Creating Society s Digital Era

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1 Creating Society s Digital Era Connecting Our Planet Sustainably A Huawei White Paper by John Frieslaar

2 TABLE OF CONTENT Executive Summary Telecommunication Trends The Growth of Information and Data Why Social Networks are important The value of Big DATA The 7 key elements of a Digital Society Platform Conclusion References About the Author

3 Executive Summary The era of BIG DATA is beginning to revolutionize society and our communications network, enabling us to rely more and more on data transparency to better managed our lifestyle. The industrial internet enabled by the rise of sensors and wired machines, commonly known as the Internet of Things (IoT), is capable of connecting across numerous interfaces in real time and sharing relevant data. The IoT's will enable real time understanding, of what we see and allow us to gain improved insights, thereby realising massive improvements. It is expected that during 2013 there will be a 30-50% additional data generated in addition to what was generated in the previous 12 months, with continuous growth predicted for the foreseeable future. At the same time the world is facing several critical issues, such as global warming or climate change; the need for improved resource management; the need to improve health care and education; along with a host of other concerns. All areas that need sustainable solutions or improvement, with specific targets already being established within certain country specific agendas up to It goes without saying that to achieve these goals or deliver improvements we will need to look at new ways of delivering these improvements. Everywhere SMARTV aluable Contextual Digital Society Platyorm Sustainable e Smart Education Global warming Future Internet Private Public Cloud Connected -government Resource management Environmental Resources Societal Change Personal Infrastructure Energy Efficient Buildings Green Transport Smart energy Innovation Etc. Smart living Smart transport Smart health The promise of telecommunications and the IoT, combined with the need to become more sustainable; while reducing our dependency on natural resources; and ensuring that access to advance applications such as e-education, e-health, e-government, etc. can be offered to all, is likely to result in wide spread innovation. 1

4 Whilst predictions about the future is very difficult, we believe that it is important to look at a number of past, present and future growth indicators or predictions to generate an awareness of future possibilities, and to work closely with our customers to deliver a clear vision of our combined future. This vision will allow us to develop a better understanding of the following: What access services will be seen as most valuable as the IoT's embraces new fixed and wireless technologies?; How are access trends expected to evolve over time?; and How do we optimise these interfaces to ensure they continue to remain effective and efficient, thereby reducing our impact and lowering costs? While being connected has its value, this connectivity also needs to be capable of offering services everywhere. By better understanding population demographics and traffic demand, we can work towards delivering more effective access solutions. This will mean developing new partnerships, partnerships that go beyond the traditional supplier or customer domains. Being connected will mean making services possible across a wider network, as new applications emerge, which are hosted on alternative networks. This will require the negotiation and development of new business solutions and technical interfaces to allow for the flow of critical data, all in a safe manner. Services are becoming SMART, with the deployment of more sensors and applications. The IoT's will demand in-built network capability that allows the implementation of new smart services capable of working across several domains to deliver improved insight. Smarter networks, made available everywhere, will result in more valuable service developments that are contextual, and able to improve the customer experience. We expect to see more service personalization as the network will become more entrenched in our daily lives. The cloud will soon become the core of a new age in society, the digital society, with storage, application hosting and service virtualization enabling the development of a new economy. Understanding how and where cloud services need to be situated will depend on closer ties with strategic partners. Sustainable solutions enabled by the IOT made available everywhere, using smart sensors, and the routing of data to towards hosted applications, will deliver contextual services from the cloud that will deliver value to consumers. It is with these initial thoughts that we at Huawei have developed the concept of the Digital Society Platform. We believe the time is now right to work on a wider base across our customers, suppliers and with potential partners to develop a platform that will allow 2

