Transforming Telcos: A New Era of Infrastructure Assessment

Transforming telcos are reassessing their infrastructure platforms and transformation strategies—both technically and in terms of their broader impact. The commercial tools and platforms available are maturing, enabling this shift from fixed models to dynamic DevOps environments. The level of change is significant, affecting procurement, functionality, operations, and total cost of ownership (TCO). While direct costs remain a key concern, the projected indirect costs of toolsets and operations are becoming equally important factors.

Understanding the Costs of Infrastructure Transformation

The indirect costs of moving infrastructure are substantial. These include changes to workflows, skill sets, operational monitoring tools, reformatting information, and monitoring feeds. While PaaS and CaaS tools help simplify the process, mobile network operators (MNOs) need these tools to evolve as their own expertise grows. As transformation progresses, these tools become widely understood and trusted, often forming the standard platform for larger organizations. This reliance further cements the role of PaaS and CaaS providers.

VMware’s Market Leadership and Broadcom’s Impact

In the telecom sector, VMware is a leader in transformational infrastructure and tools. However, its acquisition by Broadcom has introduced changes to pricing, packaging, and licensing terms, prompting customers to reassess short-term costs and long-term value. Reported cost increases have been significant^[1][2]. For instance, support subscriptions now reflect a reduction in CPU core counts from 32 to 16, impacting pricing. Broadcom has emphasized the value of inclusive support and innovation. In March 2024, Broadcom CEO Tock Han addressed customer concerns, stating, “These changes aim to innovate faster, meet customer needs more effectively, and simplify doing business with us.” Later, in 2024^[5], he highlighted the private cloud as “the platform to drive business and innovation,” while acknowledging the challenges faced by customers.

Key Changes in VMware’s Product Offering

The primary products driving change are VMware Cloud Foundation (VCF) and vSphere Foundation (VSF). VCF integrates vSphere, vSAN, NSX, and the Aria Suite for monitoring. While these combined capabilities are market-leading, they are no longer available as standalone products. This shift has prompted traditionally risk-averse telecom organizations to explore alternative vendors, evaluate transformation costs, and reconsider single-vendor dependency.

Exploring Alternatives: Red Hat and Bare Metal

Customers are now assessing software suitability for transformation, identifying the right path forward, and comparing costs. Hyper-converged infrastructure (HCI) and containers are emerging as leading alternatives. One option is Red Hat Hyper Converged Infrastructure from IBM, which offers flexibility but requires internal teams to replicate some VMware features. With VMware’s pricing changes, the total cost of transformation—regardless of platform—continues to be reevaluated. Groups like NGMN^[3] have called for increased openness and interoperability to avoid vendor lock-in and tool sprawl.

Another approach is to remain on bare-metal infrastructure, balancing performance and long-term costs against hybrid cloud flexibility. Many organizations are adopting hybrid strategies—delaying some changes on bare metal, moving others to open environments, and retaining some on VMware.

Market Response and the Road Ahead

As with any major pricing or packaging change, the market is reacting. Preliminary data from late 2024 indicates positive results for VMware, with costs down and margins up significantly^[4]. Broadcom’s focus on its top 500 customers (down from 2,000) and the resolution of the AT&T lawsuit over support arrangements are notable milestones.

In 2025, telecom organizations are expected to continue evaluating infrastructure options, considering second suppliers, and developing internal expertise. This trend underscores the need for software providers like Enea to minimize dependencies and remain adaptable to infrastructure changes.

Enea’s Role in Supporting Transformation

Enea offers tools to manage 4G and 5G data access across physical and virtualized environments.

Learn more at https://www.enea.com/solutions/traffic-management/.