Is it just me, or does it feel like telco made a strong move towards the public cloud this past quarter?
During Q2 we saw some big announcements: DISH partnership with AWS, AT&T with Azure and Bell Canada with Google Cloud. What’s important to note is that these aren’t the same ol’ same ol’ hand-wavy announcements of “strategic partnerships” (which believe me, are easy to do, that’s why everyone does them); these announcements each show that carriers are starting to move serious workloads to the public cloud.
Let’s start with the big kahuna, DISH. In April, it made a shocking announcement (read AvidThink’s breakdown here) that it was putting its 5G core on AWS. Not only that, it plans to use AWS Outposts with AWS Wavelength at the edge, going live with Las Vegas in 2021 and projecting the entire 5G network will be built for $10B. As far as TelcoDR knows, this is the most public cloud-forward network out there. Supposedly, almost all vendors selected had to meet the requirement of being “cloud native.” (If you listen to my Telco in 20 podcast, you know that means different things to different people.) We shall see if it’s put together a winning combination to keep costs low, move CAPEX/OPEX onto Amazon, and create the opportunity to deliver great service at a low price. Charlie does a great earnings call and takes a lot of good questions, so check out the call scheduled for August 9.
Next up was the news in early June that AT&T is working with Microsoft Azure on edge computing capabilities. The partnership between AT&T and Azure is not new; that was announced quite generically back in 2019. But in this announcement, Microsoft is acquiring AT&T’s network cloud in a deal that includes IP, talent, and assets. Microsoft will spend the next three years moving workloads to Azure as it adds technical know-how to its Azure for Operators offering, which includes the Metaswitch and Affirmed acquisitions that happened in 2020. In return, AT&T will get cost savings, reduced CAPEX/OPEX, and speed to market as it adopts Microsoft services around AI and analytics. This deal shows that Azure’s not going to stand by while AWS runs a few telco laps; it is here to play and it is spending what I have to assume is serious bank in order to compete.
But hey, not so fast, says Thomas Kurian over at Google Cloud. Also in June, Bell Canada announced it was moving its critical workload and apps to Google Cloud and tapping the hyperscaler for data analytics, AI, capacity planning, service assurance (and more). What’s interesting about this announcement is the inclusion of Anthos in the release. I don’t know if that’s because Google’s really trying to push its Anthos offering and threw it into the press release (back in 2019, it was a big focus for Google) or if it mentioned it because Bell Canada’s workloads will run on Bell’s private cloud on premise. (Anthos is like AWS’s Outposts offering (see link above), giving you access to GCP on premise and managed by GCP. Only a BIG difference is that AWS provides and manages the hardware, and Google does not.) If you know the answer to my question, please HMU on Twitter or LinkedIn and let me know – I’m genuinely curious. At any rate, this deal shows that while Google may be in third place, it is not going down without a fight.
Moving workloads to the public cloud doesn’t mean you’re giving up on innovation. It means you’re giving up on managing tasks that don’t differentiate one telco from another (they may have in the 90s, but not anymore). In this day and age – with the hyperscalers giving anyone access to their tech and charging for it by the minute/API call/storage space – telcos need to understand that IF and WHEN their competitors start to use this tech in their businesses, the savings, speed to market, and focus on customer may be too much to overcome. Better get going now; it’s better to be first rather than last.
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