5 us to embrace our digital future to the benefit of society. We would welcome a deeper conversation with all who wish to collaborate on this important venture as we begin to realize the value and savings made possible from wider data transparency and the development of new digital services. Telecommunication Trends Attempting to predict the future trends in telecommunications is difficult, with many theories such as systems thinking1 and scenario analysis2 being employed. Whichever theory you choose to use it will need to be supported by qualitative and/or quantitative analysis, informed by the relevant data that is based on either predictions, Mega-trends3,4, forecasting5 or life cycle analysis6 to name but a few. Yet others say that the best way to predict the future is to go out and develop it for yourself, by making it happen, this carries the risk that it may not be attractive enough to others. At Huawei we believe in co-creating the future with our customers, sharing of our insights and ideas to develop a combined future that we can all believe in, as a future supported by all will have a greater chance of success than one built in isolation. Innovation is currently a global theme7, with many countries and societies, all betting on innovating their way out of the current economic crisis. During the past few decades we have see the introduction and passing of several important products and solutions (see diagram 1), all of which at one time benefited from new important technology enablers, with all being rapidly superseded by further technology improvements. Three key trends have driven the rapid progress and adoption of new products and solutions. 1. More effective consolidation, with several legacy products bundled within one device; 2. Increased efficiency and form factor, with improved resource utilization, lower energy consumption and improved functionality; 3. Dematerialisation of legacy stand-alone products, now available as software applications; often bundled within a common platform; or available as a low cost download option. 3

6 These trends are set to increase even faster, resulting in more rapid changes and business disruption, as the deployment of new technologies such as cloud computing and broadband mobility becomes the new worldwide norm. Innovation leads to more effective solutions Technological advancement has led to many old or existing solutions being r e-engineer ed, with many legacy items being consolidated into fewer devices More effective devices are more energy efficient Dematerialisation Diagram 1 Changing technology trends Having analyzed many of the top trends and various predictions from around the world, (cross-referenced with key drivers) we believe the following trends will play a big part in the development of the information and communications technology market for the next 3 to 5 years. Recognizing that various parts of the world are in different stages of progress. 1. The build out and growth of the Internet of Things 2. Increased mobile device innovation and adoption 3. The build-out of a truly high-speed smart broadband network 4. Data centre proliferation moving us towards IT everywhere 5. BIG Data and Analytics becoming pervasive, uncovering hidden value 6. Growth in social and enterprise applications 7. Access from anywhere and anytime to any content 8. The development of the smart home 9. Secure networking across platforms 10. Technology becomes smart and invisible 4

7 The Growth of Information and Data Growth in Internet traffic is set to explode during the next decade, as we embrace the value derived from data and develop into a more intelligent economy. A number of studies28, 29 reinforce industry views of exponential data growth, with some predictions claiming a 4300% growth in data by Operators will need to develop their networks to accommodate this huge volume of data traffic, much of which is expected to be mobile data, or in remote regions, where there may be limited fixed line infrastructure to support the backhaul of the data. Connected Communications Social Internet Internet of Things A number of trends will converge as data growth drives the shape and configuration of our networks, these being: Mobile data growth will surpass fixed line data traffic, as the preferred access method. Fixed line traffic will grow slower than mobile, with cloud computing reinforcing the trend towards mobile computing. Base stations or access points move closer to the end consumers as the demand for more mobile or fixed broadband capacity increases. The last mile between network access and the consumer will reduce, as higher bandwidth demand fills up the available spectrum or demand higher bandwidth fixed line access points. The number of base stations will increase as demand for capacity outstrips supply, leading to the deployment of more small cells, or Heterogeneous31 networks. Energy costs will increase; requiring operators to consider energy supply, a small growth in energy demand for connectivity will result in greater energy savings in associated industries. 5

8 Growth in data traffic is likely to put pressure on operators to find amicable solutions, where partnerships with industry lead to new business models, with concepts like SMART ARPU, revenue sharing and infrastructure as a service used to improve profitability. Data Demand Base stations sites move closer to the end consumer Last Mile distance is reduced over time And Number of base stations increase over time 84% CAGR 34% CAGR Energy Costs Rise Huawei Research 2012 Wireless Fixed Data services expected to play a significant part in the growth of data traffic include the following: SMART metering, whether for electricity, water, gas or any other entity that can benefit from an online metering system to predict trends in supply and demand. Connected health care, leading to better quality care, remote monitoring and diagnoses, a connected national health care scheme, better productivity and work flow and better patient care with improved information to name but a few. Traffic monitoring and shaping, whether this be road, rail or air travel. Connected data and information exploitation will lead to significant savings in time, money and effort, leading to gains in sustainability, process improvements and innovation from new insights. We are at the beginning of a new era of connected intelligence. Why Social Networks are important Social networks have become pervasive, with the growth of sites such as Twitter, Facebook, LinkedIn and Pinterest to name but a few, but why are these sites important to society and howcan they help business grow? Studies of sociology point to the importance 6

