Nokia is making its first foray into software-as-a-service for telecoms network operators. The launch of a suite of tools for communications service providers (CSPs) could come at just the right time for the Finnish tech stalwart, experts told Tech Monitor, as it looks to take advantage of the industry’s slow but steady march into the cloud.
Announced yesterday, the new services include security service NetGuard Cybersecurity Dome, and Nokia Anomaly Detection, which uses AI to spot potential problems with communications networks. It has also made its Data Marketplace, a platform on which organisations can share and analyse data, available as a service. More new services are expected to follow early in 2022.
Converting to a SaaS model can offer network operators “a less expensive, more flexible, and more customer-centric pathway for operating their network and delivering new services,” Nokia says. “The convergence of 5G, cloud-native software and SaaS creates a great and fast-growing opportunity for Nokia,” said Raghav Sahgal, the company’s president of cloud and network services. “With the groundwork we’ve already been laying, our SaaS delivery framework is in a very strong competitive position.”
Is the telecoms industry ready to join the cloud revolution?
CSPs have been slower to embrace the benefits of SaaS than other industries, with the first generations of “telco clouds” and their software offerings often not delivering the functionalities required to compete with traditional physical infrastructure.
Services that have been moved to a SaaS model have tended to focus on customer experience rather than core network functions, says Susan Welsh de Grimaldo, senior director analyst at Gartner. “There has been a gradual move to early adoption of SaaS, particularly for some uses such as customer experience management and other parts of business support systems,” she says.
But now things are starting to change, partly because of the rise of 5G and the potential benefits of cloud-enabled 5G networks, explains Paolo Pescatore, lead analyst at PP Insight. “Ultimately, all telcos are seeking to transform their operations as they march towards 5G and a software-driven architecture,” he says. “There is a growing desire to move stuff closer to the edge in order to save costs and be more efficient, and users’ insatiable appetite for data is showing no signs of easing up.”
For businesses undertaking digital transformation projects and building new digital services for customers, the change is likely to be a beneficial one, says Pescatore, adding that it will be good for “high-bandwidth applications”. “Anything really that requires large file sizes, need for speed and low latency [will benefit],” he says. “This concept has been accelerated in light of the current challenges and everyone working remotely. All processes and workflows need to be redesigned with a greater focus on digital transformation.”
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Is the Nokia SaaS launch well-timed?
With customer demand slow to ramp up, Nokia and its rivals have been slow to offer SaaS networking products for CSPs. Meanwhile, the US tech giants have started to show an interest in this area. As reported by Tech Monitor, Google Cloud has been providing services as part of Belgium’s 5G roll-out, working in partnership with companies including Nokia. Microsoft’s Azure cloud platform also offers services designed specifically with CSPs in mind. Nokia says it is targeting a SaaS market which will grow to a value of $3.1bn, across CSPs and enterprises, by 2025.
“This is impeccable timing from Nokia as telcos jump on the cloud bandwagon,” Pescatore says. “Arguably, the move could have been a bit sooner given that the tech giants are in prime position.”
Gartner’s Welsh de Grimaldo agrees: “A number of cloud-native centric companies have been leading the way with SaaS for particular areas, and CSPs are starting to look at expanding their use of SaaS in additional parts of their operations and network with the introduction and expansion of 5G,” she says. “We are still in the early days of CSPs moving to adopt a SaaS model so Nokia’s timing is good.”
