Telco grade or cloud grade ? II

I have oftentimes criticized network operators’ naivety when it comes to their capacity to convince members of the ecosystem to adopt their telco idiosyncrasies.

I still have doubts that they will successfully create a profitable marketplace for open APIs, for instance, but today I want to turn towards the cloud providers' poor track record in telco.

On the heels of Microsoft’s abandonment of their telco software ambitions, one has to wonder whether all the perceived threats of cloud providers competing with telcos was warranted.

Between the rush from network operators to become cloud providers, to their precipitous exit, or the first iterations of AWS outpost and wavelength or Google Anthos or Microsoft Azure for operators, there has been multiple attempts for cloud and network operators to find coopetitive model.

While it would be easy to generalize, there are a few similarities between the approach of the webscalers even if the tactics have been different.

AWS has been the first to look at the telco market and try to monetize it. The initial idea was to try and convince the operators to deploy their cloud infrastructure in the data centers and central offices in the form of outposts. As its name suggests, AWS was looking at these as beachheads of managed infrastructure in the telco networks, with a view that more and more telco functions would run there.While the economic model was attractive, the operating model was incompatible with most operators ambitions.

Google, as the challenger in the public cloud space, took the approach of providing open source and do it yourself tools for telco cloud creation and operation. This model offered the most flexibility and cost efficiency but supposed skills and resource that were not immediately available for operators.

Microsoft adopted an intermediate approach, allowing operators to deploy their COTS Azure approved infrastructure and run a specific version of Azure integrated with the public cloud. Unfortunately, the company wasn't really quick to execute and the frequent changes in strategy, naming and services offering became very confusing for operators.

In my opinion, the cloud vendors neglected several things in their calculations:

• While operators at the time were still convinced that most telco functions weren’t suitable for a cloud grade environment, Cloud providers were convinced it was only a question of mindset and failed to understand the legitimate telco specific requirements for specialized compute or network synchronization for instance.
• The regulatory landscape might vary from market to market, but in most cases, data sovereignty, privacy, and security concerns weren’t properly factored in.
• Operators  usually need to be convinced that their vendors are committed to delivering and supporting their products products for at least 10 years (typical duration between the start of the sale cycle and the end of amortization).
• Very few network operators accept to be commoditized to a simple connectivity provider. They aim to provide ranges of products and services and saw the entrance of cloud providers in their networks as an existential threat.
• While over time, most operators came to accept that their network needed to evolve to be more like a cloud than a traditional telco network, they did not have the necessary skills and resources for a rapid evolution.
• Between cloud providers who envisioned that every telco functions could / should live in the public cloud and traditional operators who believed that all telco functions should be hosted on a private cloud or on premises, the reality is somewhere in between. Each operator has to arbitrate which function should be instantiated where, not only from a technological standpoint but more importantly from an economical perspective. These techno-economic models take time to evaluate.

On the positive side, vendors have been diligent in porting their software to the cloud, starting with BSS, OSS, Core and lately RAN functions. Most traditional and emerging vendors have been able to develop or port a large part of their offering into public / hybrid / private clouds environments.

This has benefited greenfield operators who have been able to leapfrog brownfield by adopting a cloud native operation from the start. This adaptation is still ongoing, though, and cloud providers are learning that there is more than elasticity to provide a telco grade cloud network.
Microsoft’s exit from the telco cloud software to focus on the infrastructure is understandable but reinforces the belief that cloud providers can be poor telco vendors.

It also highlights the need for telco operators to provide better cloud capabilities if they desire to capture the enterprise market. Enterprises use cloud providers for a variety of services and telco networks for the most basic utility connectivity. If operators want to stand a chance in that market, the need to evolve is more urgent than ever. Beyond offering APIs, operators need to build a platform to allow those enterprise customers who want to customize their connectivity to discover, reserve and consume network resources on demand.

What's behind the operators' push for network APIs?

 

As I saw the latest announcements from GSMA, Telefonica and Deutsche Telekom, as well as the asset impairment from Ericsson on Vonage's acquisition, I was reminded of the call I was making three years ago for the creation of operators platforms.

