Verizon rules out putting its core in the public cloud

AMSTERDAM – Network X – “It’s called the core for a reason,” said Verizon Business CEO Sampath Sowmyanarayan with a smile. His company’s number-one US rival stunned many onlookers in June last year when it announced plans to run its 5G network, core and all, in the public cloud of Microsoft Azure. Outside AT&T, telco executives have been shaking their heads over the deal like a schoolteacher marking a bad exam paper, while AT&T has been trying to justify the arrangement, insisting it has not lost control.

That is not how Sowmyanarayan sees it. “I strongly believe that large telcos should own their own destiny – so, for example, I will never be putting our core network on a hyperscaler,” said the boss of Verizon’s enterprise unit during a panel session at the Network X event in Amsterdam earlier today. “We need to control it, we need to own the stack, we need to manage through it. Some of our partners and competitors have done that. We will not be doing that. I want to have control over our OSS/BSS stack.”

The emphatic message seems like a blow to Microsoft. After news first broke of its tie-up with AT&T, the software giant was revealed to have acquired various network cloud assets from the US telco and the staff needed to manage them. Along with Affirmed Networks and Metaswitch, two core network developers Microsoft bought in 2020, these assets and experts now underpin the offer it is pitching to other telcos, branded Azure Operator Distributed Services (or AODS).

Verizon would have been an unlikely client for a service based on AT&T’s technology. But Sowmyanarayan – who succeeded Tami Erwin in the top job after her retirement in May – has ruled out doing anything similar with either AWS or Google Cloud, Microsoft’s two big rivals in the market for public cloud services.

“There are some red lines we won’t cross,” Sowmyanarayan told Light Reading during an interview at Network X. “The core network we would like to do ourselves. That is a big point of differentiation between us and our biggest competitor in the US,” he added in a clear reference to AT&T and its deal with Microsoft.

Lots of carriers, one stack

One of Sowmyanarayan’s chief concerns seems to be that entrusting core network services to a few public clouds would make differentiation even harder. “A lot of services are going to sit at the core,” he said. “If this is commoditized and every carrier has exactly the same stack, where is differentiation going to come from?” Earlier in the day, he told conference attendees that hyperscalers with ownership of the computing layer and applications stack were “trying to commoditize the network layer below.”

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