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[Editor's note: This podcast was recorded on April 14, 2018.]
Bringing data services to far-flung developing countries poses a host of challenges for mobile telecommunications operators. It requires a strong mobile business infrastructure stack, one that provides a low-maintenance core architecture that is common to all geographies yet enables customized capabilities and functions to meet local requirements and regulations.
In this HPE Voice of the Customer podcast hosted by Dana Gardner of BriefingsDirect, learn how global integrator Ericsson and partner Hewlett Packard Enterprise (HPE) are delivering new, fully digital business support system infrastructure to emerging economies—where simplicity and customization are key.
Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of the Customer podcast series. I'm Dana Gardner, principal analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on digital transformation success stories. Stay with us now to learn how agile businesses are fending off disruption—in favor of innovation.
Our next agile data center architecture attributes interview explores how an Ericsson and HPE partnership establishes a mobile telecommunications stack that accelerates data services in rapidly advancing economies.
We'll now learn how this mobile business support infrastructure possesses a low-maintenance common core, yet remains easily customizable for regional deployments just about anywhere. Here to help us define the unique challenges of enabling mobile telecommunications operators in countries such as Bangladesh and Uzbekistan, we are joined by Mario Agati, program director at Ericsson, based in Amsterdam. Welcome, Mario.
Mario Agati: Thank you very much.
Mario Agati, Ericsson
Gardner: We are also here with Chris James-Killer, sales director for HPE. Welcome.
Chris James-Killer: Good morning, Dana.
Gardner: What are the unique challenges that mobile telecommunications operators face when they go to countries like Bangladesh?
Agati: First of all, these are countries with a very low level of revenue per user (RPU). That means for them, cost efficiency is a must. All of the solutions that are going to be implemented in those countries should be, as much as possible, focused on cost efficiency, reusability, and industrialization. That's one of the main reasons for this program. We are addressing those types of needs—of high-level industrialization and reusability across countries where cost efficiency is king.
Gardner: In such markets, the technology needs to be as integrated as possible because some skill sets can be hard to come by. What are some of the stack requirements from the infrastructure side to make it less complex?
James-Killer: These can be very challenging countries, and it's key to do the pre-work as systematically as you can. So, we work very closely with the architects at Ericsson to ensure that we have something that's repeatable, that's standardized and delivers a platform that can be rolled out readily in these locations.
Even countries such as Algeria are very difficult to get goods into, and so we have to work with customs, we have to work with goods transfer people; we have to work on local currency issues. It's a big deal.
Chris James-Killer, HPE
Gardner: In a partnership like this between such major organizations as Ericsson and HPE, how do you fit together? Who does what in this partnership?
Agati: At Ericsson, we are the prime integrator responsible for running the overall digital transformation. This is for a global operator that is presently in multiple countries. It shows the complexity of such deals.
We are responsible for delivering a new, fully digital business support system (BSS). This is core for all of the telco services. It includes all of the business management solutions—from the customer-facing front end, to billing, to charging, and the services provisioning. In order to cope with this level of complexity, we at Ericsson rely on a number of partners that are helping us where we don't have our own solutions. And, in this case, HPE is our selected partner for all of the infrastructure components. That's how the partnership was born.
Gardner: From the HPE side, what are the challenges in bringing a data center environment to far-flung parts of the world? Is this something that you can do on a regional basis, with a single data center architecture, or do you have to be discrete to each market?
James-Killer: It is more bespoke than we would like. It's not as easy as just sending one standard shipping container to each country. Each country has its own dynamic, its own specific users.
The other item worth mentioning is that each country needs its own data center environment. We can't share them across countries, even if the countries are right next to each other, because there are laws that dictate this separation in the telecommunications world.
So there are unique attributes for each country. We work with Ericsson very closely to make sure that we remove as many itemized things as we can. Obviously, we have the technology platform standardized. And then we work out what's additionally required in each country. Some countries require more of something, and some countries require less. We make sure it's all done ahead of time. Then it comes down to efficient and timely shipping and working with local partners for installation.
Gardner: What is the actual architecture in terms of products? Is this heavily hyperconverged infrastructure (HCI)-oriented and software-defined? What are the key ingredients that allow you to meet your requirements?
James-Killer: The next iterations of this will become a lot more advanced. It will leverage a composable infrastructure approach to standardize resources and ensure they are available to support required workloads. This will reduce overall cost, reduce complexity, and make the infrastructure more adaptable to the end customers' business needs and how they change over time. Our HPE Synergy solution is a critical component of this infrastructure foundation.
At the moment we have to rely on what's been standardized as a platform for supporting this BSS portfolio. We have worked with Ericsson for a long time on this. This platform has been established for years and years. So it is not necessarily on the latest technology; the latest is being tested right now. For example, the Ericsson Karlskrona BSS team in Sweden is currently testing HPE Synergy. But, as we speak, the current platform is HPE Gen9, so it's ProLiant Servers. HPE Aruba is involved; a lot of heavy-duty storage is involved as well.
But it's a good, standardized, virtualized environment to run this all in a failsafe way. That's really the most critical thing. Instead of being the most advanced, we just know that it will work. And Ericsson needs to know that it will work because this platform is critical to the end users and how they operate within each country.
Gardner: These so-called IT frontiers countries—in such areas as Southeast Asia, Oceania, the Middle East, Eastern Europe, and the Indian subcontinent—have a high stake in the success of mobile telecommunications. They want their economies to grow. Having a strong mobile communications and data communications infrastructure is essential to that. How do we ensure the agility and speed? How are you working together to make this happen fast?