9 of social capital and highlight the importance of collective or economic benefits, which will be derived from preferential treatment and cooperation between individuals and groups. Social platforms are only just beginning to use the data collected to develop new services, the result of being part of the connected social world. Facebook seen as the biggest social site on the Internet has currently in excess of one billion users (as of October 2012), with revenues in excess of $1.26 billion, a social company that has only been in existence for a mere eight years, being founded in Currently Facebook is focused on people, however there is already indications that the Internet of Things will drive a very different type of social web site in the future, with the addition of important sites, places and attractions, one can see how this will become an important part of education and tourism. There is evidence that social web sites will change as new services emerge, which will affect how networks are implemented and managed. Businesses are consolidating their social media platforms on the Internet, with high-quality interaction, including innovation and feedback. A move from text and graphic social networks, to those dominated by photo (Facebook the world's largest online photo repository) towards video (YouTube the largest Internet source of videos). Social platforms begin working in real time as the need to be agile and creative become important to brand strategy. New applications will exploit a wealth of content, not all personal, but many based on sensors and feedback devices as part of the Internet of Things (IoT). Analytic solutions will exploit the IoT and generate new insight. Real time video production, using a global production team, for education and business. Increasing numbers of social players as the Internet grows to 50 billion or more users and devices, as new services proliferate. The ongoing importance of social platforms in driving up the data traffic across our networks, as a self reinforcing spiral of growth, driven by the need to find or relate value in everything that can benefit from being connected. 7

10 The value of Big DATA BIG Data, estimated to be worth approximately USD $16 billion by Big Data Global Market Volume in Mio.C BIG Data is everywhere. Our actions lead to specific patterns, capable of becoming transparent by analytics, which could lead to improved value, highlighting how subtle or significant changes to processes and procedures could generate value. Data and information captured by enterprise, industry or government, combined with social networks and the development of the IoT will fuel exponential data growth for the foreseeable future, demanding more knowledge and understanding Source:Experton Group 2012 BIG Data benefits include the following: Tracking and mapping of energy flows, supporting optimisation, leading to less waste. Reducing energy consumption will also lead to savings and reduced carbon emissions. Tracking, mapping and understanding traffic flows, to guide emergency vehicles, support better road building, and improve coordination between different forms of travel BIG Data will be realised by exploiting the intelligence within our networks, by embedding smart applications in cloud services, and by examining or databases using analytic tools, to become the workhorse of the IT economy, with opportunities for the service provider community being virtually endless. Small business platforms in the cloud, lowering the barriers to entry for new start-up's; providing an alternative to those companies wanting to bring their IT under centralised control; managing centralised software applications and updates; supported by storage and business continuity planning, or providing customers with the ability to develop insightful reports based on self tunable analytic tools. SMART personal services, with customers gaining insight into their usage patterns. Developing reports on usage and making recommendations to reduce costs and optimise customer's user profiles. Trend analysis over time, providing real time reports on for example the current status of a nation's health, giving regions the ability to fast track potentially dangerous virus outbreaks, thereby enabling faster support and containment. Identification of demand and usage patterns, such as electricity, water and gas by using smart metering, and analysis to ensure systems are running in an efficient manner. 8

11 Data, or more importantly the insights gained from data will become critical to industry and business, key to competition and growth becoming important factors of production and operations, alongside labor and capital. The telecommunications service provider industry is in a unique position to develop and offer these services as an expansion of their current communications infrastructure, augmented by cloud based applications and storage solutions. The 7 key elements of a Digital Society Platform Having considered the drivers that are likely to shape our future networks and the societal demands that we are likely to face in the future we have developed the concept of the Digital Society Platform. The platform is based on seven key elements that we believe are essential and that broadly captures the needs of our digital era. Below we raise a number of thoughts to highlight the importance of each of these key elements. Cloud Business Cloud Sustainable Everywhere Support Cloud IDC Cloud Service Platform Data Center SMARTV aluable SMART Contextual Contextual Cloud Digital Society Platyorm Connected Sustainable A Network of Connected Possibilities Connected superbb IP+Optical NG-CDN (FTTx) Ubblquitous BB (HSPA/LTE) Individual Valuable Institutions Everywhere Devices A host of new services will emerge based on data transparency, which when combined with other services will allow new value to be realised and commercialised, e.g. smart metering, improves our understanding of power use, and supports improved supply and demand analysis. 9

