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How a Strategic Site Exit Ushers in Network Transformation

May 13, 2024
Why modernizing your network and upgrading equipment is essential to the future of your network and should not be delayed.

Maintaining old equipment can be inefficient, costly, and keep your network from evolving.

Many of today's data centers and communications service providers (CSPs) continue to operate network equipment that is outdated or nearing end-of-life.

Even as these network operators invest in next-generation technology, failure to deal with legacy infrastructure risks outages, rising operating costs and lost business due to poor service quality. As a result, these businesses soon begin to erode their competitive advantage and profit margins.

…for the typical telecoms network, energy costs make up 20 to 40% of operating expenditures.

In some cases, vacating under-utilized or outdated network sites can be the catalyst that enables these operators to realize significant business benefits in terms of reduced costs, increased sustainability, and digital transformation. But deciding to implement a network site exit is just the first step. Creating a strategic plan before getting started is key to laying the groundwork for success.

Know When to Go

When it comes to evaluating the future viability of a network site, the prevailing attitude for many operators may be to re-double their commitment to existing deployments. And that’s not surprising, given the typical business practice of squeezing the most value from every capital investment to maximize profits.

Yet, as legacy network architecture nears end-of-life, often the original manufacturer no longer supports this equipment with software updates and component upgrades. This outdated equipment becomes costly to maintain, and leaves CSPs and data center operators at risk of extended service outages and security breaches.

Older equipment also is larger than today’s architecture, occupying valuable floor space, consuming massive amounts of power and producing excessive heat. In fact, for the typical telecoms network, energy costs make up 20 to 40% of operating expenditures (OpEx).

Moreover, legacy components tend to be less efficient, routinely operating below their traffic capacity. As a result, the overall operating costs of legacy equipment are much higher, while delivering sub-par performance.

Why Not Wait?

Despite the downsides of operating outdated equipment, the prospect of network modernization can be daunting, often prompting network managers to perpetually delay upgrade projects.

However, rising operating costs are just one consideration when factoring the impact of legacy infrastructure on business profits. For many CSPs and data centers, failure to meet service level agreements (SLAs) due to frequent outages can lead to significant penalties and lost revenue.

Furthermore, operating inefficient legacy equipment drains energy resources, preventing network operators from meeting sustainability objectives. And in those locations where state and local governments have enacted various laws aimed at specific greenhouse gas reduction targets, the costs of non-compliance with emissions regulations can be considerable.

Network modernization presents significant opportunities to improve efficiency, reduce operating costs, save space, and conserve power, helping to decrease the network’s total cost of ownership (TCO).

Equally important, replacing legacy infrastructure empowers the digital transformation needed to deliver next-generation services, thereby improving competitive advantages. But first, network managers need to commit to moving forward and begin by creating a site exit or consolidation plan.

How to Get There

A site exit project often can be complex and challenging. Creating a comprehensive plan involves a frank assessment of the CSP or data center operator’s needs and future goals. The project details will largely depend on the project size and motivation.

Is it due to a desire to reduce building lease costs as part of a budget-reduction measure, or a network site consolidation effort? Perhaps the objective is to meet sustainability goals and emissions compliance, or a larger system-wide network modernization strategy.

In many cases, the decision to vacate a network site is driven by the need to eliminate unnecessary costs, particularly as growing competitive pressures mean doing more with fewer resources.

Reducing power consumption, reselling legacy equipment, reclaiming equipment spares, and giving up the lease on under-utilized real estate all provide opportunities to quickly realize savings.

Before beginning any site exit work, however, it’s important to define goals and expected outcomes. This will involve the process of collecting and analyzing data, including an analysis of regional traffic needs to ensure the best overall traffic consolidation strategy.

If more than one site is to be vacated, implementation can be performed either sequentially or in parallel once the traffic analysis is complete.

Watch Your Step

One of the most underestimated challenges of a site exit project begins with funding. Because the resulting cost savings may be spread across multiple internal stakeholders, such as facilities management, network operations and regulatory compliance, securing project funds typically requires visibility and approval among the highest level management decision makers.

In addition to funding and effective planning, access to the right tools is key to maximizing project success. With today’s automated tools powered by artificial intelligence, engineers can make use of optimization algorithms to reduce the amount of manual effort required in a modernization project, particularly when migrating live network traffic.

Furthermore, having an experienced partner also helps minimize risk and maximize profitability by advising additional ways to improve efficiency and reduce TCO.

Unleash Transformation

As today’s business relies more and more on digital performance, speed and agility, network modernization becomes ever more critical to enabling a new generation of services.

Knowing how and when to vacate under-utilized or outdated network sites enables CSPs and data center operators to reduce operating costs and service outages related to legacy equipment, as well as prepare to deliver profitable new services.

Ultimately, implementing a strategic site exit is an effective way to usher in a more prosperous phase of the network lifecycle.

About the Author

Dave Hawkins | Vice President of Broadband Systems Integration, Fujitsu

Dave Hawkins is Vice President of Broadband Systems Integration for Fujitsu. He is responsible for designing, deploying, and architecting innovative and reliable broadband networks. Dave has been with Fujitsu for over 24 years and has held a variety of roles in manufacturing, engineering, sales, and services. Prior to Fujitsu, he worked in development, engineering, and customer service at AT&T Consumer Products (formerly Western Electric). Dave is a graduate of the University of Missouri at Columbia, and the Naveen Jindal School of Management at UT Dallas.

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