Service Providers Who Don’t Adopt Cloud Will Die

Tim Harrison Director, Office of the CTO Published 1 Sep 2021

Predictions are tricky things.  Most of us can offer a prediction on anything, and everyone forgets about it within a short period of time.  If a prediction doesn’t come to pass, there are so many ways to weasel out of it.  However, if your prophecy does comes to pass, no matter how loosely interpreted, you’re a legend.

When you’re building solutions that are designed to help your customers generate long-term revenue, it’s important to base predictions on data.  It’s even more essential when predicting service provider (SP) trends because the sales cycle is so long that most enterprise solutions have been created, delivered, and canceled by the time an SP makes a purchasing decision.

Service providers have been confronted with the cloud for well over a decade.  Cloud – as a business model – has been aligned with revenue generation since its inception. Still, the technology needed time to brew for a while before an always-on vertical was willing to take a chance. This inflection point has happened, and we’re starting to see the results of those mega-providers making the leap.

So, here it comes, the beard-stroking Nostradamus stuff.

nostradamus headshot

If you’re a service provider and not executing on a cloud strategy, you’re on a path to irrelevance.

Want proof?  Okay.  Let me start with two that’ll knock you sideways:

  1.       Major service providers are already there.

AT&T has announced they’ve moved their 5G network to Microsoft’s Azure cloud platform.  Bell Canada has announced that they are moving critical workloads and network functions to Google Cloud.

The old mantra of “service providers will never trust public cloud” doesn’t ring true any longer.  AT&T and Bell Canada have been building virtualized and cloud-based networking tools and deployments for over a decade now.  They’ve generated a tremendous amount of cloud experience.  Far more than almost any enterprise.  They’ve spent hundreds of millions of dollars on cloud research projects designed to assess what a network of the future might look like.  While this might not be the same as the Nostradamus prophecies of “battles in the clouds,” AT&T and Bell Canada saw the cloud coming.

During these years and throughout these projects, the hyperscalers have worked hard to prove their cloud business models.  For their part, Microsoft has delivered their Azure for Operators program, supporting a sea of telco and SP partner offerings that can be blended to deliver hugely scalable infrastructure and services solutions for the consumer.

This brings us to our second key proof point:

  1.       Microsoft is acquiring AT&T’s network cloud intellectual property

This means is that Microsoft can now benefit from the years of AT&T’s cloud development and tooling to augment Azure for Operators to deliver nearly point-and-click delivery of 5G solutions. What we have is the convergence of intense cloud development and business models that work for Service Providers.  Instead of those giant providers building and maintain their own stacks, they can leverage something that’s become “industry standard,” provides incredible amounts of scale and manageability, and helps them move faster than their competitors.

Need more proof?  Let’s talk 5G design

  1.       5G technology is cloud-native.

Containerization is at the heart of every 5G deployment.  This is a major shift for wireless communication infrastructure and represents an acceptance that whether it’s private or public cloud, the only way to deliver something so incredibly transformational as 5G is with the cloud model.

Cloud also opens new ways to approach network slicing through containerization and cloud-enabled platforms throughout the architecture.  Whether it’s a mobile virtual network operator (MVNO) leasing resources from you or you’re launching your own MVNO, the cloud is vital to your business model.  With such an immense investment in infrastructure, SPs need to generate more revenue, and startups need to deliver differentiated services to compete in the market.

If we add Multi-Access Edge Computing (MEC), the artist formerly known as Mobile Edge Compute, to that mix, it means that operators and MVNOs can now drive more services closer to the consumer.  Translation: better performance, faster time to market, and grander scale.

And how do you manage something like that at scale?  That’s right: cloud. New 5G use cases will appear.  Who knows what the next killer app for 5G will be and by what names they shall be known.  Service providers need to be ready.

And now, one final big bonus one for you:

  1.       Service providers are data junkies

How do you grow beyond an infrastructure and dumb pipe provider?  Value has now moved from the connection to the data.  Visibility, security, and interconnection of data require massive amounts of resources.  Processing vast amounts of transient data is a game of scale and distribution.  The only effective way to achieve the kind of scale necessary is through distribution. Furthermore, the only effective way to achieve distribution at scale is through cloud technologies, whether public or private, at the cell tower or in the core.

But how do you unlock that value?  Artificial Intelligence (AI).  That’s right.  Not the evil-robots-will-take-over-the-world AI, but the ability to make intelligent decisions based on data.  Those decisions save money, reduce risk, identify new service opportunities, and generate revenue.  A service provider needs to move faster than its users, which means leveraging AI and cloud technologies to be agile enough to respond to change.

It’s a bold statement to make: Service providers who don’t adopt cloud will die.  But everything in the industry is pointing to a cloud future.  Cloud is a business model delivered via technology.  As civilization and culture change, so must business.  If the pandemic taught us one thing about service providers, it’s that the entire world depends upon connectivity more than we realize. Everything we know about delivering services can change in an instant.

Every service provider is at a different point along the journey with cloud.  If you’re a service provider and you don’t have a cloud strategy, then you’re in trouble.  AT&T knows it and has moved.  Bell Canada knows it and has moved.  Cloud investment has changed how we consume over top of service provider networks.  New technologies are inherently cloud-native and have been for several years.  Data is too big to be contained and too important to be ignored.

We don’t have to be Nostradamus to see this one coming.

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