Regular readers of this blog will remember a blogpost in 2021 https://www.vamsitalkstech.com/5g/six-areas-where-hyperscalers-telcos-should-collaborate-in-2021/ where I discussed six areas of collaboration for hyperscalers (such as AWS) and telecommunications companies (telcos). These were around the delivery of 5G services and consumer use cases. In a sign that the industry is moving towards this vision, IDC just published a report where they reiterated the same message.
Why Telcos Need to go Cloud Native
The above blogpost has a few key themes..
- 5G Transformation: 5G technology is expected to bring significant improvements in bandwidth and latency, enabling various business applications like AR/VR and high-resolution gaming.
- Shift Towards Software-Defined Industry: 5G is accelerating the telecom industry’s transformation into a software-defined industry, with a shift from monolithic, logic-based functions to service-oriented, cloud-deployable network functions (NFs).
- Competition and Collaboration: Hyperscale cloud providers like AWS are both collaborating and competing with telecom service providers in cloud-based infrastructure projects.
- Areas of Collaboration: Both hyperscale cloud providers and telecoms can collaborate in areas such as unified IT experiences, self-service provisioning, DevOps adoption, NFV and SDN support, mobile private networks, and edge services.
- Unified IT Experience: Telcos should adopt cloud-native network functions and microservices frameworks, providing unified management tools for OSS and BSS systems, along with automation.
- Self-Service: Telcos should enable self-service provisioning of network functions and services using cloud platforms and orchestrators like Kubernetes.
- DevOps Adoption: Telcos need to embrace agile development cultures, and hyperscale providers can assist in providing managed DevOps platforms, training, and fostering collaboration.
- NFV and SDN: Cloud providers offer support for NFV deployments with low-latency features, while 5G’s separation of User Plane and Control Plane enables decentralized deployments.
- Mobile Private Networks: 5G enables the creation of mobile private networks, offering enterprises greater control over Quality of Service (QoS).
- Edge Services: The intersection of 5G and public cloud occurs at the network edge, where cloud providers offer edge services attractive to telcos.
- Assets and Competition: Telcos bring assets like network infrastructure and domain expertise, while hyperscale providers offer cloud platforms and value-added services.
- Value-Added Services: Telcos should not just provide connectivity but also value-added services, making them ideal partners for hyperscale cloud providers.
- Collaboration Opportunities: Telcos and hyperscale providers are likely to collaborate more in the B2B market, offering services around private mobile networks, revenue sharing, joint marketing, and go-to-market strategies in the 5G era.
The IDC Report found here discusses the perspective of telecom service providers on their preferred partners in the context of digital transformation. It highlights that telecom service providers are increasingly viewing cloud service providers (CSPs) like AWS as valuable partners due to their expertise in cloud solutions. CSPs are seen as contributors to revenue generation by leveraging their enterprise applications and edge service capabilities alongside telecom service providers’ connectivity services. The article also notes that the perception of CSPs as competitive threats is diminishing, and AWS is particularly favored among telecom service providers as a cloud provider for collaboration.
Key Themes From the IDC Report
Telecommunication Service Providers (Telco SPs) are actively engaging in a strategic shift, relocating their corporate functionalities, information technology infrastructure, and communication network operations to cloud-based environments. This strategic move has notably positioned Cloud Service Providers (CSPs) as preferred partners, primarily due to CSPs’ specialized expertise in the development and operation of cloud-based solutions.
CSPs, exemplified by industry giants like AWS, Azure, and Google Cloud, offer Telco SPs a distinctive advantage in revenue generation. These CSPs maintain extensive catalogs of enterprise applications and possess advanced edge service capabilities, which can be seamlessly integrated with Telco SPs’ connectivity services. Such integration paves the way for the creation of innovative revenue streams.
The conventional perception of Telco SPs viewing cloud service providers as mere competitors is gradually dissipating. While Telco SPs continue to collaborate with other categories of partners, such as software companies and network equipment vendors, it is noteworthy that these partners often lack the expansive reach and capabilities exhibited by CSPs in supporting comprehensive corporate-wide transformation initiatives.
Conclusion
Notably, this marks the second consecutive year in which Amazon Web Services (AWS) has been prominently cited by Telco SPs as the preferred cloud provider with whom they are actively engaged or planning to collaborate in the near future.
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