Building a Business Case for WAN Automation

0:08 Hi everybody. My name is Brendan Gibbs.

0:10 I'm Vice President of Juniper's Automated WAN Solutions business.

0:13 I'm joined today by Ray Mota,

0:15 CEO & Principal Analyst of ACG Research.

0:17 Ray, thank you so much for joining us.

0:19 Thank you for the invite.

0:20 Appreciate it. The weather's perfect over here in California.

0:22 It’s called Sunnyvale for a reason.

0:24 That's a good point.

0:25 Ray, I always love talking to you because you have such a unique perspective

0:28 on the service provider industry overall.

0:30 You talk to everybody.

0:32 One thing I just would love to learn from you is

0:34 what are you seeing in terms of service provider uptake of automation?

0:37 What are they doing?

0:38 It’s a good question.

0:40 I think it's important to understand the rationale with it.

0:43 I would say, over the last two years, has become a high priority.

0:47 Right now,

0:47 they're looking for simplification and automation across different parts.

0:52 Not just in network automation,

0:54 but business automation and upending the process.

0:58 A lot of that is driven because their customers, for the first time,

1:02 are accelerating the digital transformation.

1:05 It used to be that I used to talk to a lot of this enterprise

1:08 about digital transformation and it was more slideware.

1:12 Now, they're accelerating because business continuity and service profitability.

1:17 It was good to see that service providers are reacting to that piece

1:21 because they have a risk at that pace.

1:23 They could miss the inflection points for that area.

1:26 For the first time, we're seeing not only them implement it,

1:29 but seeing positive results.

1:30 We recently did a survey where we saw over 72% actually saw an increase

1:36 in customer satisfaction of the service that they're delivering

1:40 because of network automation.

1:42 The time to deliver new services is over 52%.

1:46 Then the OPEX which was the biggest concern is actually,

1:50 on average, between 32% to 40% increase,

1:53 when you start looking at automation more than just task management automation.

1:58 When it gets to related to operational efficiency,

2:01 operational agility, and business agility.

2:04 Wow, that's an amazing set of statistics.

2:06 Clearly, it's having a big impact.

2:08 I wonder, you mentioned, in the last two years, it's accelerated,

2:12 do you think any of this is driven by COVID as in the SPs

2:15 found themselves just stuck at home all of a sudden?

2:18 Yes, I think that's a big driver for it,

2:20 because with this new hybrid work at home strategy,

2:24 they realized, I can't get to the office like I could.

2:28 Even things like segment routing,

2:30 simplifying networks, things like different parts of automation.

2:34 I think the biggest thing that a lot of them realized is there were a few,

2:37 Brendan, that actually thought they had automation,

2:40 but they had silos of automation.

2:42 That became difficult to manage remotely.

2:45 A lot of them realized that they needed to look at cross-domain

2:48 and change their mindset to start thinking about the service that I deliver.

2:52 What are the services and how do I automate from an end to end?

2:56 Like security.

2:57 Security is as strong as your weakest link.

2:59 When you look at a security domain,

3:01 you look from an end-to-end type aspects of it.

3:04 Automation should be not just physical assets,

3:07 it should also be some of the virtual assets together,

3:10 especially as you start moving to this hybrid cloud SaaS, physical environment.

3:15 I think, when you start removing those silos of automation,

3:18 that's where you're seeing the positive impact there.

3:20 Wow, that's amazing insight.

3:22 You also mentioned enterprises.

3:25 Are enterprise customers of SP,

3:27 do you think are they driving the use case for automation

3:31 or are there other use cases they're really responding to?

3:34 No, there's some service provider use cases itself.

3:36 There's the part of the disaggregation that's going on in mobile?

3:41 Open RAN, vRAN is becoming a high priority,

3:44 and those are great from a cost CapEx,

3:46 but if you don't bring automation to address the operational efficiencies

3:51 in there and the risk exposure,

3:54 when you do things like network slicing that allows you to scale and offer new revenue,

3:58 you're going to create an operational nightmare.

4:01 Service providers need to understand,

4:03 as they go to deliver these services,

4:05 Private G is another use case and it's a high,

4:09 which is more vertical enterprise.

4:11 Network automation needs to be a thought process from day one.

4:15 I use the analogy back-- I can probably mention.

4:18 If you look at a server AT&T versus a server at Google,

4:22 to manage one server at AT&T, just management,

4:26 it was about $600 annually.

4:27 It doesn't sound like much.

