Advancing Life & Work

HPE Tech Talk Podcast - 5G: The New Frontier, Ep.12

5G has the power to open up untapped revenue streams for all enterprise customers, especially telecoms, and the key is deploying hardware infrastructure on not just the RAN but also the Core. Listen in as HPE’s Phil Mottram, SVP, Communications Technology Group talks about this new frontier of 5G and HPE's latest telecoms solutions.



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Robert Christiansen: [0:02] Welcome to the HPE Tech Talk, I'm your host Robert Christiansen. Digital transformation is happening every day and everywhere, from edge to cloud. And it's accelerating the need for a new open 5G network… [0:25] Today, we explore this new frontier in telecommunication with Phil Mottram, HPE's senior vice president of our new communications technology group. And we talk about some recent announcements in HPE's 5G solutions. Phil, thank you for being here.
Phil Mottram:

[0:40] My pleasure. Thank you for asking me to join.


Robert Christiansen: [0:45] Oh, it's fantastic to have you here. A colleague at arms here at HPE, I appreciate the time. [0:56] Tell us a little bit about your background and your new position here as an SVP of communications technology group. What was the impetus of forming this group?
Phil Mottram:

[1:06] Yeah, sure. My background, I joined the company about two years ago, and my background before that was all telecoms. I used to be the CEO of a mobile operator over in Hong Kong. I used to run the enterprise division of Vodafone, and I had senior positions as well with a BT, formerly British Telecom. And then the impetus in forming CTG, I mean, the clues in the name a little bit, so Communications Technology Group. By communications technology, we're looking at the requirements or the communications requirements of three sets of customers, really. One of the telcos, as you would expect, and we've got a rich heritage there of history and providing great solutions to that customer base.

[2:05] The second one would be the hyperscalers. the hyperscalers are getting more and more involved in communications as they move, or as their customers move applications and workloads out to the edge.

[2:16] And then the third group of customers that we're looking to continue support would be the NEPs, or the network equipment providers. So, we've got those three groups of customers. […] When you look at what's going on in the market and the requirements of these customers, they're all way more interested in open cloud native, innovative approaches to their technology and network deployments. And we think actually that's a great opportunity for HPE. So that's the background to forming the group.


Robert Christiansen: [3:27] In this last year, 2020 has been really challenging for a lot of people, interesting for others. And it'd be interesting to hear your take on what's it been like for the telcos with the challenges in industries, and what are some of our customers facing?
Phil Mottram:

[3:42] I think broadly speaking versus other industries, 2020 was OK, I think, for telecoms companies. Because, obviously, what we saw was individuals having to work from home a lot more, and so I guess the positive of that is there was more demands on the network and probably bigger networks being built off the back of it. […] The negatives obviously for telcos was that no one was traveling, and most telecoms companies actually drive significant roaming revenues when people go overseas and make calls and what have you.


Robert Christiansen: [4:19] Oh, that's interesting. Yeah. So when I go to London or Portugal or something like that, they make the fees mostly on when I make transition, huh?
Phil Mottram:

[4:52] I think, as an industry, telco has been largely unaffected versus other industries. But the timing's not been great, I don't think, for telcos. Because telcos, during this pandemic, have had to invest quite significantly in the run-up to 5G. So you've got telcos spending literally billions of dollars upgrading their infrastructure at a time that's unsettled with no real guarantee they're going to get a return on those investments.


Robert Christiansen: [5:35] I have a question for you, interestingly though, in 2020, I remember when everything went into lockdown and everybody switched over to their mobile device. And we started using them, I would think for me personally, significantly more. Right? For Zoom sessions or having conferences, or those type of things. I would suspect that immediate load bump was a pretty challenging moment, I suspect.
Phil Mottram:

[6:09] I think most of the telcos had to do very significant infrastructure investments just to make sure they were shoring up the capacity requirements that their network was facing. I mean most telecoms companies, they've sold their customers unlimited plans. Actually, the revenue upside of all of this is often minimal. So you've got this strange world where they're having to invest more just to support capacity. They're having to invest to move 4G into 5G against the backdrop of not much more incremental revenues. Because most consumer customers, if you're spending, I don't know, $50 a month on your plan for 4G, your expectations are set you're going to be spending $50 a month for 5G. You're not expecting to spend $60 a month for 5G, so there's not much incremental upside associated with the investments that they're making. And that's one of the tricky things for telcos.


