Tuesday, February 1, 2022

Blueprint: An insider’s view on the do’s, don’ts and deal breakers of SaaS

Mark Bunn, Senior Vice President, SaaS Business Operations, Cloud and Network Services, Nokia

Launching a new business model isn’t for the faint of heart, particularly when the change disrupts the status quo. Software-as-a-Service for communication service providers promises to change the very foundation of how our industry does business today. Moving from a legacy of customized, on-premise technology to a cloud native environment where everything is managed by the software vendor, is not only a change in mindset, it also changes the way CSPs have managed their businesses since the industry began in the 1800s.

The tipping point where only the strong survive 

Are CSPs ready to step into another chapter of telecommunications history? It’s only a matter of time before we reach a tipping point. SaaS will transform the way CSPs consume software. 

What’s to gain? Faster time to market, faster deployment of systems and new capabilities. Done right, SaaS eliminates risky, cumbersome upgrades, delivers significant savings on total cost of ownership (TCO) and reduces worry. Adopting SaaS will vastly improve the time-to-value that CSPs can realize by having on-demand access to services. 

Software-as-a-Service for CSPs can usher in a new era, reducing business friction to a level that makes mass adoption and value creation possible. Of course, any major shift brings cultural, operational and technology changes and it’s important to pay attention to lessons we can learn along the way.

Five critical assertions

1. Security and compliance are non-negotiable. 

As security breaches can be devastating. it is critical to take every reasonable action while providing a fully functional and highly available service. Security compliance is table stakes and takes significant time, effort and cost to achieve.

2. Architecture drives profitability.

In a cloud native environment, consider scalability at both ends of the spectrum where cost control becomes most challenging. Keep a rein on technical debt incurred as a byproduct of time-to-market priority decisions. Automate, automate and automate again, relying on infrastructure-as-code instead of manually applying production changes. It keeps the costs of SaaS operations flat while growing the SaaS subscriber base. Finally, and most important, diligently manage the reliability associated related to the deployment architecture with software.  

A key difference between SaaS and other forms of hosted services is that the software, not human beings, is responsible for managing the SaaS services.  For example, if we had production SaaS customers on our SaaS Delivery Framework today, we would have expected little measurable service impact for the AWS outage that occurred the week of December 6. The combination of our SaaS Delivery Framework architecture and Site Reliability Engineering early detection system provides a shield against this type of service disruption. In our future end-state, the SaaS Delivery Framework will enable us to move workloads between hyperscaler platforms to mitigate cloud outages like this one.

3. Embrace the fact that we are the IT department.

The buck stops with the SaaS delivery team, as the responsibility for operations, administration and management moves to the SaaS service provider. The SaaS delivery team provides the equivalent of a public utility service with responsibility for infrastructure, security, patching, updates, and data management including backup, archival and recovery. 

4. The commercial risk is distributed. 

For a mature SaaS service, there is no upfront cost for the buyer and no upfront revenue for the seller. On and off-boarding is expected to be easy. An exceptional offering and ongoing engagement with the customer are critical for retention. 

The SaaS business model is cost-effective. The customer can reduce IT expenses related to the management of personnel, hardware, and software. With a pay-as-you-go, pay-as-you grow subscription, costs for the buyer and recurring revenue for the seller are better managed by providing commercial scaling based on actual need. 

Updates to customers are provided automatically and new features can be accessed immediately. In short, buyer and seller alike reap efficiency and financial benefits from SaaS. 

5. The customer can no longer “always be right”.

With SaaS offerings, we manage customers as a group, not as individuals. SaaS at commercial scale requires the SaaS service provider to maintain full control of the lifecycle of the service. As a result, customers don’t dictate release and upgrade schedules.

Are we there yet?

Now that we’ve laid the foundation with lessons learned, let’s look at clues for SaaS buyers that the service offering has yet to reach a mature state. 

Hosted private cloud versus SaaS

A SaaS buyer would expect that the installation process is fully automated. If professional services with fees are essential to get started or the time between confirming an order and deployment is measured in weeks, it’s likely a hosted private cloud and not SaaS. A SaaS offering includes standard support with the subscription price. Support (or “CARE”) isn’t sold as a separate add-on to the SaaS service. 

Extensibility is measured by the ability to tailor a system and the level of effort needed to implement and maintain the extension. High extensibility leading to extreme customization and, subsequently, increased security vulnerability risk, is inconsistent with a SaaS model. These characteristics are commonplace in hosted private cloud offerings.

