Will open source software and commodity hardware spark a telecom revolution?

Is it time for new a seed change in Telecom? A very big part of the bloated cost of providing service is rooted in the use of proprietary systems. With open source software running on off the shelf commodity hardware costs in terms of both acquisition and operation can be dramatically reduced.

The overarching vision for open-source telecom is to enable telecom economics that are more in-line with web economics. For web-based businesses, massive use of open-source software and COTS hardware has enabled advertising-supported business models that provide truly disruptive services to the end user: free email, free videos, free storage and processing power, and so on.

From these fundamental businesses, services proliferate and innovation gets turbo-charged. By contrast, today’s telecom vendors rely on business models that drive up end-user prices using inflexible, proprietary and expensive components to support lofty product margins. In the world of web economics built on open-source software, this model is destined to break.

Embracing open-source telecom starts with the core assumption that the telecom market is not inherently different than the numerous other markets served by open-source software. While proprietary telecom vendors have spent decades on software and have convinced some that their algorithms are more sophisticated and performance-sensitive that those of other markets, I question that theory. Linux — an entire operating system that runs a multitude of complex applications and algorithms and supports numerous devices — is open-source software. MySQL — a complex database behind countless web transactions — is open-source software. And these are just two examples in a sea of complex open-source software systems available today.

Are the proprietary vendors foolish enough to think that the market believes the software algorithms in telecom equipment are more complicated than an entire operating system or database system? As evidenced by examples such as Asterisk, Snort, and Quagga, if done correctly, open-source software can be built to handle the complex algorithms for telecom markets.

Another principle driving open-source telecom is the belief that the performance of COTS hardware is sufficient for a large portion of the telecom market. Using COTS hardware and open-source software for telecom does limit the total available market; it is clearly not feasible for the highest end of the market (such as a service provider’s core router network) nor for the lowest end of the market, which requires limited functionality and sees very high volumes (such as the small-office home-office devices sold by vendors such as Netgear and DLink).

However, for everything in between, the combination of open-source software and COTS hardware perfectly hits the mark – using Intel-based processors and associated hardware ecosystem provides more than adequate performance at web economics prices and only promises further performance in the near future. For example, in the open-source networking market in which Vyatta, a company which I helped co-found, operates, there are multiple ways to make telecom economics more like web economics. While proprietary vendors charge $3,500 for one gigabyte of memory in their proprietary systems, the COTS hardware equivalent memory is less than $100. (from Ostatic)

It’s almost certain the Duopoly members will not take advantage of Open Source as the suits will stay with high cost proprietary systems to the bitter end. That leaves a huge opening for smaller players who are already disrupting the market in a very positive way.