12 The IoT is likely to generate additional demand in places not considered as traditional networking, e.g. a widely accessible wireless e-health or online medical service offered in countries with limited infrastructure. However, the service is likely to require the collaborating of several industries to make the business case work. As value is realised, more and more industries will exploit the capabilities of the network, driving demand deeper into the far reaches of the network, with service becoming available everywhere. Valued smart networks will need to understand the way in which people connect, including the partnership model that is likely to deliver the most value. Connectivity will be at the heart of smart cities and any other smart services. Connected service, are going to have to understand how they can most effectively exploit their own data or content most efficiently for maximum return across a connected network of providers. The growth of SMART services is likely to enable further SMART services, driving up the potential of cloud-based services. As we move into a society that is increasingly money rich and time poor, people will be looking to develop on-line solutions to the mundane functions that form part of their daily lives, further driving up the demand for smart time saving applications, with demand to automate several functions in an attempt to reduce human error. Contextual services or personalized services will exploit relevant network data and consumer information, enabling the portability of specific user services as well as the development new services based on user location, and preference. Contextual services could be as simple as a user deciding to purchase an additional data throughput capacity for streaming a movie, or as complex as using the network to develop personal services based on user behavior patterns. The Cloud will become the foundation of the world economy as globally more businesses and enterprises begin to realize the flexibility and savings offered by placing services in the cloud. The cloud will support the development of products with a smaller form factor, offering improved battery life and functionality, while exploiting the capabilities of the cloud to supply the storage, processing, virtualization, applications and content. Cloud has the capability to reduce costs in several areas and to lower our environmental impact. Finally, we believe that the network will be a key element in sustainable services, or services that help consumers become more sustainable, smart cities and smart metering are just two well-known examples. The services we see as key to sustainability relate to the way we can make our world a better place by reducing our impact on the environment, reducing climate change and managing our resources. Sustainable services also relate to the adoption of several online services, making it easier to supply citizens with e-health car, e-education and e-public services, as just a few examples. Huawei believe that these key elements as described about are and will be the key network elements that network will need to support for the foreseeable future. Huawei has worked with several operators to balance the network needs in these seven dimensions and would welcome the opportunity to develop solutions that support your business. 10

13 Conclusion As with most industries the key to any new product or service development is grounded in using future gazing techniques productively for shaping the future, this requires one to obtain the best information today in order to predict the most likely range of possible futures. It is about taking actions today that will allow one to navigate towards a possible future that will underpin your core business values, without being trapped in short-term thinking. Service providers need to broaden their thinking about the many possible worlds they will encounter tomorrow, and how they will embrace the opportunity to deliver solutions that will resolve or lead to resolutions in our global future challenges. These challenges are largely social and relate to issues such as peak oil, peak water, climate change, resource depletion, food shortages, ageing populations, medical, education and the shaping of new laws and policies that are acceptable to significant proportions of population The seven key functions that will drive the development of next generation networks are valuable services, which are deployed everywhere, being connected to smart services that account for context, while using the cloud to help deliver sustainable solutions. The Digital Society Platform needs to meet the needs of society by adding value in our lives, today and in the future, making what matters most... better. References Telecommunication Trends

14 medium=nl&utm_source=internal Networking_Solutions_White_Paper.html

15 About the Author Managing Principal Consultant, Huawei John Frieslaar joined Huawei in 2003 as a Chief Technology Officer, where he has been involved with several projects related to Broadband and Network Transformation, the most notable being with BT on the 21cn project. Since then John has been involved with several customers around the world, supporting projects in the areas of voice and data communications, security, environmental management, marketing and innovation. John Garret Frieslaar Prior to joining Huawei John worked as a Bell Labs Field Engineer developing strategy and concepts around new innovative technologies. John has built up a portfolio of experience in the areas of strategy development, operations management, solutions marketing, new product development, consultancy and sales. 13

16 This document is a production of the Huawei Business Consultancy team, who work as a leading advisory team to our customers, developing propositions and proposals on a global basis, as well as within our own business. The purpose of this and our additional series of thought leadership documents is to share with you our views and experience either from a generic perspective or within a particular area of interest. The idea being that by sharing and developing the discussion together we will benefit from enhanced perspectives to grow our business in a more successful manner. We would welcome additional engagement with you to share our ideas, experience and capabilities as a leading supplier of products and market solutions in the field of Information and Communications Technology.

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