One one hand, 21 large operators (namely, America Movil, AT&T, Axiata, Bharti Airtel, China Mobile, Deutsche Telekom, e& Group, KDDI, KT, Liberty Global, MTN, Orange, Singtel, Swisscom, STC, Telefónica, Telenor, Telstra, Telecom Italia (TIM), Verizon and Vodafone) within the GSMA launch an initiative to open their networks to developers with the launch of 8 "universal" APIs (SIM Swap, Quality on Demand, Device Status, Number Verification, Simple Edge Discovery, One Time Password SMS, Carrier Billing – Check Out and Device Location). 

Additionally, Deutsche Telekom was first to pull the trigger on the launch of their own gateway "MagentaBusiness API" based on Ericsson's depreciated asset. The 3 APIs launched are Quality-on-demand, Device Status – Roaming and Device Location, with more to come.

Telefonica, on their side launched shortly after DT their own Open Gateway offering with 9 APIs (Carrier Billing, Know your customer, Number verification, SIM Swap, QOD, Device status, Device location, QOD wifi and blockchain public address).

On the other hand, Ericsson wrote off 50% of the Vonage acquisition, while "creating a new market for exposing 5G capabilities through network APIs".

Dissonance much? why are operators launching network APIs in fanfare and one of the earliest, largest vendor in the field reporting asset depreciation while claiming a large market opportunity?

The move for telcos to exposing network APIs is not new and has had a few unsuccessful aborted tries (GSMA OneAPI in 2013, DT's MobiledgeX launch in 2019). The premises have varied over time, but the central tenet remains the same. Although operators have great experience in rolling out and operating networks, they essentially have been providing the same connectivity services to all consumers, enterprises and governmental organization without much variation. The growth in cloud networks is underpinned by new generations of digital services, ranging from social media, video streaming for consumers and cloud storage, computing, CPaaS and IT functions cloud migration for enterprises. Telcos have been mostly observers in this transition, with some timid tries to participate, but by and large, they have been quite unsuccessful in creating and rolling out innovative digital services. As Edge computing and Open RAN RIC become possibly the first applications forcing telcos to look at possible hyperscaler tie-ins with cloud providers, it raises several strategic questions.

Telcos have been using cloud fabric and porting their vertical, proprietary systems to cloud native environment for their own benefit. As this transition progresses, there is a realization that private networks growth are a reflection of enterprises' desire to create and manage their connectivity products themselves. While operators have been architecting and planning their networks for network slicing, hoping to sell managed connectivity services to enterprises, the latter have been effectively managing their connectivity, in the cloud and in private networks themselves without the telcos' assistance. This realization leads to an important decision: If enterprises want to manage their connectivity themselves and expand that control to 5G / Cellular, should Telcos let them and if yes, by what means?

The answer is in network APIs. Without giving third party access to the network itself, the best solution is to offer a set of controlled, limited, tools that allow to discover, reserve and consume network resources while the operator retains the overall control of the network itself. There are a few conditions for this to work. 

The first, is essentially the necessity for universal access. Enterprises and developers have gone though the learning curve of using AWS, Google cloud and Azure tools, APIs and semantic. They can conceivably see value in learning a new set with these Telco APIs, but wont likely go through the effort if each Telco has a different set in different country.

The second, and historically the hardest for telcos is to create and manage an ecosystem and developer community. They have tried many times and in different settings, but in many cases have failed, only enlisting friendly developers, in the form of their suppliers and would be suppliers, dedicating efforts to further their commercial opportunities. The jury is still out as to whether this latest foray will be successful in attracting independent developers.

The third, and possibly the most risky part in this equation, is which APIs would prove useful and whether the actual premise that enterprises and developers will want to use them is untested. Operators are betting that they can essentially create a telco cloud experience for developers more than 15 years after AWS launched, with less tools, less capacity to innovate, less cloud native skills and a pretty bad record in nurturing developers and enterprises.

Ericsson's impairment of Vonage probably acknowledges that the central premise that Telco APIs are desirable is unproven, that if it succeeds, operators will want to retain control and that there is less value in the platform than in the APIs themselves (the GSMA launch on an open source platform essentially directly depreciates the Vonage acquisition).

