Vendor-hyperscaler partnerships: Building the multi-cloud native future?

Network Innovation

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Vendors and hyperscalers want to serve telcos with cloud-native network functions that are public cloud-ready – but there are few takers. What should they do?

Vendors and hyperscalers want telcos to succeed in the cloud

In the emerging Coordination Age, networking is evolving into a cloud-native, software-based product. Our description of Coordination Age applications, which feature interdependent, distributed compute, application software, and network software and workloads, suggests that these will drive the autonomous, intelligent technology services and use cases of the future. This points to a reimagined and reconfigured relationship between vendors, hyperscalers, and telcos, as shown in the graphic below.

New roles for vendors, hyperscalers and telcos in cloud networking

Source: STL Partners

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Transitioning to cloud-centric network operations

Everyone wants telcos to succeed in making the transition to delivering services via cloud-native software, run in part or whole in the public cloud.

  • Operators have now accepted that they will increasingly create, manage, and deliver network services via cloud-native network functions and infrastructure. Initially, operators saw network virtualisation and cloudification mainly as ways to deliver connectivity more cost-efficiently and scalably. However, as network functions turned software-based, telcos have explored new revenue opportunities beyond simple connectivity by programming and customising network functions for various verticals and developers of connectivity-dependent applications. They seek support from vendor partners and third parties like systems integrators and cloud platform providers to migrate to cloud-centric operations and deploy multi-vendor CNFs on horizontal telco cloud platforms. They are also assessing how much to run network workloads on the public cloud, weighing the risks and opportunities.
  • With the cloudification of network functions and infrastructure, hyperscalers have inevitably focused on the opportunities to deliver these as a service in the same way as they deliver SaaS and infrastructure-as-a-service (IaaS) to any other industry vertical. This involves providing a wide range of network functions, platforms and services on an on-demand basis, as well as providing the telco cloud infrastructure – the virtual and physical cloud layer – for telcos and others to run network workloads and services. In order to realise these goals, hyperscalers need vendors to deliver open, cloud-native, disaggregated network function software and telco cloud infrastructure, and to adapt it to run on their clouds.
  • The established, leading network equipment providers – like Ericsson and Nokia, but also Cisco, Huawei, Samsung, ZTE and others – have increasingly accepted the need to evolve their products to be software-based, open and cloud-native. Many challenger vendors have been committed to cloud-native from the outset. The shift from providing network appliances for specific functions to delivering everything as software on commercial off-the-shelf (COTS) hardware is a major change for vendors’ business models and mindsets, similar to those of telcos. Leading vendors now accept that the future is towards open, multi-vendor, disaggregated, and cloud-native networks.

Vendors and telcos partner for cloud transition

In their relationships with telcos, vendors are committed to helping them transition to cloud- and software-based operations and service delivery. This involves evolving telcos’ networks and infrastructure (private telco cloud) and enabling service delivery via the public cloud. There are different implications for vendors in either case, but it is no longer a zero-sum game: either private or public. This is partly because telcos recognise the benefits of hybrid cloud service delivery and partly because, for vendors, adapting their network technology for delivery across the hyperscale cloud greatly expands their market. This allows network functions to move beyond traditional telcos, becoming accessible on an as-a-service basis by any organization wanting to create, provide, or consume a network service.

So, at first sight, there appears to be almost a perfect synergy of interests between telcos, vendors and hyperscalers to effect the transition to public/private cloud-centric operations. And vendors and hyperscalers have been partnering to ensure that vendors’ platforms are public cloud-ready.

Table of Contents

  • Executive Summary
    • Network functions are becoming cloud-native, running on hybrid cloud
    • Operators have been slow to take up joint vendor-hyperscaler offerings
    • Recommendations: Vendors and hyperscalers should embrace telcos as equal partners in application networking
    • Vendors and hyperscalers can choose whether to help or hinder telcos’ journey to application networking
    • Next steps
  • Table of Contents
  • Vendors and hyperscalers want telcos to succeed in the cloud
    • Terminology
  • Achievements to date in vendor-hyperscaler partnerships
    • Ericsson: Multi-vendor CNF deployment and orchestration on hybrid cloud
    • Nokia: Single-vendor CNFs-as-a-service across any cloud
    • Mavenir: Delivering CNFs across any cloud
    • Samsung: Delivering vRAN across any cloud
  • How can vendors and hyperscalers help telcos move to public cloud?
    • The NaaS 2.0 economy
    • Distinct roles for vendors, hyperscalers and telcos
    • Can vendors and hyperscalers bring telcos with them into cloud-native and the open cloud?
  • Conclusion: What if telcos cannot deliver?
  • Index

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David Martin


David Martin

Senior Analyst

David Martin has specialised on telco cloud at STL Partners since 2016, writing numerous strategic reports on different aspects of the topic. He also originated STL’s Telco Cloud Deployment Tracker: a major database of commercial telco cloud deployments by leading telcos worldwide. He is a telecoms analyst of around 25 years’ experience. David obtained a First Class degree in French and German at Trinity Hall, Cambridge, where he also pursued doctoral studies in French.