When I joined the telecommunications bandwagon, almost 50 years ago, I started to work in the "central office". That was the name of the electromechanical switch at the time. It was huge, hundreds of square metres. Over these years I saw the progressive shrinking in size, first with the shift to electronics switches (SPC - Storage Program Control) which cut the size at least 50% and then with the shift to routers, bridges and switches that reduced the "central office" to a few refrigerators sized racks.
Now even this incredibly small equipment is on the way to shrink even further, to the size of a chip, that you can comfortably hold in the palm of your hand. Actually, most of the switch is transformed into software, and software, basically, has no size at all!
This is what I get from the announcement made by AT&T of the successful trial of a white box switch. A white box switch is an open software system that runs on commercial hardware using an open network operating system that can run on a variety of chips from several manufacturers. The trial was "live", it run in the real network providing services to paying customers, it was not an experiment in the lab.
The "softwarization" of the network is progressing even faster than it was expected. According to AT&T 34% of their network functionalities run on software (with software defined network, SDN) at the end of 2016 and they expect this to reach 55% at the end of 2017 with 3/4 of functionalities becoming software controlled by 2020.
For an Operator like AT&T this means decreasing their procurement cost (since they can tap on a wider slate of commercially available products with a faster evolution cycle and lower cost) and increasing the flexibility in the use of resources, which further decreases their operational cost and improve the quality of service to their clients.
Of course not everyone is a winner. Telecom Manufacturers are being hit by this shift, even though most of them have scrambled to provide SDN enabled equipment and are trying to shift their biz models from hardware sellers to service sellers. It is no rocket science to understand that when someone is paying less someone else is going to make less money...
This lowering of cost, however, will eventually threaten the Operators as well. Since less capital expenditure is required to set up a network there will be lower entrance barrier and more players will come to eat at the same table where are sitting today's Telecom Operators. Expect this happening soon, most likely in synch with 5G deployment.