Another path exist, which provides less control (and commercial upside) for Telcos, where they would  host third party cloud functions in their networks, even allowing third party cloud infrastructure (such as Amazon Outpost for instance) to be collocated in their data centers. This option comes with the benefit of an existing ecosystem, toolset, services and clients, just extending the cloud to the telco network. The major drawback is that the telco accepts their role as utility provider of connectivity with little participation in the service value creation.

Both scenarios are being played out right now and both paths represent much uncertainty and risks for operators that do not want to recognize the strategic implications of their capabilities.

NEC MWC 21 Headlines

Whether you were unable to physically go to Mobile World Congress, or were too busy to catch all the announcements, I figured I would put together a brief overview of what we announced this year.

This is also an excellent explanation to those who have been asking what decided me to come work for NEC. If you read the following, I think you will get a good idea.

Besides working with amazing teams and very smart people, what drawn me to NEC is the continuation of innovation and deployment of open and disaggregated networks I started as an independent analyst at {Core Analysis}, as an executive at Telefonica and as an advisor at Bell Canada.

Our first big announcement was from Vodafone UK, selecting NEC for deployment of our 5G Massive MIMO radio units in the UK. It was promptly followed by Deutsche Telekom announcing NEC 5G open RAN mMIMO in Germany. NEC is proving once again its market leadership in Open RAN with the deployment of Radio Units in dense urban environments at commercial scale. Many vendors have massive MIMO technology, some vendors are Open RAN, we are the first and the only one to have deployed massive MIMO Open RAN in urban networks. This will change and we welcome the competition for this market to grow.

As Open RAN becomes mainstream, the opportunity for cost savings and new savings relies on the optimization of virtual resources. This selection of NEC by NTT DOCOMO to develop their Radio Intelligent Controller (RIC) is another testament of our innovation and pioneering spirit.

To grow, the Open RAN market needs many different configurations, to offer connectivity products for all kinds of environments (public, private, urban, rural, industrial, government...). We did our part announcing 3 new massive MIMO open RAN RUs.

NEC is focusing on providing RUs that are high performance high quality and completely open. We share this philosophy with MTI and that is why we are proud to have announced a strategic partnership with them.

The other important part of Open RAN is the software. NEC has been recognized as a leading solutions integrator of third parties in that space and will continue to do so, but in complement has announced the launch of of its own cloud native high performance open RAN software offering. 5G success depends on a rich ecosystem and an abundance of vendors.

Shifting from Open RAN, 5G's success will be realized through the capacity to create connectivity products that are adapted to the different use cases. A key element for this a core network that is cloud native, capable of being deployed in public or private clouds and that is blazingly fast. We are proud to announce the world fastest 5G Core network deployed in Rakuten's mobile network, in collaboration with Intel. At the same time, we showed off our deployment together with Netcracker on AWS cloud.

Private and enterprise networks are an important part of 5G and we announced our collaboration with NTT data to promote solutions to accelerate its adoption.

By now, you probably understand why I am so humbled to have been invited to join NEC and to support all these products and teams. It is a great privilege to be able to continue contributing to an open, disaggregated, high performance 5G. More to come soon, stay tuned!

TelecomTV Panel on Hyperscalers and Telcos coopetition model at the edge

 Q&A with Telefonica, Verizon Wireless and Dell

Rakuten: the Cloud Native Telco Network

Traditionally, telco network operators have only collaborated in very specific environments; namely standardization and regulatory bodies such as 3GPP, ITU, GSMA...

There are a few examples of partnerships such as Bridge Alliance or BuyIn mostly for procurement purposes. When it comes to technology, integration, product and services development, examples have been rare of one carrier buying another's technology and deploying it in their networks.

It is not so surprising, if we look at how, in many cases, we have seen operators use their venture capital arm to invest in startups that end up rarely being used in their own networks. One has to think that using another operator's technology poses even more challenges.

Open source and network disaggregation, with associations like Facebook's Telecom Infra Project, the Open Networking Foundation (ONF) or the Linux Foundation O-RAN alliance have somewhat changed the nature of the discussions between operators.

It is well understood that the current oligopolistic situation in terms of telco networks suppliers is not sustainable in terms of long term innovation and cost structure. The wound is somewhat self-inflicted, having forced vendors to merge and acquire one another in order to be able to sustain the scale and financial burden of surviving 2+ years procurement processes with drastic SLAs and penalties.