4:29 When you look at the number of servers they had, that adds up to a pretty number.

4:33 That same server at Google would be $0.01.

4:37 $0.01 versus $600, wow.

4:39 Because everything from day one is automation,

4:42 simplification, visibility, and control.

4:46 Wow, that's a huge disparity.

4:49 That just is mind-blowing.

4:50 It needs to be solved.

4:52 They need to solve it.

4:53 How does service providers think about this then?

4:55 They look to see what's worked.

4:57 I think, if you look at some of what the web scalers have done,

5:00 they've done a good job to say,

5:02 "You need to start thinking of automation from day one.

5:06 You need to be able to have a hybrid environment across."

5:10 It's good for service providers because they have a lot of legacy,

5:13 but now because there's these transitions, and investments in 5G,

5:18 they realize that consumer 5G, the business case isn't quite there yet.

5:24 They can't justify the CapEx spending.

5:26 As they look for ways for, let's say,

5:28 Open RAN to work on the CapEx reduction,

5:31 they really need to look to offset the investment by looking at things like private 5G,

5:37 but look at what web scalers is have done in the past

5:39 with the plug and play and end to end mindset.

5:42 They can literally learn a lot.

5:44 A lot of them now are looking at,

5:46 when you look at what you call Industry 4.0,

5:49 where you look at certain verticals,

5:50 that's something that there's a part in there that web scalers play well,

5:53 which is a telco cloud there, capacity and compute.

5:57 The service writers primarily focus on the connectivity layer,

6:01 which is 5G, or wireline.

6:03 There's other layers on top of there,

6:05 edge services layer and then you have applications layer.

6:09 Web scalers have been good at creating this ecosystem environment.

6:13 There's a lot of lessons and a lot of these service providers need to figure out,

6:17 how do I become web light-type customer there?

6:23 I remember thinking, a few years ago,

6:24 that service providers and public cloud operators

6:27 or hyperscalers were like oil and water,

6:30 especially as you say, telco cloud, a lot of operators, it seems to be,

6:35 without being too dramatic, they saw the public hyperscalers as competitors.

6:41 Of late, we've seen a number of partnerships.

6:44 Now, I'm wondering, given what you're saying,

6:46 that massive disparity and also a little bit more closeness between them,

6:50 is there a role for public cloud in an SP automation world?

6:54 Yes, there is, but they need to be careful.

6:55 There's a mix. You're going to see a mix.

6:57 I think, from a service provider point of view,

6:59 you need to make sure, "Do I have the skill sets?"

7:01 Number one.

7:02 Number two, "Who wants to own the customer?"

7:06 This is an important part that they need to be careful with.

7:09 You're seeing AWS, Google, Azure,

7:12 go in there and on the edge services to say,

7:15 "We can get your cloud-ready by offering that piece."

7:19 There's a revenue share opportunity that they can do in that area.

7:22 Service providers need to be realistic also to say,

7:25 "When I do revenue share,

7:26 who's going to be responsible for the customer?"

7:29 The service provider has the skill sets.

7:31 The challenge, I think,

7:32 has been is that these service providers need to find some solutions to say,

7:36 "Could I implement network automation myself to do DIY?"

7:41 If they have the skill set or find the right partner to help them with that,

7:45 then they got a solution to say,

7:47 "In this particular service, I can partner.

7:49 This one, I want to do DIY."

7:51 Finding a vendor that could help them with that network automation

7:54 in turn becomes an important factor.

7:56 Well, do you think that service providers are more open to vendors,

8:00 whether they be a big public cloud operator or a vendor,

8:03 like a router vendor, or a switch vendor, or optical vendor,

8:06 offering some package solution, or are they all still thinking,

8:10 "I need to build my own automation suite from scratch"?

8:13 It’s a good question.

8:15 I think, when you look at that part of it, it's a mix. honestly, it's a mix.

8:19 I've seen some work successful and I've seen some nightmares,

8:23 because what a lot of the service providers realize is that

8:26 when they build their own product,

8:28 someone's got to support it, someone's got to maintain it,

8:31 someone's got to bring the staff with the right skill sets

8:34 and be able to keep that staff happy to do that.

8:38 In a way, they have to become a vendor,

8:40 like who do they call when a problem happens?

8:41 They look at themselves.

8:43 Whose neck do they choke?

8:45 They choke themselves.

8:46 I think a lot of service providers that have gone in that route go,

8:49 "Timeout, I don't want to choke myself.