Robert Christiansen: [7:37] Could you just break down the fundamental differences between what 5G offers the world? And then we can lead into, why does that matter to a telco?
Phil Mottram:

[7:51] I think ultimately you get more bandwidth and it's faster, right? So, that's it at a simple level. But as a consumer customer, there's only so fast you can watch a video, isn't there? On YouTube. So the margin of gain for you as a consumer, you probably don't notice it that much. And if you download videos, fine, they'll come down faster, but it's probably not necessarily going to make a meaningful difference to your life. I think where it is going to make a big difference in the short to medium term though, is more with enterprise customers and also new services. Because with enterprise customers, what you have, let's say you had an oil company with a big oil refinery. And an oil refinery would stretch over, let's say, 20 square miles for the sake of argument.

[8:52] Those sorts of coverage areas have always struggled to benefit from technology. Because 4G didn't really have enough capacity, Wi-Fi in some instances didn't stretch far enough or wide enough. Whereas with 5G, there's this huge opportunity to take some of these industrial type plants or areas, or industries, and really revolutionize them. So, I think what you're going to see is for automotive companies, oil companies, factories, industries, et cetera, et cetera. I think you'll see they'll recognize there's a huge opportunity for them to really change the way they operate and drive more efficiency and productivity.

[10:02] And then obviously, the other area of benefits that we'll see over the time will be in the area of new services, such as autonomous vehicles, those sorts of advances in technology. Because with 5G, you're able to segment the network a little bit more and carve it up, and just make sure that parts of the network have a certain characteristic and that will enable […] new services to be deployed.


Robert Christiansen: [10:33] It's a fascinating topic. And it always reminds me of a very, very deep lake that you have no idea that you're swimming in, right? Until you start going deeper and deeper and deeper. And there's so many different avenues for opportunities here, especially when you're talking about the geography that a 5G or private LTE network offers an organization, that you were saying, of that size. So let's pivot a little bit about, why HPE and this offering?
Phil Mottram:

[11:13] Telco operators need to move their technology forward, so we need to move from 4G to 5G. It's kind of interesting actually, when the 2G, 3G, and 4G standards were developed, they were largely driven by some of the network equipment providers. So, the likes of Huawei, RTE, those companies, right? And actually, what the telcos did for 5G was they said, actually, what we want to do is drive it a lot more so it can be open. And so, they took more of an open IT, cloud native, almost like a compute lens, on the development of the standards. Right? And so with that, you've gone from a world whereby 4G, 3G, 2G was based on proprietary technology, to 5G being very open. And in an open world, what an operator would want to do is mix and match infrastructure with software.

[12:14] And what HPE has, is we've got a unique set of capabilities. Because we've got brilliant infrastructure assets, and they're very tailored and specific for telcos. But also on top of that, what a lot of people don't know, is we've got 5,000 software engineers who are purely dedicated to building software solutions for telcos. So we've got about 50 different products that we offer to telcos around the world. And so that's why we feel we've got a good opportunity to support telcos and really drive, really meet their requirements in this space.


Robert Christiansen: [13:02] 5,000 engineers, developers dedicated to these Core systems is no small feat. It's real technology, real software, et cetera.
Phil Mottram:

[13:32] Absolutely. And it's completely global, by the way. I mean, we've got more than 300 customers in 160 different countries.


Robert Christiansen: [13:42] That's fantastic, Phil. And so, we recently unveiled the HPE 5G Core solution, and the new solutions for RAN. Can you just unpack that specific one for us?
Phil Mottram:

[14:19] On the RAN side, what we've done is we've taken our software, sorry, our hardware infrastructure, and this is where telcos want to move towards an open RAN solution. So, they want to move away from these proprietary deployments, and they want to delineate between software network functions and infrastructure. And what we've got in the RAN space is brilliant technology that's been very tailored to meet the requirements of the telcos. So that's on the RAN side, so that's like the arms and legs. And then what you have in the middle is the heart and lungs, which is the Core. And the reason it's worth identifying the difference between the RAN and the Core, is because you'll see lots of telcos around the world saying, oh yeah, we've deployed 5G. But more often than not, they've just deployed it on the RAN side and they haven't yet deployed it in the Core.

[15:18] The reason it's important to deploy it in the Core, is because when you've done that you are able to do something called “network slicing.” So you're able to take your network and then carve it up into different elements. So you may say, I'll tell you what, I've got this network, and I'm going to have this element for consumers, but I'm going to have a different part of the network for business customers. And I don't know, the business customers are going to be less congested than the consumer customers, so I can drive more revenues for me as a telco by offering a differentiated level of service. Another example might be, when my fridge decides it needs to order a service, then the IOT part of the network would be very different in performance to the part of the network that might be supporting autonomous vehicles.

[16:09] If that makes sense. Because if my car is driving up to a traffic signal and it's about to change, you certainly don't want any delays in the network, do you? So therefore, what we're doing is we're playing on the RAN side and the Core side. On the RAN side it's more around infrastructure that's very, very tailored to meet the requirements of the telco. And then on the Core side, we've got more capabilities there. So we've actually got some of the network functions that an operator would need in order to deploy the Core stack. And so what we have done, is we've pulled together our 5G Core stack offer. And if you think about it like a cake, where the bottom layer would be the infrastructure, clearly we've got some great propositions in that space. They need to have a middle layer, which would be like a PaaS solution from Red Hat, who we partner with.