Recently, these trends have started to coalesce, with a renewed interest for operators to start opening up the delivery chain for technology vendors (see open RAN) and willingness to collaborate and jointly explore technology development and productization paths (see some of my efforts at Telefonica with Deutsche Telekom and AT&T on network disaggregation).

At the same time, hyperscalers, unencumbered by regulatory and standardization purview have been able to achieve global scale and dominance in cloud technology and infrastructure. With the recent announcements by AWS, Microsoft and Google, we can see that there is interest and pressure to help network operators achieving cloud nativeness by adopting the hyperscalers models, infrastructure and fabric.

Some operators might feel this is a welcome development (see Telefonica O2 Germany announcing the deployment of Ericsson's packet core on AWS) for specific use cases and competitive environments. 

Many, at the same time are starting to feel the pressure to realize their cloud native ambition but without hyperscalers' help or intervention. I have written many times about how telco cloud networks and their components (Openstack, MANO, ...) have, in my mind, failed to reach that objective. 

One possible guiding light in this industry over the last couple of years has been Rakuten's effort to create, from the ground up, a cloud native telco infrastructure that is able to scale and behave as a cloud, while providing the proverbial telco grade capacity and availability of a traditional network. Many doubted that it could be done - after all, the premise behind building telco clouds in the first place was that public cloud could never be telco grade.

It is now time to accept that it is possible and beneficial to develop telco functions in a cloud native environment.

Rakuten's network demonstrates that it is possible to blend traditional and innovative vendors from the telco and cloud environments to produce a cloud native telco network. The skeptics will say that Rakuten has the luxury of a greenfield network, and that much of its choices would be much harder in a brownfield environment.

The reality is that whether in the radio, the access, or the core, in OSS or BSS, there are vendors now offering cloud native solutions that can be deployed at scale with telco-grade performance. The reality as well is that no all functions and not all elements are cloud native ready. 

Rakuten has taken the pragmatic approach to select from what is available and mature today, identifying gaps with their ideal end state and taking decisive actions to bridge the gaps in future phases.

Between the investment in Altiostar, the acquisition of Innoeye and the joint development of a cloud native 5G Stand Alone Core with NEC, Rakuten has demonstrated vision clarity, execution and commitment to not only be the first cloud native telco, but also to be the premier cloud native telco supplier with its Rakuten Mobile Platform. The latest announcement of a MoU with Telefonica could be a strong market signal that carrieres are ready to collaborate with other carriers in a whole new way.

What are today's options to deploy a telco cloud?

Over the last 7 years, we have seen leading telcos embracing cloud technology as a mean to create an elastic, automated, resilient and cost effective network fabric. There has many different paths and options from a technological, cultural and commercial perspective.

Typically, there are 4 categories of solutions telcos have been exploring:

• Open source-based implementation, augmented by internal work
• Open source-based implementation, augmented by traditional vendor
• IT / traditional vendor semi proprietary solution
• Cloud provider solution

The jury is still out as to which option will prevail, as they all have seen growing pains and setbacks.

Here is a quick cheat sheet of some possibilities, based on your priorities:

Obviously, this table changes quite often, based on progress and announcements of the various players, but it can come handy if you want to evaluate, at high level, what are some of the options and pros / cons of deploying one vendor or open source project vs another.

Details, comments are part of my workshops and report on telco edge and hybrid cloud networks.

Hyperscalers enter telco battlefront

We have, over the last few weeks, seen a flurry a announcements from hyperscalers investing in telco infrastructure and networks. Between Facebook's $5.7B investment in India's Jio Reliance, to Microsoft's acquisition of Affirmed Networks for $1.35B or even AWS' launch of Outpost and Google's Anthos ramp up.

Why are hyperscalers investing in telecom gear and why now?

Facebook had signalled its intent as far as 2016 when Mark Zuckerberg presented at mobile world congress his vision for the future of the company.

Beyond the obvious transition from picture and video sharing to virtual / augmented reality, tucked-in in the top right, are two innocuous words “telco infra”.

What Facebook realized is that basically anyone who has regular access to broadband will likely use a Facebook service. One way to increase the company’s growth is to invent / buy / promote more services, which is costly and uncertain. Another way is simply to connect more people.