Signs it might not be cloud native 

Forced downtime and long, scheduled maintenance windows indicate software that isn’t cloud native. Applications that don’t auto-recover are not mature cloud native applications even though they may have incorporated cloud native elements.

It’s closer to an on-premises model

More than a handful of product codes per service and/or overly complex pricing, indicates an on-premise commercial model. The absence of proactive security penetration testing is also a tell-tale sign. Simplified pricing models and sophisticated security validation are fundamental characteristics of SaaS.

Walk this way to full maturity

Delivering SaaS successfully depends on building a strong foundation for entering the marketplace. While a true SaaS offering needs many ingredients before it’s considered fully mature, that doesn’t mean not being in position and being ready to sell. 

You can offer direction on standard industry security compliances and increasingly provide self-service capabilities to tenants, including ordering, billing care, pay-as-you-go pricing, and service health dashboards. 

There’s a lot more than meets the eye to a true SaaS offering. Getting from where we are today to maturity promises to be the journey of a lifetime. 

O-RAN will be a hot topic at #MWC22

by Benedict Chua

O-RAN is a hot topic on the #MWC22 agenda, says Stephanie Lynch-Habib, CMO of GSMA, speaking at MWC Los Angeles 2021. Stay tuned for more videos with top technology influencers.

Dell'Oro: Hyperscale data center CAPEX to double over next 5 years

Global data center CAPEX is on track to reach $350 billion by 2026. We forecast hyperscale cloud service providers to double their data center spending over the next five years, fueling the market growth, according to a new report from Dell'Oro Group.

“Our outlook for spending on data center infrastructure CAPEX is optimistic, with a five-year projected growth of 10 percent,” said Baron Fung, Research Director at Dell’Oro Group. “The hyperscale cloud service providers will account for an increasing portion of the total market, as they invest to expand their network of data centers, increase cloud capacity, and deploy AI infrastructure to enable new applications such as the metaverse. We also anticipate incremental growth as data center infrastructure become more distributed, as the cloud and telecom service providers and enterprises launch new services at the edge of the network,” explained Fung.

Additional highlights from the January 2022 Data Center IT CAPEX 5-Year Forecast Report:

  • Worldwide data center CAPEX is forecast to grow 10 percent by 2026.
  • CAPEX on servers is expected to outgrow other areas, driven by adoption in new server CPU platforms and accelerated computing.
  • Edge computing is forecast to comprise 8 percent of total data center infrastructure spending by 2026.


Dell'Oro: Access equipment sales from 2021 to 2026

Sales of PON equipment for fiber to the home deployments, cable broadband access equipment, and fixed wireless CPE will all increase from 2021 to 2026, as service providers look to expand both the reach and rate of their fixed broadband services, according to a newly published report from Dell'Oro Group.

"Between national broadband plans, public subsidization, and private equity, spending on broadband infrastructure will see sustained growth through 2024, and will remain strong through 2026," said Jeff Heynen, Vice President at Dell'Oro Group. "Competition for broadband subscribers is heating up everywhere, fueling the need for operators to invest heavily in their access networks," added Heynen.

Additional highlights from the Broadband Access 5-Year Forecast Report:

  • PON equipment revenue is expected to grow from $8.3 B in 2021 to $9.8 B in 2026, driven largely by XGS-PON deployments in North America, EMEA, and CALA.
  • Revenue for Fixed Wireless CPE is expected to reach $2.8 B by 2026, led by shipments of 5G sub-6GHz and 5G Millimeter Wave units.
  • Revenue for Cable Distributed Access Equipment (Virtual CCAP, Remote PHY Devices, and Remote MACPHY Devices) is expected to reach nearly $900 M by 2024, as operators ramp their DOCSIS 4.0 deployments.


Starlink Premium promises 150-500 Mbps downlink, latency of 20-40ms

Starlink announced a Premium tier broadband service that promises  download speeds of 150-500 Mbps and latency of 20-40ms, enabling high throughput connectivity for small offices, storefronts, and super users across the globe.

Starlink Premium uses a bigger antenna that is twice the area of Starlink's standard phased array with broader scan angle. There are no long-term contracts, no data caps, and no exclusivity requirements.

Commercial availability for Starlink Premium is expected in Q2.


Nautilus Floating Data Center connected via fiber

A floating data center deployed on a barge in the San Joaquin River of Central California will use an innovative water cooling system to increase its power efficiency.

