Product Licensing in 5G - Challenging the Status Quo
Updated: Jan 23, 2019
As we inch closer to 5G core procurement orders, licensing models (offered by Telecom vendors) are evolving way slower than product offerings. We have discussed this briefly as part of Go-to-market for 5G and as part of this blog, we discuss licensing in more detail.
Subscription based licensing (dimensioned for the subscriber, session, and transaction) model has dominated telecom procurement for decades. Dimensioning of software licensing was necessary because of the limitation of HW resources. With Operator bringing in his own hardware for NFV and private/enterprise cloud deployments, that constraint goes away. The shift from Pay-Per-Product to Subscriptions based was inevitable with virtualization (NFV), however, 5G seems to have pushed the envelope further.
For the cloud-native environment in 5G Core, all vendors are using open-source software components for auxiliary services. None of these software licenses have the complexity that Telecom vendors are used to. Open-source software companies have simple licensing models that offer option to either go with the community(free, limited feature version) or enterprise (additional feature, better SLA and feature prioritization) license. It's entirely possible that Operators may expect a similar licensing from telecom vendors?
With most Tier-1operators working to build their own cloud-native environments, Operators already have the complexity of ensuring such negotiations are covering all open-source tech. Lengthy negotiations for 3GPP defined services will only result in lose-all situation. Instead, we suggest exploring other licensing models i.e - Unlimited License Agreement (ULA) and Perpetual License Agreement. Listed below is a brief list of considerations for all the three licensing models. Catenna recommends both vendors and Operators to consider ULA for 5G.
Also, Vendors are starting to offer a variety of services apart from the core telecom products. These services include hosting environment, platform infrastructure services using 3rd party software, and enterprise-specific Line-of-business applications. The existing subscription-based licensing model might be highly inadequate to handle such offerings.
Licensing may not be the most important topic in 5G today but we believe it would be key to vendor's winning strategy !!