With over 2,5 billion Facebook products users, the company still has some space to grow in this area, but the key limiting factor seems to be connectivity itself. The last billions of broadband unconnected are harder to attain because traditional telecom networks do not reach there. The last unconnected are mostly in rural area. Geographically disperse, with a lower income than their urban counterparts.

Looking at this problem from their perspective, Facebook reached a similar conclusion to the network operators operating in these markets. Traditional telco networks are too expensive to deploy and maintain to reach this population sustainably. The same tactics employed by operators to disaggregate and stimulate the infrastructure market can be refocused and better stimulated by Facebook.

This was the start of Facebook Connectivity, a specific line of business in the social media’s giant empire to change the cost structure of telco networks. Facebook connectivity has evolved to encompass a variety of efforts, ranging from the creation of TIP (an open forum to disaggregate and open telco networks), the co investment with Telefonica in a Joint Venture dedicated to connect the unconnected in latin america and this week, the announcement of its acquisition of 9.9% of Jio Reliance in India.

How about Microsoft, Google and others?

Google had, before the recent open source cloud platform Anthos dug their toes in telco water with project Fi and its fiber businesses.

Microsoft has been trying for he last 5 years to exploit the transition in telco networks from proprietary to IT. Even IBM's Redhat acquisition had a telco interest, as the giants also try to become a more prevalent vendor in the telco ecosystem.

So... why now?

Another powerful pivot point in Telecom is the emergence of 5G. As the latest telephony technology generation rolls out, telco networks are undeniably being re-architected and redesigned to look more like cloud networks. This creates an interesting set of risks and opportunities for incumbents and new entrants alike.
For operators, the main interest is to drastically reduce the cost of rolling out and maintaining complex telco networks by using powerful virtualization, SDN and automation techniques that have allowed hyperscalers to dominate cloud computing. These technologies, if applied correctly can transform the cost structure of network operators, particularly important at the outset of multi billion dollars investment in 5G infrastructure. The radical cost structure disruption comes from disaggregation of the network between hardware and software, the introduction of new vendors in the value chain who drive price pressure on incumbents and the widespread automation and cloud economics.

These opportunities bring also new risks. While they open up the supply chain with the introduction of new vendors, they also allow new actors to enter the value chain, either to substitute and dominate legacy vendors or create new control points (see the orchestrator wars I have been mentioning in previous posts). The additional risk is that the cost of entry into telco becomes lower for cloud hyperscalers as the technology to run telco networks transitions from proprietary closed ecosystem to open source, cloud environment.

The last pivot point is another telco technology that is very specifically aimed at creating a cloud environment in telco networks: Edge computing. It creates a cloud layer that can allow the provision, reservation and consumption of telco connectivity, together with cloud computing. As a greenfield environment, it is a natural entry point for cloud operators and new vendors alike to enter the telco ecosystem.

Facebook, Google, AWS, Microsoft and others seem to think that 5G and edge computing in particular will be more cloud than telco. Network operators try to resist this claim by building a 5G network that will be a fully integrated connectivity and computing experience, complementary to public clouds, but different enough to command a premium, a different value chain and operator control.

In which direction will the market move? This and more in my report and workshop Edge computing and Hybrid Clouds 2020.

The business cases of edge computing

Edge computing has been a trendy topic over the last year. Between AWS' launch of Outpost, Microsoft continuous effort with Azure Stack, Nvidia's specialized gaming version EGX platform or even Google's Anthos toolkit, much has been said about this market segment.
Network operators, on their side, have announced plans for deployments in many geographies, but with little, in terms of specific new services, revenues or expected savings.
Having been in the middle of several of these discussions, between vendors, hyperscalers, operators and systems integrators, I am glad to share a few thoughts on the subject.

Hyperscalers have not been looking at edge computing as a new business line, but rather as an extension of their current cloud capabilities. There are many use cases today that cannot be fully satisfied by the cloud, due to a combination of high / variable latency, network congestion, and lack of visibility / control of the last mile connectivity.
For instance, anyone having tried to edit online a diagram in powerpoint office 365 or to play a massive multiplayer online cloud game will recognize how maddeningly frustrating the experience can be.
Edge computing, as in bringing cloud resources closer physically to where data is consumed / produced makes sense to reduce latency and the need for on-premise dedicated resources. From an hyperscaler's perspective, edge computing can be as simple as dropping a few racks within an operator data center to allow their clients to use and configure new availability zones with specific performance and price.