Agati: This comes back to the industrialization aspect. By being able to define a group-wide solution that is replicable in each of these countries, you are automatically providing a de facto solution in countries where it would be very difficult to develop locally. They obtain a complex, state-of-the-art core telco BSS solution. Thanks to this group initiative, we are able to define a strong set of capabilities and functions, an architecture that is common to all of the countries.
That becomes a big accelerator because the solution comes preintegrated, predefined, and is just ready to be customized for whatever remains to be done locally. There are always aspects of the regulations that need to be taken care of locally. But you can start from a predefined asset that is already covering some 80 percent of your needs.
In a relatively short time, in those countries, they obtain a state-of-the-art, brand-new, digital BSS solution that otherwise would have required a local and heavy transformation program—with all of the complexity and disadvantages of that.
Gardner: And there's a strong economic incentive to keep the total cost of IT for these BSS deployments at a low percentage of the carriers' revenue.
Agati: Yes. The whole idea of the digital transformation is to address different types of needs from the operator's perspective. Cost efficiency is probably the biggest driver because it's the one where the shareholders immediately recognize the value. There are other rationales for digital transformation, such as relating to the flexibility in the offering of new services and of embracing new business models related to improved customer experiences.
On the topic of cost efficiency, we have created with a global operator an innovative revenue-share deal. From our side, we commit to providing them a solution that enables them a certain level of operational cost reduction.
The current industry average cost of IT is 5 to 6 percent of total mobile carrier revenue. Now, thanks to the efficiency that we are creating from the industrialization and reuse across the entire operator's group, we are committed to bringing the operational cost down to the level of around 2 percent. In exchange, we will receive a certain percentage of the operator's revenue back.
That is for us, of course, a bold move. I need to say this clearly, because we are betting on our capability of not only providing a simple solution, but on also providing actual shareholder value, because that's the game we are actually playing in now.
We are risking our own money on it at the end of the game. So that's what makes the big difference in this deal against any other deal that I have seen in my career—and in any other deal that I have seen in this industry. There is probably no one that is really taking on such a huge challenge.
Gardner: It's very interesting that we are seeing shared risks, but then also shared rewards. It's a whole different way of being in an ecosystem, being in a partnership, and investing in big-stakes infrastructure projects.
Gardner: There has been recent activity for your solutions in Bangladesh. Can you describe what's been happening there, and why that is illustrative of the value from this approach?
Agati: Bangladesh is one of the countries in the pipeline, but it is not yet one of the most active. We are still working on the first implementation of this new stack. That will be the one that will set the parameters and become the template for all the others to come.
The logic of the transformation program is to identify a good market where we can challenge ourselves and deliver the first complete solution, and then reuse that solution for all of the others. This is what is happening now; we're in the advanced stages of this pilot project.
Gardner: Yes, thank you. I was more referring to Bangladesh as an example of how unique and different each market can be. In this case, people often don't have personal identification. Therefore, one needs to use a fingerprint biometric approach in the street to sell a SIM to get them up and running, for example. Any insight on that, Chris?
James-Killer: It speaks to the importance of the work that Ericsson is doing in these countries. We have seen in Africa and in parts of the Middle East how important telecommunications is to an individual. It's a real quality of life issue. We take it for granted in Sweden; we certainly take advantage of it in my home country of Australia. But in some of these countries, you are actually making a genuine difference.
These people need to be connected and haven't been connected before. And you can see what has happened politically when the people have been exposed to this kind of technology. So it's admirable, I believe, what Ericsson is doing, particularly commercially, and the way that they are doing it.
It also speaks to Ericsson's success and the continued excitement around LTE and 4G in these markets, not actually 5G yet. When you visit Ericsson's website or go to Ericsson's shows, there's a lot of talk about autonomous vehicles and working with Volvo and working with Scania, and the potential of 5G for smart cities initiatives. But some of the best work that Ericsson does is in building out the 4G networks in some of these frontier countries.
Agati: If I can add one thing. You mentioned how specific requirements are coming from such countries as Bangladesh, where we have the specific issue related to identity management. This is one of the big challenges we are now facing, of gaining the proper balance between coping with different local needs, such as different regulations, different habits, different cultures, but at the same time also industrializing the means, making them repeatable and making that as simple as possible and as consistent as possible across all of these countries
There is a continuous battle between the attempts to simplify and the reality check on what does not always allow simplification and industrialization. That is the daily battle that we are waging: What do you need and what don't you need. Asking, “What is the business value behind a specific capability? What is the reasoning behind why you really need this instead of that?”
At the end of the game, this is the bet that we are making together with our customers—that there is a path to where you can actually find the right way to simplification. Ericsson has recently been launching our new brand, and it is about this quest for making it easier. That's exactly our challenge. We want to be the champion of simplicity and this project is the cornerstone of going in that direction.
Gardner: And only a global integrator with many years of experience in many markets can attain that proper combination of simplicity and customization.
Gardner: I am afraid we'll have to leave it there. We have been exploring how an Ericsson and Hewlett Packard Enterprise partnership has established a mobile telecommunications stack that accelerates data services in fast-emerging economies. And we have learned how this mobile BSS infrastructure creates a low-maintenance common core, yet remains easily customizable.
So please join me in thanking our guests, Mario Agati, program director at Ericsson. Thank you, sir.
Agati: Thank you very much to all who have been listening to us.
Gardner: And we have also been here with Chris James-Killer, sales director at Hewlett Packard Enterprise. Thank you, sir.
James-Killer: Thanks, Dana. I appreciate it.
Gardner: And a big thank you to our audience as well for joining us for this BriefingsDirect Voice of the Customer digital transformation success story. I'm Dana Gardner, principal analyst at Interarbor Solutions, your host for this ongoing series of Hewlett Packard Enterprise-sponsored interviews.
Thanks again for listening. Please pass this content along to your IT community, and do come back next time.
This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.