8:52 I need to find somebody else from that."

8:54 I always talk about where I was the naive CTO,

8:57 wherein Linux first came out and it was one of those things we're like,

9:00 "Well, I could save my company millions of dollars.

9:02 I don't need to go with this particular operating system."

9:06 Then I realized, what happens when something breaks when I do DIY?

9:10 It would have been my neck to choke.

9:12 Then I found a vendor's neck to choke but they also educated me on more pieces

9:16 where I wasn't an expert like the optical layer and other pieces for that area.

9:20 I say it's missed because there is a handful that do have the right skill sets but I think,

9:25 from a longer or bigger term perspective, is better to partner and not become a vendor.

9:31 Do what you do good, and focus on that,

9:34 and find partners that you trust that could deliver

9:36 and be there for you in case of some support issues associated with that.

9:40 I think it makes a ton of sense and just taking it together,

9:42 a few things that you've said already,

9:44 it almost seems like

9:45 there's different layers to think about from a DIY perspective, do it yourself.

9:49 There's the telco cloud layer, maybe that doesn't need to be done as often.

9:52 As you were just saying,

9:53 maybe the software layer on top of that doesn't need to be customized.

9:56 It's more the services,

9:58 the unique aspects that will be customized for an SP, right?

10:01 Yes, that's correct.

10:02 I think, what a lot of service providers,

10:04 the one that have been successful in realizing

10:06 that the service that they're considering delivered

10:09 needs to be agnostic of the infrastructure.

10:13 If that's correct, then that's where you bring in automation from

10:17 an end-to-end point of view.

10:19 Any service provider that could get to that level

10:22 is going to be able to deliver services much quicker.

10:24 When you have the first saying,

10:26 "Well, this is the architecture I've got.

10:28 These are the only services I deliver," then all of a sudden,

10:30 your timeframe to deliver the services becomes a problem.

10:34 Actually, I want to key on that exact point in terms of timeframe.

10:38 Time to service, quality of deployment, et cetera,

10:41 is now being top of mind for everybody.

10:43 I'm very interested in your thought.

10:45 I wonder if there's an opportunity for service providers

10:47 to have a mind towards that time to deployment, time to service reality,

10:52 and start consuming things as a service from other core like SaaS, for example.

10:56 Some of it depends on certain factors based on the cutbacks they have.

11:01 Then the timeframe and miss opportunity,

11:03 because customer acquisition costs,

11:06 the longer you wait to deliver the service,

11:08 the longer it goes up customer acquisition costing.

11:11 That's a number one priority for board-level members and service providers.

11:16 Then the lifetime value of the customer is reduced if you miss it.

11:20 What ends up happening, let's say,

11:21 it's a managed service contract, if you're late to market,

11:24 you either have to buy out the contract,

11:27 that increases the costs, or you have to wait till that contract expires,

11:32 and then your delivery of time.

11:34 It's really important to have a situation

11:36 where you could plug and play and get to market quicker,

11:39 especially at the pace that your enterprise customer

11:42 because they'll move without you, at this point.

11:44 They move without you.

11:45 It makes sense.

11:46 What are some of the key factors for SPs?

11:49 For example, you mentioned a few key attributes in terms of improving time to market,

11:55 time to service delivery, reducing costs, maybe reducing complexity.

12:00 The answer may be all of the above, but is there a primacy there?

12:04 How would SPs look at this?

12:05 They want to optimize around one of those factors, the others are nice to have.

12:09 I think there's two discussions.

12:11 Anytime I go into a board meeting for the service providers,

12:15 if I don't have one of the two, it's not going to be a good meeting.

12:19 The first one is how do you help me save money?

12:22 What solutions or group of solutions could you help me to optimize my profitability?

12:28 That's the first,

12:28 so Open RAN or vRAN would be a discussion associated with that.

12:32 Then the other part is, how do you make me money?

12:35 How do you increase my TAM?

12:37 That's where I identified things like private wireless or private G

12:41 to say these are some low-hanging fruits, you have the infrastructure,

12:45 right now you need to expand that into an area and develop a go-to-market.

12:48 Those are the two areas.

12:50 How do you either make me new money or increase my TAM,

12:53 or how do you reduce my OPEX?

12:56 Network automation applies to both of those there.

13:00 I'm wondering also then,

13:01 how does, say, the quality of experience play into the latter case, that,

13:07 how do you make money?