Network operators, who have largely lost the cloud computing wholesale market to the hyperscalers, see edge computing as an opportunity to reintegrate the value chain, by offering cloud-like services at incomparable performance. Ideally, they would like to capture and retain the emerging high performance cloud computing market that will be sure to spurn a new category of digital services ranging from AI-augmented manufacturing and automation, autonomous vehicles, ubiquitous facial and object recognition and compute-less smart devices. The problem is that a lot of these hypothetical services are ill-defined, far fetched and futuristic, which does not inspire sufficient confidence to the CFO that has to approve multi - billion capital expenditure to get going.

But surely, if the likes of Microsoft, Intel, HP, Google, Facebook, AWS are investing in Edge Computing there must be something there? What are the operators missing to make the edge computing business case positive?

Mobile or multi access edge computing?

Many operators looked at edge computing first from the perspective of mobile. The mobile edge computing business case remains extremely uncertain. There is no identified use case that justifies the cost to deploy thousands of mini compute capabilities at mobile site in the short term. Even with the perspective of upgrading networks to 5G, the added cost of mobile edge computing is hard to justify.

If not in mobile site, the best bet to deploy edge computing for network operators is in Central Offices (CO). These facilities house commuting platforms for copper, fiber, DSL connectivity and are overdue for upgrade in many markets. The deployment of fibre, the copper replacement and the evolution of technology from GPON to XGS-PON and PON2 are excellent windows of opportunity to replace aging single-purposes infrastructure with open, software defined computing capability.
The level of investment for central offices retooling into mini data centers is orders of magnitude lower than the mobile case, and is completely flexible. It is not necessary to change all central offices, one can proceed by deploying one per state / province / region and increase capillary as business dictates.

What use cases would make edge computing's business case positive for operators in that scenario?

• First, for operators who have triple and quadruple play, the opportunity to replace aging dedicated infrastructure for TV, fixed telephony, enterprise and residential connectivity by cloud native software defined open architecture provides interesting savings and benefits. The savings are realized from the separation of hardware and software, the sourcing and deployment of white boxes and the opex savings of separating control plane and centralizing and automating service elasticity. 
• Additional savings are to be had with the deployment at the edges of content / video caches. Particularly for TV providers who see the increase of on-demand and unicast live traffic, positioning edge caches allow up to 80% savings in content transport. This is likely to increase with the upgrade from HD to 4K, 8K and growth in AR/VR.
• At last, for operators who are deploying their CPE in their customers' home, edge computing allows to simplify and reduce drastically the cost of these equipments and their deployment / maintenance by bringing the services into the Central Office and reducing the need for storage and compute in the CPE.

While the savings can be significant in the long run, no operator can justify substituting existing infrastructure if its amortization is not fully realized on these premises alone. This is why some operators are looking at these scenarios only for greenfield fiber deployments or as part of massive copper replacement windows.
Savings alone in all likeliness won't allow operators to deploy at the rhythm necessary to counter hyperscalers. New revenues streams can also be captured with the deployment of edge computing.

• For consumers, it is likely that the lowest hanging fruit in the short term is in gaming. While hyperscalers and gaming companies have launched their own cloud gaming services, their success has been limited due to the poor online experience. The most successful game franchises are Massive Multiplayer Online. They pitch dozens of players against each other and require a very controlled latency between all players for a fair and enjoyable gameplay. Only operators can provide controlled latency if they deploy gaming servers at the edge. Without a full blown gaming service, providing game caching at the edge can drastically reduce the download time for games, updates and patches, which increases dramatically player's service satisfaction.
• For enterprise users, edge computing has dozens of use cases that can be implemented today that are proven to provide superior experience compared to the cloud. These services range from high performance cloud storage, to remote desktop, to video surveillance and recognition.
• Beyond operators-owned services, the largest opportunity is certainly the enablement of edge as a service (EaaS), allowing cloud developers to use edge resources as specific cloud availability zones.