[17:02] And then on top of that, you need about 15 different network functions in order to deliver a Core network solution. And we have some of those that we built ourselves, so they're cloud native and proprietary to HPE. Then we have some from partners. What we're doing is we're packaging that cake as one solution, and then offering it to operators on a consumption-based model. So we've got customers where we will say to them, “Okay, we can deliver the Core network elements of your 5G network, infrastructure, PaaS layer, and network functions. And we can charge you for all of that on a consumption-based model,” which would be like a subscriber-based model. So, as they connect subscribers to their network, we then built for those subscribers.


Robert Christiansen: [18:13] Let's extend it to your previous comment about the hyperscalers and how they're going to be connecting into that. And how do they see playing in the Core/RAN space, and what do they want to bring to the market space as well?
Phil Mottram:

[18:25] Yeah, sure. I mean, if you think about it from a hyperscaler perspective, so obviously, I guess before 5G for the most part enterprise customers would work with a Microsoft or AWS, or whatever it may be. Some of those type of scalers and deploy applications in their public cloud infrastructure. And then as those applications move out onto the edge, or out towards the edge, there's a bit of a tension, really. Because, let's say you've got an automotive manufacturer that say, okay, we want to really revolutionize the way our factory plant works, and we see 5G as a great way to enable that. Then what they will want to do, is they will want to move some of their application workloads out towards the edge. And then the edge may be the car production plant, right?

[19:25] Now, at that point they've got a few options, haven't they? One option is, they deploy an edge solution themselves, which the hyperscalers will not want. The other option is, they try and work with the hyperscaler. Who would say, “Okay, we can help you deploy that application and workload out to the edge.”

[19:44] Now, in order to do that though, hyperscalers need to have some form of communications capability to underpin that application moving out towards the edge. But it is kind of interesting, because we could see a bit of tension really between the hyperscalers and the telcos. Because the hyperscalers move out towards the edge, they're somewhat moving into the territory of the telcos. Because the telcos often provide the fixed area network or the fixed wide area network for those enterprise customers.

[20:30] So where you've got the automotive manufacturer that wants to move applications out to the edge, well the chances are they're telco was already providing network and other services out at the edge. So it's going to be interesting to see how it all plays out. And I think what you're going to see is a range of hybrid models, really. I think in some instances, the hyperscaler and the telco will partner and work together in other instances. They may end up competing with each other, to be honest. Because the telco will not want to become a dumb pipe where they're just providing the infrastructure, because at that point you've lost the opportunity to differentiate. So it's going to be interesting to see how it all pans out.


Robert Christiansen: [21:15] So what successes have we had with these cloud native 5G Core so far? Any particular organization you want to talk about?
Phil Mottram:

[21:21] Yeah, so the 5G Core, we've got a customer, a very, very large customer that goes live in the middle of 2021. […] And then one of the more public ones recently is Orange. I mean, Orange are European based, but very global in their operations. And we've been working with them in their labs to show how an open 5G Core is better than a more proprietary type model. So that's a more public reference right now. But overall, I think we've got about 70 different 5G discussions in the Core side underway at the minute.


Robert Christiansen: [22:12] How about on the RAN side of the open RAN space?
Phil Mottram:

[22:16] I think the RAN side is probably moving faster… Because the 5G RANs are being deployed before the 5G Cores.


Robert Christiansen: Oh, right. Right.
Phil Mottram:

[22:28] And I think also the customers are way more interested in an open architecture. And what we've done, is we've made sure that we really got the industry involved in the design of our open infrastructure for the RAN side. So we've joined the O-RAN bodies and some other bodies that heavily sponsored by the industry just to make sure that we are delivering the requirements that they need. Yeah, you'll see some more press releases from us in the coming months about our activities in that space.


Robert Christiansen: [23:00] Well, Phil, thank you so very much for joining us on the HPE Tech Talk. This has obviously been a great space, I find it hugely intriguing. I just want to thank you for taking the time today.
Phil Mottram:

[23:09] Hey, my pleasure. Thanks very much for inviting me.


Robert Christiansen:

[23:23] Thank you for joining us on the HPE Tech Talk. It's obvious that the 5G will continue to be a major force in telco, and HPE is on the leading edge of this trend. To our listeners, thank you for tuning in. And if you haven't yet, hit the subscribe button on the HPE Tech Talk. And until next time, we'll see you then. Bye-bye


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Editor-in-chief for the HPE Advancing Life & Work blog.