Users set to pay less for data after telco network virtualisation

Chip giant Intel has decided that proprietary fixed function boxes strewn throughout telco networks can be replaced by software and standard server hardware.

Much like how the costs for computing power and storage have decreased for users of cloud services as software-defined services provide increasing functionality, so the theory goes that once the networks within telecommunications carriers are also virtualised, users should expect to see more data for less cost.

The path to such a place is to replace fixed functionality systems with virtualised systems, according to Diane Bryant, Intel executive vice president and general manager of its Data Center Group.

"The carriers are getting tremendous pressure to continue to build out that infrastructure to better support higher and higher data rates, [and] greater and greater demands," Bryant told ZDNet. "The network today is very expensive; demands far exceed their ability to support it in a cost-effective way, so they have got to start over and create a network infrastructure that is virtualised and can flux."

Citing the current low utilisation of equipment at the edge of the network, Bryant said telcos are looking to approach the utilisation rates that companies such as Google, Amazon, and Facebook enjoy.

"Those guys run their infrastructure at very, very high levels of utilisation -- 90 percent plus utilisation of their infrastructure at very low cost of operation -- so that the telcos are incredibly anxious to get off their current infrastructure, which is too expensive, and does force them to charge you more for your data than you would like to be charged because they are trying to get some kind of return on that capital investment.

"They want to get out of that model and get to a virtualised network."

Speaking from her experience as a former CIO of Intel, Bryant said that even as a priority customer, it would take two months for Intel to receive an increase in network capacity after it was requested.

"That's because it is a bunch of fixed function devices; they physically have to built that out," she said. "Once they go to a virtualised environment, the vision is for customer services on demand. I want capacity, it's a virtualised cloud environment, I get more capacity instantly. As an IT guy, I'm going to pay for that service."

The end result of such a network would be lower costs for users as carriers feel less need to recoup capital costs, Bryant said, with telcos able to prioritise traffic in an easier fashion.

"It just gives communications service providers so many knobs to turn and monetise that infrastructure, so the infrastructure isn't the limiter," she said.

During its keynote at Computex on Tuesday, Intel announced that it had signed a memorandum of understanding with Foxconn to develop virtualised infrastructure, and to conduct tests in the network of Foxconn subsidiary Asia Pacific Telecom.

Under the deal, Intel will provide Foxconn with reference designs, chipsets, software, and support across the areas of cloud radio access network hardware, 5G user equipment, mobile edge controller, and network function virtualisation.

The intention of the agreement is to help the push towards proper 5G networks.

For the residential network, Gregory Bryant, Intel general manager of Connected Home and Commercial Client, said on Tuesday that current home networks are not ready for the smart house.

"Today's wireless access points, nobody talks about it, they are great with one thing, maybe two things on the network," Bryant told ZDNet. "You got three, four, five, six, performance goes, it's terrible. A lot of people experience that, they just don't know why.

"Today's home network is not ready for the smart home of the near future -- the experience is not where it should be."

The company has said it expects 50 billion connected devices in four years' time, and that to get to such numbers, it expects 50 devices per household to be connected to the internet, a five-fold jump on the present number.

Intel also announced earlier this week its Broadwell-E family of processors.

Based on Xeon processors, the new extreme chips use Broadwell architecture rather than the newer Skylake architecture.

Topping the line-up is the 10-core Core i7 6950X, which arrives with a hefty $1,569 price tag, 25MB of cache, a 3GHz base clock speed, support for 4-channel DDR4-2400 memory, and 40 PCI-E lanes. The other processors in the line-up are the 8-core i7 6900K and 6-core i7 6850K and i7 6800K.

Meanwhile, on Wednesday at Computex, Intel competitor AMD unveiled a preview of its Zen architecture chips, which AMD is hailing as its return to high-performance desktops.

Computex concludes this weekend.

Disclosure: Chris Duckett attended Computex as a guest of Intel.

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