13:08 Because I'm just thinking about how do SPs use automation not just to reduce their costs,

13:12 but also as a competitive differentiator, rather?

13:15 How do you get quicker time to market?

13:16 How do you deliver better quality experience to your customers?

13:19 How do you basically use that as a competitive weapon?

13:22 I think, quality experience is something,

13:24 me being a former CTO, that I was really naive about.

13:27 We recently did a survey and it was a number two priority,

13:32 customer experience, when it got to prioritization.

13:36 Customer acquisition cost was number one.

13:39 The other one is, how do we increase and maintain?

13:41 Because they spend so much money to acquire the customer.

13:46 A big priority is how do I maintain that customer?

13:49 The reason they lose it, is because of customer experience.

13:53 There are enough options out there with systems integrators,

13:56 and others to say, "If you're not going to give me customer experience,

13:59 I'll either find somebody else because things could run in the cloud

14:03 or I'll find an integrator and I try to do it myself there."

14:06 That's been the number two.

14:08 It was a eye-awakening for myself, but it is an important factor.

14:12 Yes, I actually wouldn't have dreamed it was a surprise.

14:15 No same, here.

14:16 It's compelling.

14:17 What comes next then?

14:18 You've already said that one of the key learnings

14:20 has been you need an end-to-end approach to break down the silos,

14:23 I think that was what COVID taught, what happens next?

14:27 I think when you start looking,

14:28 I think, from a future outlook perspective, there's a few things.

14:32 If you look to say,

14:32 "Okay, now I'm looking at things from a service point of view

14:35 and an end-to-end point of view."

14:37 If you look at things like machine learning,

14:39 AI, me and you are old enough to understand those protocols

14:43 and algorithms have been around for 20 to 30 years in some cases,

14:47 but the problem is you needed a Ph.D.

14:50 in-house to figure out how to implement it and get it to work

14:54 and see the value and that used to take years.

14:56 Now, these things run in the cloud.

15:00 Because they run in a cloud,

15:02 you could look at it from a cross-domain perspective

15:05 and you could work on what you call the input parameters, what do I need?

15:08 You send it to the cloud, does the complexity for you,

15:12 and you're able to do that more efficiently.

15:14 I think that's the next part of saying,

15:17 "This is where the future's going."

15:18 Moving a lot of that intelligence to the cloud,

15:21 and then I could look at things from a cross-domain and use it when I need it,

15:24 and stuff like that, so a lot of innovation going on in that space.

15:28 I love that.

15:29 I just have one last question then.

15:30 Just keying off what you were just saying,

15:32 it almost seems like, and this is a question then that,

15:36 it seems like what you're positing is using automation to take highly complex topics,

15:41 but make them easily consumable by the masses,

15:44 so to speak, as you say,

15:46 AI and ML and other complex algorithms,

15:49 you shouldn't need a Ph.D. on your staff to use automation,

15:52 so it almost speaks more to automation as an easy button

15:56 rather than say automation as a software developer,

16:00 DevOps or Ph.D. level old complexity, is that true?

16:03 Yes, that is correct.

16:04 I think you're seeing areas of automation and AI machine learning.

16:12 Like I said, I'm old enough to remember people used to talk about it,

16:14 but it was just too complex.

16:16 We're seeing, in some cases,

16:18 13-year-olds develop iPhone app where they would put in the input parameters,

16:23 send it to the cloud and the cloud does all the hard work whether is Z analysis.

16:27 Whatever type of algorithm they're using in there,

16:30 they don't care and they don't want to know,

16:32 just like that service provider is developing a service

16:35 and the underlying infrastructure should say,

16:38 "Plug whatever service you want."

16:40 We've become a platform for innovation,

16:42 and because we have automation that includes network automation,

16:47 security as well for all the provision and aspect,

16:50 we handle all the complexity for you.

16:52 You focus on, how do you deliver the service?

16:55 How to develop your go-to make?

16:56 How to price it?

16:57 Those type of things there.

16:59 That's super compelling.

17:00 This has been a great discussion, Ray.

17:01 My takeaways are automation is paramount and is mandatory,

17:05 simplicity is going to be the name of the game as well as end-to-end without any silos,

17:09 incorporating security, incorporating that kind of holistic focus

17:13 but becoming a springboard for future innovations as you're saying.

17:17 It's exciting times.

17:18 Absolutely. Absolutely.

17:19 Thank you for the invite there.

17:20 Thank you, Ray. This has been great.

17:21 Thanks to everyone for listening as well.