. So I think the first wave of, call it SD-WAN, digital services have been largely kind of self-consumed. We definitely think the next wave of this is more of the managed services capacity. And I think we have to reorient how we think about this as offering a better service as a service in a digital context, which is really going to hopefully blow out your $100 million estimate there at the top.
Future Vision: Itential’s Blueprint for Telecom Network Automation
Robert Curran: I mean, it’s a good point to just maybe delve a little bit deeper into Attentio’s role in that, because I mentioned at the start, I think you guys have an interesting vision and interesting perspective on how all this should work. What’s necessary and where you guys fit. Maybe you could just flesh that out a little bit for us.
Chris Wade: No, I appreciate that. So when we built orchestration and OSS systems, we had offline databases with offline design and assign because the nature of the network was it wasn’t programmable, right? So we had to build all these offline systems where we basically, in a human context, decided how the network should look. And then we, I usually say we inflicted it on the network, right? There wasn’t a whole lot of arbitration with the network. We inflicted it on the network. As the network has become programmable, it has become much more aware. It’s become much, much more intelligent. And when I say the network in the network context, I don’t necessarily mean boxes and ports. I mean, the whole software construct that equipment providers are delivering with networking. So we can arbitrate the changes to the network, you know, partnering with equipment in a programmable context versus working completely offline. So when it comes to kind of the core, itensual technology, the thought is that we need to change how we operate networks now that we have programmability. You know, I think the easiest metaphor to look at is a cloud operating model. But, you know, we have to deal in the real world with non-immutable infrastructure. So we can’t just take that per se, but we really need, we have an opportunity to rethink how we operate networks at scale. And as you said at the top, that’s very much API first. It’s very programmable. Most people listening, we’ll talk about the brownfield and how much they have, but that programmable construct is really available to us. And what we’re trying to do is drive that forward every day and show people the art of the possible as we orchestrate with programmable infrastructure.
Grant Lenahan: Does that really address the core transition, the core change in how telcos need to move forward? It’s one thing to have a programmable network, it’s another thing to actually be able to drive the business through automation, through APIs and so on. Is that a seismic shift here?
Grant Lenahan: I think it can be a seismic shift. Of course, the one thing we haven’t talked about is technology doesn’t solve all problems, right? Operational norms, business processes, business attitude, the ability to sell this. There’s a lot of things that need to change in telcos from selling a few consistent services to being able to quickly do what the manufacturing industry calls mass customization. And I think companies like, I can’t show them as we mentioned ServiceNow are providing tools that help that as long as you’re dealing at an abstract, well, not necessarily, but ideally dealing with it at an abstracted level. I don’t want to underestimate though that there needs to be an operational and mindset continued evolution at telcos for this to be successful. I mean, we’ve even seen that in their ability to execute automation where it’s very, very hard for engineers that have 40 years of experience telling them that if they micromanage and pre-engineer every detail, they will not get in trouble to let go and let the system manage things. And I think we have a little bit of the same going on here, but it’s great to have the tools. I think we’re going to see a lot more progress as a result of it.
Robert Curran: We often get a lot of consensus in telecom. We’ve all sat in many rooms where people agree violently with each other about the end game, but say three months in, six months in, like not much happens. In practical terms, and what are the problems that telcos face in taking, even given the ideas we talked about here and some of the reports, concepts like intent and so on and programmable networks, which I think everybody can agree on are a good idea, but are there particular challenges, particular obstacles to be overcome? Anything you’d highlight?
Overcoming Challenges: Orchestrating to $100 Billion in Telecom Automation and Digital Services
Grant Lenahan: I’d go back to what Chris opened up with. CSPs need to be better at looking at this through the lens of their customers. A good analogy is, which is very tightly connected to this, is we’ve had three or four shots over the past 30 years at making money on APIs. And I believe that just putting up APIs was not successful several times because we as an industry didn’t look at it from the customer’s perspective. We often put up custom APIs. Well, that’s not very useful to a pan-regional or global player that now needs, they need a least common denominator and they’d prefer that it be the greater common denominator. There are pricing issues. How does an enterprise need to consume those issues? And Chris brought up that with complex services, I think in many cases, they’d like CSPs to take on a significant portion of that complexity in the form of a managed service. But understanding how to do that and how to sell it without making it a completely custom-made manual thing, which is very hard to be competitive in cost, competitive operationally at, is I think the transition they need to make. One of the nice things is if you have a visual design scriptable tool that has that second layer of abstraction, you can essentially start creating a reusable but parametrically, sorry to use a big word about it, programmable services. In other words, services that can be customized without rewriting them that follow a formula.
