Softswitch Migration Options in the Cloud Era
As VoIP 1.0 softswitches near end-of-life, service providers face decisions on how to evolve their voice networks to be more agile, competitive, and profitable. There's a softswitch migration coming, so what are the replacement options? What is the role of the cloud-based vs cloud-building solutions?
Only a fraction of these vendors remain in business today. Some of their technology may might live on in a data center or central office somewhere, but not for much longer.
Many switches have become obsolete but still support significant revenue streams for voice—and that's risky. Service providers using outdated equipment risk service disruptions and declining sales due to:
- Lack of innovation - Service providers must keep pace with innovation to meet market demand for new UC and collaboration solutions and win business customers. Plus, they need to keep up with new regulations like Kari's Law or TRACED Act.
- Lack of support - Some vendors have gone out of business or no longer support older equipment. As systems are discontinued or reach the end of their lifecycles, the systems will no longer have vendor technical support and the supply of replacement parts or spares will eventually be depleted.
- Lack of expertise - As personnel retire, service providers may have a hard time finding suitable replacements with the expertise needed to run their network and face significant costs to either retain those employees or pay significant costs to train someone new.
Plus, as network gear ages, component and system failure rates increase as products near the end of their lifecycle.And if there are still Class-5 TDM switches in the network, the cost per subscriber will continue to rise due to fixed operational costs and legacy voice customer turnover. A Yankee Group study predicted a 100% increase in the average cost per user on TDM technology between 2014 and 2020.
Voice Still Matters
There are over 100 million wireline phones in the U.S. today, and VoIP continues to grow even as legacy phone service decline. Since 2013, VoIP lines have grown 39% to become the majority of wireline connections! Residential VoIP remains a lucrative market with strong margins, and business cloud communications are growing fast and with no sign of slowing down. Read more in our blog post The State of Wireline Phone and VoIP in the U.S.
Given the revenue at stake and the aging network infrastructure, now is the time to draw up new technology road maps.
We generally see four softswitch replacement options for service providers for their next-gen voice network:
1. Deploy Next Gen Hardware
Some vendors have replaced the original propriety hardware with an ACTA chassis, which is essentially building a network and making a switch migration all over again. You'll likely repeat this decision in another 5-8 years as the hardware platform makes it way towards obsolescence.
2. Virtualize/Go Cloud Native
Deploy vendor software on off-the-shelf servers or public cloud platforms. The buzz words here are “network functions virtualization (NFV)” and “cloud native.”
Most traditional softswitch vendors have a virtualized offering. Some VoIP network elements are being virtualized by vendors today and others are still in development, so it will be some time before a network can be fully virtualized. This approach is a repeat of the traditional business model requiring CAPEX and a combination of fixed and variable OPEX. We've written about the challenges of NFV VoIP over the years, but many large providers will likely pursue a variation of this path.
Learn more in Two Paths to NFV VoIP: Building and Cloud Sourcing.
3. Switch Sharing
Consolidate switches into a single piece of equipment with a neighboring provider(s)/where they can share the excess capacity on the system.
This short-term tactic for ILECs, buys some time and aims to reduce cost, but doesn't bring about innovation or remove risks. There's great analysis from Award Consulting in the blog post Switch consolidation: a perfect union or the road to perdition?
4. Migrate to a Cloud Communication Platform
As retail communications and IT functions move to cloud delivery models, service providers are following suit by adopting web-scale, cloud-native platforms to power new services and replace aging, obsolete voice networks.
This is cloud sourcing, not cloud building. Service providers can use a software-as-a-service solution, like Alianza, to deliver a flexible, branded suite of residential and business cloud communication services. While it may look similar to a white-label softswitch solution, it’s quite a bit different. See Why the Cloud Is Better Than Wholesale Hosted VoIP to learn more.
You don’t have to choose just one path. Some service providers may choose to temporarily rebuild or Band-Aid their network with new hardware. Some make use a cap-and-grow approach, leaving old platforms in place and use a new technology option to enable their growth. While others choose to rebuild their network with cloud-native software for the traditional footprint and use cloud communication platforms to expand their markets or new service launches.
How are you planning to replace your softswitches? We think your approach should be to leverage the cloud, not build one.
Alianza started in the cloud and designed the world's first true SaaS purpose-built solution for service providers. Today we have over 70 service providers and 300,000 seats on the platform.