With over 800 telecom service providers competing for their slice of the pie, they will each have to invest over $200 million per year on average to achieve this level of digital transformation.
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During the global lockdown in 2020, people became more digitally connected than ever before. Zoom meetings for work, distance learning for children, and increased Netflix viewing only heightened our reliance on communication technology. These profound changes in consumer behavior catalyzed a seismic shift in society, placing monumental pressure on the global telecommunications sector to evolve, scale, and deploy rapidly to meet the growing demands.
A new research report released by Capegemini in February 2023 predicts that over the next three to five years, 46% of the telco sphere will be cloud-native. With over 800 telecom service providers competing for their slice of the pie, they will each have to invest over $200 million per year on average to achieve this level of digital transformation.
In telecommunications circles, there has been widespread discourse on the adoption of public cloud solutions. These solutions are lauded for their ability to facilitate the development, deployment, and scalability of services, especially in the face of a stagnant telco market brought about by the emergence of VoIP and OTT platforms.
The shift has become particularly notable given the dominance of AI in 2023, which disrupted nearly every industry. Telcos are now gearing up to harness this technology, necessitating investments in cloud infrastructure to meet the intensive demands of AI and ML workloads.
The global telecom cloud market size is expected to surpass around US$ 131.47 billion by 2032, with a significant CAGR of 14.2% from 2023 to 2032. So, what’s driving this year-over-year growth? Below are some of the biggest cloud adoption use cases for telcos and MNOs:
Traditionally, the telecom industry has heavily invested in on-site hardware deployment and support personnel, resulting in time and capital-intensive telco operations. While telcos remain dependent on legacy infrastructure and struggle with digitization, OTT platforms and service providers such ase WhatsApp and Netflix capitalize on widely available cloud infrastructure to offer innovative, in-demand, and high-revenue services. With cloud technology, telcos can also release new services and infrastructure components faster, allowing them to launch innovative offerings swiftly to gain the first-mover advantage.
Public cloud allows telcos to diversify their revenue streams beyond traditional connectivity solutions by providing value-added services such ascloud storage, SASE or SSE offerings, IoT platforms, and more. In addition, the cloud provides telcos and MNOs with the infrastructure resources needed to monetize the vast amounts of user data they process, enabling them to offer advanced data analytics to business consumers.
Public cloud facilitates partnerships and collaboration across industry verticals, enabling telcos to tap into a range of technologies and expertise to fuel the B2B2X model, where telcos collaborate with third-party providers to deliver end-to-end bundled solutions to end customers. With cloud, telcos can easily configure and deploy virtualized network functions, edge computing nodes for a broad spectrum of end-to-end B2B2X offerings, such as smart cities and IIoT applications.
Several telcos have already partnered with public cloud providers to construct full 5G networks by connecting their hardware and network management systems through the cloud provider. Cloud-native architectures and cloud providers’ global presence, especially at edge locations, are instrumental in delivering the low latency, high throughput needs of mission-critical 5G applications and services.
Cloud enables operational efficiency through automation of repetitive tasks like resource provisioning, configuration management, troubleshooting, and BSS functions.
Telcos are increasingly undertaking AI initiatives to optimize performance, enhance operational efficiency, and enable personalized user experiences through data-driven insights. As such, these initiatives require specialized infrastructure and massive resources that public cloud can provide on-demand.
Yet, public cloud adoption across the telecom industry has been relatively slow as compared to other sectors and verticals.
Telcos handle sensitive and personal user data, necessitating infrastructure control and compliance with strict data residency requirements. Regulatory compliance is the biggest deterrent to public cloud adoption among telcos, who often prefer on-premise or private cloud deployments. While telco cloud offerings from various providers have gained popularity due to their alignment with telco needs and regulatory requirements, telcos risk missing out on public cloud’s cutting-edge technologies, particularly in the realm of AI.
It is a concern shared across industries — the fear of being locked into a cloud provider’s ecosystem and losing the ability to switch providers or migrate to alternative solutions. This concern is especially pronounced for telcos as it can impede their adaptability to changing market conditions, reduce negotiating leverage, stifle innovation, and lead to increased costs. While multi-cloud deployments offer a solution, they present challenges such as interoperability issues among vendors and complexities in cost monitoring and management.
Telcos are often tied to their legacy infrastructure even as they undergo operational transformation. Compatibility issues and complexities in data migration can hinder cloud adoption, especially considering telcos' significant on-site investments and other barriers to complete migration. Hybrid cloud solutions offer a compromise, enabling telcos to adopt public cloud while retaining legacy and private infrastructure environments. However, it presents the same challenges as multi-cloud.
Telcos strive for "five nines" reliability (99.999% uptime) in their network and service operations, yet achieving and maintaining such high levels of reliability in public cloud environments can be daunting. While cloud service providers invest heavily in redundancy, fault-tolerant designs, and disaster recovery measures, ensuring consistent service availability requires a robust networking backbone to connect different cloud regions and telco data centers effectively.
At MWC this year, emma will showcase its cloud management platform, aiming to address telcos' multi-cloud adoption challenges. The emma platform is a cloud-agnostic solution designed to streamline the management and continuous optimization of any cloud environment, whether on-prem, hybrid, or multi-cloud. Here’s how the emma platform simplifies cloud adoption by restoring and maintaining the cloud freedom fundamental for telcos:
The emma platform seamlessly integrates diverse infrastructure environments, orchestrating them as a cohesive whole. All environments can be managed and optimized through a no-code, single dashboard. This enables flexible hybrid and multi-cloud setups that telcos can centrally control and customize with freedom. The platform itself is cloud-agnostic, ensuring it integrates just as seamlessly with any preferred cloud provider.
The emma platform provides standardized deployment and management across various cloud providers. By abstracting the underlying differences, emma enables telcos to deploy and migrate workloads seamlessly across different cloud and on-premise environments without the need for complex configurations or coding. This deployment approach simplifies the management of diverse infrastructures and eliminates the risk of vendor lock-in. It allows telcos to leverage best-of-breed solutions from any public cloud provider while also maintaining legacy and telco cloud environments for mission-critical workloads and tasks.
The emma platform's unified monitoring and management dashboard offers telcos a centralized view of their entire infrastructure landscape, encompassing legacy private, public, and telco clouds. It streamlines management by providing a single pane of glass for monitoring workload deployment, resource utilization, and costs and ensuring security compliance across hybrid and multi-cloud environments.
The emma platform also features its own private networking backbone for reliable and high-performance connectivity between different cloud environments. This backbone establishes secure and resilient connections, enabling telcos to reliably migrate data and workloads across hybrid infrastructures while maintaining strict performance and security standards, all at one-third of the usual egress cost.
With years of experience working with organizations across various verticals, emma offers robust support to help telcos navigate their multi-cloud journey with confidence. Our team of expert cloud engineers is always available, providing comprehensive guidance and support at every step of the way to ensure customers’ cloud success.
Join us at booth 6D59 at MWC Barcelona 2024 as we demonstrate how the emma platform empowers telcos and other organizations to simplify cloud complexity, reduce costs, and reclaim their cloud freedom.