Innovating Telecom: Orchestrating to $100 Billion with New Technologies
Chris Wade: Yeah, so words that come to mind that scare me are transformation, omni-channel. Like these are words we use a lot, right? Especially on the IT side of most service providers. And the thought is that we need to transform how we do everything. We still offer wave services. We still offer transport. We’re very good offering meth type services. And then we have these digital services. And we think about, how are we gonna have a new operating paradigm that takes all these into consideration? These words aren’t used in other enterprise segments. We start with a service that’s very interesting. We work with our customers to make sure it’s what they want. We roll it out, they use it more. So I think it is, to Grant’s point earlier, a little bit technology, easy, people, hard situation. But I do think we need to define the problem in the right way. Work with product management to define what we’re gonna do. I’m gonna execute against it, be comfortable with some green shoots, be comfortable with a slightly different operating model. Because at the end of the day, it’s different. Day two services for cloud is very different from dropping a circuit in the building I’m sitting in. So these things are different. And I think we need to be comfortable with, we offer different services with slightly different paradigms. And I think we need to be innovative and try some stuff out and get after it. I think those are the types of attitudes at successful service providers that I’ve seen work for sure.
Customer-Driven Automation: Insights from Itential’s CTO
Robert Curran: Maybe, Chris, I could ask you a slightly different question related to that. But in your discussions with customers, is there a light bulb moment? I mean, when do you have most fun in your job when you’re working with customers? Because we’re talking about things that are challenging to accept. Change is challenging, we all understand that. But every now and again, you get a chance in working with a customer and the light bulb goes on. They see something that they haven’t seen before, or they say, wow, that’s a good way to do that, but I didn’t even know that was possible. Are there things like that in your conversation with customers where you know then they’ve kind of crossed that line, now they’re into the new world. Now they understand kind of what this difference is.
Chris Wade: Yeah, I’ll take a very basic example. When you’re in the business of automation, typically the first attempts at automation or automation, augmented automation, I would call it, it’s really centered around human, right? So let’s automate my pre-checks, let’s automate my post-checks, I still need to stare at it. There’s a moment in time when scale gets to the point where people understand that if I’m doing a maintenance window for two hours, I can only do so much checks, right? A machine can do far more checks than I can. And the moments when we realize that I can make the service better, not just, we start with this whole, like how much time I save type of attitude. But in more advanced organizations, when they start talking about velocity, when they start talking about, this is how much maintenance we’re gonna do or this is how many services we’re gonna do because that’s what the business wants to support, unconstrained by people and process. That transition, I had a customer tell me they have more maintenance activities than maintenance windows. When we transition from what I can do to how I can drive the system to execute, that’s the light bulb moment for me. I know we’re talking a lot more about digital product delivery today, but that’s where it starts is the mental shift from automation of the activities I do to changing how I operate, leveraging automation. That is the transition. And then very shortly after that, the first thought is how do I self-service? How do I take myself out of the loop? How do I not receive the ticket? How do I not get contacted? How do I not get a cut sheet? How do I take myself out of the process so that I can manage the process versus being in the process? That transition, and I know it comes across as a very human thing one by one, but you can see it at the organizational level as well.
Robert Curran: I think that’s a great example of that difference in mindset. Like say, how do I get myself out of the loop rather than just kind of cranking the handle faster? That makes sense. Other customers you’re working with today that you can talk about that represent kind of good examples of folks making this kind of shift and taking this different view and working with programmable networks?
Chris Wade: Yeah, our entire customer base on some level. We’ve talked about in the past, we have both enterprise and service provider customers. So on one hand, we’re helping enterprises roll out SD-WAN directly. And in other cases, we’re helping service providers roll out managed SD-WAN. And I think, you know, that unique view of kind of being on both sides of that connection is really valuable. You know, I talk to a lot of service providers that are interested in doing more managed services on the enterprise side. I really consider the intersection of service provider and enterprise as the spark right now in the industry. Every enterprise I talk to is, how do I more dynamically consume these services? You know, even the MEF has an enterprise leadership council now talking about how SPs and enterprises work better together. I think that pattern is gonna be a major, you know, talking point over the next coming years is really, how do I help one side consume and how do I help the other side produce?
Standards and APIs: Catalysts for Telecom Transformation
Chris Wade: And then what Grant brought up is the great API debate. I would say we’ve spent a lot of time, I’m sorry, this is a little off topic here, but we spent a lot of time working on standards. But if we look at our partners in crime over in hyperscale land or SD-WAN, there are no standards. I would argue that if you make it simple, people will use it. Our end users are way smarter than we give them credit for. So simple, straightforward, well-documented APIs will be consumed at scale. I am, you know, I work with enterprises every day. They are chomping at the bit to consume these services. So yeah, I’m just super passionate about that intersection, the productification of these NAS services and then how we consume them. But back to your original question, yeah, I mean, we’re doing packet core stuff, we’re doing backhaul stuff, we’re doing edge stuff on the SP side and on the enterprise side. We talked about for SD-WAN, data center overlay and cloud connectivity. If you mash it all together, we’re really connecting users and their applications, you know, traversing both the enterprise and SP side.
