The cloud is not industry-specific, and that’s exactly what makes it so valuable for telcos
Amazon Web Services (AWS) doesn’t use the term “telco cloud” because, as the company’s Head of Worldwide Business Development for Communication Service Providers Sameer Vuyyuru told RCR Wireless News in an MWC Las Vegas meeting room, that “isn’t really the point” of the cloud.
“The point of the cloud is that it’s not industry specific, so that you can run a telco workload along with a manufacturing workload so that you can serve an end customer and generate value for them and revenue for yourself,” Vuyyuru explained. “If we were to silo a telco cloud, we’d lose that advantage of flexibility and innovation.”
That makes sense, but then what does everyone else mean when they say telco cloud? Telco cloud refers to a software-defined, cloud-native and virtualized network architecture that virtualization have more stringent performance and quality of service requirements than IT or public cloud operation. And it’s the direction operators are heading. “The end state is a cloud-native network,” said Vuyyuru, adding that when the standard bodies started defining the next generation of networks as cloud-native networks a few years ago, AWS began working with customers who understood this, including Dish, Telefonica and Swisscom.
For AWS, the relationships between the telco industry and the cloud is really about helping service providers realized a return on capital when it comes to top line growth and reducing costs.
“Top-line growth is what they all really want, because the average revenue for the consumer sector has kind of plateaued,” he explained, adding that the hyperscaler’s partnerships with Orange, T-Systems and Bell all reflect this top-line growth focus.
When it comes to reducing costs, Vuyyuru stated that the cloud can help in three important ways. First, cellular networks are always built for peak capacity and because the cloud is built to scale, networks can operate at optimal capacity. “With the cloud, you operate at the 99% of the time with optimal capacity and when there is a spike, we stretch, we elasticize ourselves,” Vuyyuru said.
Further, he claimed by simply moving to the cloud, operators can reduce their power consumption. To illustrate this point, he pointed to the recent announcement from AWS and NTT, in which the former helped reduce the latter’s power consumption for the core by 72%. “Moving to the cloud is an immediate benefit in terms of ESG, which essentially every single board member is looking for at this point,” he summarized.
Finally, the cloudifation of the network itself has the potential to enable operators to roll out network infrastructure at staggering speeds. This time, Vuyyuru turned to its work with Dish to demonstrate this benefit: “If you look at Dish, from the moment we announced we are building a network to it covering 25% of the population of the U.S., that took 15 months, which is an unheard of build.”
The conversation also touched on the circulating will-they-won’t-they rumors surrounding telcos and hyperscalers. While Vuyyuru acknowledged that this was perhaps the case a few years ago, he believes that relationship has steadied.
“I don’t see that anymore. I’ve heard it a few years ago, but I think that focus of helping grow that top line is really resonating [with operators],” he said. “The cloud needs best in class connectivity, and only when our [telco] customers are heathy and growing, is the cloud going to be healthy and growing.”
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