Located at the Port of Stockton, the barge-mounted 10,000 square foot carrier-neutral data center is connected to an 18 mile, redundant, high count fiber ring that Utility Telecom built to link the unique facility to a local carrier hotel. 

Clearfield supplied its portfolio of  Clearview cassettes, FieldShield Drop Assemblies, terminals, cabinets, frames and enclosures for connecting the tightly packed spaces of the barge.

The companies said that installing high-speed fiber connectivity from land onto a water-based data center represented the latest, unique fiber deployment challenge for Clearfield’s products to solve. Limited access into the data center and a lack of traditional telecommunication demarc connection points required a creative approach, working with Utility Telecom to deliver and connect the fiber that brought the data center online.

Nautilus Data Technologies’ patented zero-impact water cooling system enables the highest density compute at 1.15 PUE or less with a 30 percent reduction in energy-related CO2 and air pollution. The  system operates without consuming water, producing wastewater, or using refrigerants and chemicals, making it harmless to water and wildlife.

“We are changing the dynamics of the data center industry by factoring sustainability and impact as equal value to the compute environment, resiliency, and scale,” said Ashley Sturm, Vice President of Marketing, Nautilus Data Technologies. “The team at Clearfield and Utility Telecom helped design a network to meet specific needs so we can maximize the opportunity for our company and clients.”

“Providing the right connection options is fundamental to how we approach the market, especially for companies like Nautilus Data Technologies that deliver a unique solution that can change the game for their respective industry,” said Michael Wood, National Market Manager – Utilities, Clearfield. “We believe we can help our operator partners overcome any challenge or obstacle their deployment environment presents as they roll out fiber networks to help take their network and customers further.”


Aeva debuts 4D LiDAR on silicon photonics chip

Aeva, a start-up based in Mountain View, California, introduced a "4D LiDAR" sensor based on a unique Frequency Modulated Continuous Wave (FMCW) technology and a LiDAR-on-chip module design. The sensor uniquely detects the fourth dimension of instantaneous velocity for each point in addition to 3D position. 

Aeva’s LiDAR-on-Chip design eliminates all fiber optics and places all key components including transmitters, receivers and optics onto a silicon photonics chip in a compact module.

Aeva's 4D Perception software powers features like 4D Localization and Ultra Resolution, a camera-level image with up to 20 times the resolution of legacy LiDAR sensors. 

Key features :

  • Camera-Level Ultra Resolution: Leverages Aeva’s proprietary raw 4D data to deliver a real-time camera-level image with up to 1000 lines per frame with no motion blur for the static scene
  • Instant Velocity with Ultra Long Range: Aeva’s next-generation 4D LiDAR uniquely measures instantaneous velocity for each pixel in addition to 3D position, allowing automated vehicles and machines to perceive where things are and know precisely how fast they are moving, at distances up to 500 meters
  • LiDAR-on-Chip Technology: A groundbreaking design eliminates all fiber optics and incorporates all key LiDAR elements onto silicon photonics in a single compact module for reliable and scalable production
  • Automotive Grade Reliability: With automotive-grade ratings for ingress, impact, thermal, and shock and vibration to ensure peak performance across a variety of road and environmental conditions
  • Designed for Versatility: At a quarter of the size of the previous generation, the compact design allows for a wide range of integration options, with real-time configurable maximum ranges, field of views and scan patterns to enable a broad range of autonomous applications

“Aeries II is a leap forward for the industry, and we believe it will play a critical role in unlocking the next wave of automation across a variety of applications from automotive, to industrial and beyond,” said Mina Rezk, Co-Founder and CTO at Aeva. “Aeva's unique FMCW technology has inherent advantages like instant velocity detection for each point that allow us to deliver several crucial breakthroughs for our customers such as Ultra Resolution and 4D Localization, which have not been possible until today. Aeries II provides our customers with a new level of perception to help automated vehicles and machines make safer, more intelligent decisions with higher confidence.”


NeoPhotonics shareholders approve acquisition by Lumentum

NeoPhotonics stockholders approved the merger agreement under which Lumentum Holdings will acquire NeoPhotonics. Stockholders also approved other proposals relating to the transaction.

Approximately 99.5% of NeoPhotonics stockholders who voted cast their votes in favor of the proposal to approve the merger agreement. This represented approximately 76.3% of NeoPhotonics’ outstanding common stock as of the record date for the Special Meeting of Stockholders.