Robert Curran: You did touch on MEF there and I wanna give Grant a chance to come in on that because I know that he’s pretty close with the MEF folks. What’s your take on kind of where the MEF is today on this intersection between telecom and enterprise?
Grant Lenahan: Well, I agree with pretty much everything Chris said. You know, one of the next big focuses right now is NAS. Network as a service, not network automation software for clarity. That’s we use the term as well differently. And they’re really pushing, how do you make it easier to order services, whether you’re an enterprise ordering from a telco or if you’re a telco ordering from another telco to serve an enterprise like a global enterprise or a telco ordering from a hyperscaler or something else, or in sort of like, you know, if I take this out to the end where I started linking lots of APIs together into a mashup in order to serve an enterprise, whether you’re the telco doing it as a managed service or as a service for them, or if you’re the enterprise consuming a combination of services. What we’re really seeing though in the MEF is a couple of things. I think they call out things Chris has mentioned before. First, incredible focus on enterprise services. Second of all, very, very strong participation by leadership in telcos. If you go to some industry bodies and then you go to the MEF, in one, you will find standards people, and in the second, you will find senior executives with a job to get done, talking about the MEF. I find that very interesting. I think part of it is that the MEF has a focus on fairly few items that, you know, really drive revenue as opposed to abstract technical solutions like APIs in search of a service.
Chris Wade: If I could just add one thing onto that is we’ve talked about APIs a lot. I do want to say that it is easier than ever to consume and leverage APIs, the tooling that exists in the marketplace. You know, a pattern that we talk about at iTential is it’s less about supporting a specific API or a specific vendor. It’s more about supporting the technologies that drive those APIs. You know, whether it’s the TMF APIs or otherwise, OpenAPI 3.1 spec has become standard. People are spinning up these Swagger specifications and you can do data bindings directly off of them. So, you know, I would say in previous eras, standardization was good, not just for what we’re talking about today about standardizing, you know, payloads and calls, but it actually standardized the technology by which you consumed those APIs. Now, you know, enterprise software, cloud operating models have really published that the technology is there for us to consume today. So, you know, just one word of hope because we talked about some complicated stuff today is the tooling is out there. I mean, if people, you know, pick it up and start running with it, it is, I don’t want to say easier, but it is ready and open for business more than any time since we’ve been doing network automation.
ServiceNow Partnership: Enhancing Telecom Automation with Itential
Robert Curran: Yeah, I think that’s a great point, Chris. You’ve segued nicely into something. I did want to give you a chance to talk a little bit more about which is your relationship with ServiceNow. I know you guys were busy at the ServiceNow Knowledge event last week and there was an announcement about a relationship that you formed with them. You touched on enterprise software, APIs and cloud, all integral elements of this kind of vibrant change we’re seeing in the industry. Would you like to say a bit more about the relationship with ServiceNow and how that features in terms of this kind of layered view and automated view and APIs?
Chris Wade: Yeah, so the macro view here is that, you know, I tend to like most products in the space. We were very, very focused on what Grant talked about. How do I talk to all these systems? How do I orchestrate across them? How do I do API integration? How do I do data integration? You know, these are pretty complicated technical problems to solve. But over the last couple of years, we realized that we needed to focus on how to consume my potential into other technologies because, you know, there’s always a broader context for an end-to-end service or an end-to-end process. So, you know, we publish into pipelines for folks that are doing infrastructure as code. And then in the enterprise, especially, you know, most customers have standardized their IT departments on ServiceNow. So instead of a customer having to build a custom app in ServiceNow and wait a few months for that to get done, we published an application into ServiceNow maybe a year and a half ago so that any automation and ITential gets rendered as an action in their flow designer. So enterprise and service providers can consume that and off to the races. So we did that for a couple of years. And then, you know, ServiceNow has been building products in the telco space under the TMT umbrella, whether it’s TNI or OMT. So they do a great job of product catalog. They do a great job of service order management. You know, I’ve said repeatedly that, you know, enterprise software vendors bring a lot of value to how to think about solving these challenges. So being that we do network-facing orchestration, we built a second application for OMT, put it in their app, and we published it into their store and announced it last week at Knowledge24 in North America. So what that means is if you build a resource-facing service to use service provider speak for a minute, if I build a resource-facing service in ITential, you can automatically publish it into the product catalog. And then it can be consumed dynamically. So it’s a 633 interface to get into it. And then a 641 coming back the other way so it can be ordered afterwards. So we’ve really taken the…
Robert Curran: Thank you for joining us for this insightful episode of the Appledore Research Podcast. Stay tuned for more discussions on the transformation of telecom in the era of cloud, network automation, and AI. Don’t forget to follow us on LinkedIn and Twitter for more updates. Until next time, stay connected.
