Over the past two decades, the telecom industry has been building successful networks with high profitability; however, with rapid changes in technology, telecom companies are looking for new ways to remain viable.

Saar Gillai, senior VP and GM of the Network Functions Virtualization (NFV) business unit for Hewlett Packard Enterprise Co. (HPE), joined John Furrier and Dave Vellante, cohosts of theCUBE, from the SiliconANGLE Media team, during HPE Discover 2015 in Longon  to talk about the challenges and solutions for the future of telecom.

The HPE and telecom relationship

The split of HP into HP, Inc. and HPE has enabled the company to reorganize assets under one roof, combining the company’s strengths in IT and telecom through its carrier Software-Defined Network (SDN) and NFV efforts, as well as the Communication and Medium Solutions group.

“From a market perspective, we at HP see the convergence of telecom and IT as a big opportunity for HP because we have both the strength in IT and private cloud … but we also have a big telecom pedigree in our CMS portfolio [HP’s Communications & Media Solutions],” said Gillai. “You probably can’t make a telephone call in the U.S. without using our systems.”

Coping with a profitability shift

Gillai explained how the telecom and carrier space has been building successful and profitable networks over the past 20 years. Now the revenue stream has shifted to the over-the-top players who are taking away profits while taxing the network providers for more capacity.

The good news, according to Gillai, is that the cloud provides a new model of how to do things in terms of virtualization and cloudification of infrastructure that allows a much more automated and dynamic environment. Most networks were built before the current technology existed, so in order to transform the network the company must pick and choose from what’s available while leveraging them to provide better services and new revenue streams.

The transformation journey

Gillai explained that the journey will take place in four areas. He said the first part is decoupling separating hardware from software, which will offer unlimited benefits. Secondly, virtualization will allow Telcos to run in multiple environments to ensure bandwidth. Next cloudification enables the ability to move resource pools and create horizontal apps. And the final step is decomposition – allowing the provider to offer full micro services.

Watch the full interview below, and be sure to check out more of SiliconANGLE and theCUBE’s coverage of HPE Discover 2015 — London. And join in on the conversation by CrowdChatting live with theCUBE hosts during the event.

Photo by SiliconANGLE