The company said the transaction is now expected to close in the second half of calendar year 2022.


Lumentum to acquire NeoPhotonics for $918M amidst strong demand

Lumentum agreed to acquire NeoPhotonics for $16.00 per share in cash, representing a total equity value of approximately $918 million and a premium of approximately 39% to NeoPhotonics' closing stock price on November 3, 2021.

The companies cited significant next-gen 400G+ opportunities as a leading driver for the merger.

NeoPhotonics, which was founded in 1996 and is based in San Jose, is a leading supplier of tunable lasers and optoelectronic components, including devices manufactured in its own Indium Phosphide fabs and combined with electronics using using Advanced Hybrid Photonic Integration techniques. The product portfolio includes coherent components and tunable lasers, coherent transceivers, wavelength management products, as well as fixed wavelength lasers and high speed driver ICs. The company has engineering and manufacturing facilities in Silicon Valley (USA), Japan and Shenzhen, China.

Lumentum said the acquisition strengthens its position in the more than $10 billion market for optical components used in cloud and telecom network infrastructure. 

"With NeoPhotonics, we're making another important investment in better serving our customers and expanding our photonics capabilities at a time when photonics are at the forefront of favorable long-term market trends," said Alan Lowe, Lumentum President and CEO. "At the center of our strategy is a relentless focus on developing a differentiated portfolio with the most innovative products and technology in our industry so that we can help our customers compete and win in their respective markets. Adding NeoPhotonics' differentiated products and technology and innovative R&D team is consistent with this strategy and together, we will better meet the growing need for next generation optical networking solutions."

"Today's announcement is an exciting milestone for NeoPhotonics," said Tim Jenks, NeoPhotonics President, CEO, and Chairman. "The increasing global demand for our ultra-pure light tunable lasers and photonics technologies for speed over distance applications is more apparent than ever, and Lumentum is the ideal partner to serve our customers on a larger scale. Lumentum recognizes the importance of NeoPhotonics' differentiated photonic technology and products, which are well positioned for accelerated growth in the coming years. "

Lumentum intends to finance the transaction through cash from the combined company's balance sheet. Lumentum also noted that it will provide up to $50 million in term loans to NeoPhotonics to fund anticipated growth, which may require increased working capital and manufacturing capacity.

T–Mobile US extends BSS contract with Netcracker

 T–Mobile US has extended its BSS and managed services partnership for its wholesale business, which includes the MVNO and IoT markets, with Netcracker Technology, a wholly owned subsidiary of NEC. Financial terms were not disclosed.

Netcracker Digital BSS, including Netcracker Partner Management, and Netcracker Managed Services will help T-Mobile continue leveraging best-in-class capabilities for revenue management while optimizing a range of operations, such as reduced bill run times and improved billing accuracy. Netcracker Digital BSS serves as T-Mobile’s billing platform for its wholesale line of business and is used to deliver the best possible offerings and customer experience across its growing subscriber base.

Telefónica’s CEO elected chair of GSMA

José María Álvarez-Pallete, chairman and CEO of Telefónica, has been elected Board Chair of GSMA. He will serve through December 2022. Orange Group’s Stéphane Richard vacates the role after three years’ service.

As Board Chair, Mr Álvarez-Pallete will oversee the strategic direction of the GSMA, with the support of Board Deputy Chair, Rima Qureshi, Executive Vice President and Chief Strategy Officer of Verizon. The GSMA Board comprises the world’s largest operator groups and smaller independent operators with global reach.

“We very much appreciate the support and guidance that Stéphane provided during his term. His leadership was steady and supportive throughout a challenging period,” said Mats Granryd, Director General, GSMA. “As we look forward, we remain committed to our vision to unlock the power of connectivity so that people, industry, and society thrive. It is with great pleasure that we welcome José María as he joins us to support that vision for the coming year.”

“I’m very proud to join the GSMA as Chairman of the Board, representing the global mobile ecosystem. Technologies like 5G, edge computing, cloud, cybersecurity, AI and IoT, have redefined the way society operates and interacts online, paving the way towards metaverse, web3 and a new digital era”, said Telefónica’s Chairman and CEO, José María Álvarez-Pallete. “However, increased digitisation must include responsible leadership to drive growth, job creation, sustainability, and accelerate digital inclusion. I look forward to supporting the GSMA drive these critical issues, and many others, with the GSMA Board.”