Getting to know the how—and why—of the telecom cloud

A funny thing happened during the pandemic: The giant cloud hyperscalers burst into the telecom industry.

And now it’s time for everyone to get acquainted with them.

Why? Well, it seems increasingly inevitable that a certain percentage – ranging from “a little” to “most” – of telecom operators’ network functions are going to run in some kind of cloud. Of course, that’s not necessarily a surprise: Operators and vendors have been working for more than a decade to replace proprietary boxes of hardware with virtualized bits of software that can run on top of regular, standardized computers. This shift has paved the way for network operators to at least consider the possibility of putting those little virtualized bits of software (“network functions” if you want to get formal) into a cloud computing environment.

But exactly what kind of cloud should operators use? Many have already built their own, mainly as a way to take advantage of the cost savings and flexibility involved in the shift to network function virtualization and software-defined networking.

Now, though, they’re facing the difficult and potentially expensive task of maintaining and expanding their cloud as network traffic rises. Meanwhile, telecom operators’ revenues have mostly flatlined.

And that’s why Google Cloud, Microsoft and Amazon Web Services (AWS) have suddenly and loudly entered the telecom industry. They promise the savings and scalability of a cloud managed by a third party that’s shared among thousands of other enterprise customers.

The recent MWC trade show in Barcelona, Spain – the first such international telecom gathering since the COVID-19 pandemic started – was the big coming out party for these giant cloud computing vendors. Google Cloud, for example, had never attended MWC before.

Cloud traits and attributes

Dennis Hoffman, the head of Dell’s Telecom Systems Business (TBS), explained that each of the big hyperscalers is approaching the telecom cloud market from its unique position of corporate strength. Google, for example, is a company designed around mining digital data and analytics, whether that’s searchable Internet content or precisely targeted advertisements. That’s why one of the company’s big MWC announcements was its “Telecom Subscriber Insights” product. According to Google Cloud, it “helps CSPs [communication service providers] extract insights using their own existing data sources in a privacy-safe manner.”

Gabriele Di Piazza, an executive with Google Cloud, explained that the company’s new Insights product essentially combines all of Google’s customer-analytics data – from Internet searching, Android phones and elsewhere – with an operator’s own trove of customer information. The result allows operators to blast “contextual and hyper-personalized offers” to their customers.

It’s a product that’s uniquely Google – AWS and Microsoft don’t really specialize in those kinds of targeted and personalized ads.

Instead, explained Dell’s Hoffman, AWS and Microsoft are leveraging their own respective corporate strengths in their pursuit of the telecom cloud.

In the case of AWS, he pointed out that it’s the cloud computing offshoot of e-commerce giant Amazon. As a result, AWS is looking to lower operators’ costs while taking a tiny cut of each cloud computing transaction. That’s the basis of its retail-focused sales pitch in the telecom industry.

Microsoft, meanwhile, hails from the world of corporate platforms and applications, whether that’s Windows 11 or Outlook or Teams. Thus, it’s selling its Azure for Operators as a computing platform, complete with the core network functions that Microsoft acquired from Affirmed Networks and Metaswitch Networks.

The alternatives

To be clear, Google, Microsoft and AWS aren’t network operators’ only options. For example, Verizon has made it clear that it plans to keep most of its network functions inside its own cloud environment.

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