The main issue at this stage, for operators is to decide whether to let hyperscalers deploy their infrastructure in their network, capturing most of the value of these emerging services but also opening up a new line of revenue from wholesale hosting or trying to play it alone, as an operator or a federation of them, deploying a telco cloud infrastructure and building the necessary platform to resell edge compute resource in their networks.

This and a lot more use cases and business cases in my online workshop and report Edge Computing 2020.

Announcing telco edge computing and hybrid cloud report 2020

As I am ramping up towards the release of my latest report on telco edge computing and hybrid cloud, I will be releasing some previews. Please contact me privately for availability date, price and conditions.

In the 5 years since I published my first report on the edge computing market, it has evolved from an obscure niche to a trendy buzzword. What originally started as a mobile-only technology, has evolved into a complex field, with applications in IT, telco, industry and clouds. While I have been working on the subject for 6 years, first as an analyst, then as a developer and network operator at Telefonica, I have noticed that the industry’s perception of the space has polarized drastically with each passing year.

The idea that telecom operators could deploy and use a decentralized computing fabric throughout their radio access has been largely swept aside and replaced by the inexorable advances in cloud computing, showing a capacity to abstract decentralized computing capacity into a coherent, easy to program and consume data center as a service model.

As often, there are widely diverging views on the likely evolution of this model:

The telco centric view

Edge computing is a natural evolution of telco networks. 
5G necessitates robust fibre based backhaul transport.With the deployment of fibre, it is imperative that the old copper commuting centers (the central offices) convert towards multi-purposes mini data centers. These are easier and less expensive to maintain than their traditional counterpart and offer interesting opportunities to monetize unused capacity.

5G will see a new generation of technology providers that will deploy cloud native software-defined functions that will help deploy and manage computing capabilities all the way to the fixed and radio access network.

Low-risk internal use cases such as CDN, caching, local breakout, private networks, parental control, DDOS detection and isolation, are enough to justify investment and deployment. The infrastructure, once deployed, opens the door to more sophisticated use cases and business models such as low latency compute as a service, or wholesale high performance localized compute that will extend the traditional cloud models and services to a new era of telco digital revenues.

Operators have long run decentralized networks, unlike cloud providers who favour federated centralized networks, and that experience will be invaluable to administer and orchestrate thousands of mini centers.

Operators will be able to reintegrate the cloud value chain through edge computing, their right-to-play underpinned by the control and capacity to program the last mile connectivity and the fact that they will not be over invested by traditional public clouds in number and capillarity of data centers in their geography (outside of the US).

With its long-standing track record of creating interoperable decentralized networks, the telco community will create a set of unifying standards that will make possible the implementation of an abstraction layer across all telco to sell edge computing services irrespectively of network or geography.

Telco networks are managed networks, unlike the internet, they can offer a programmable and guaranteed quality of service. Together with 5G evolution such as network slicing, operators will be able to offer tailored computing services, with guaranteed speed, volume, latency. These network services will be key to the next generation of digital and connectivity services that will enable autonomous vehicles, collaborating robots, augmented reality and pervasive AI assisted systems.

The cloud centric view:

Edge computing, as it turns out is less about connectivity than cloud, unless you are able to weave-in a programmable connectivity. 

Many operators have struggled with the creation and deployment of a telco cloud, for their own internal purposes or to resell cloud services to their customers. I don’t know of any operator who has one that is fully functional, serving a large proportion of their traffic or customers, and is anywhere as elastic, economic, scalable and easy to use as a public cloud.

So, while the telco industry has been busy trying to develop a telco edge compute infrastructure, virtualization layer and platform, the cloud providers have just started developing decentralized mini data centers for deployment in telco networks.

In 2020, the battle to decide whether edge computing is more about telco or about cloud is likely already finished, even if many operators and vendors are just arming themselves now.

Edge computing, to be a viable infrastructure-based service that operators can resell to their customers needs a platform, that allows third party to discover, view, reserve and consume it on a global scale, not operator per operator, country per country, and it looks like the telco community is ill-equipped for a fast deployment of that nature.

Whether you favour one side or the other of that argument, the public announcements in that space of AT&T, Amazon Web Services, Deutsche Telekom, Google, Microsoft, Telefonica, Vapour.io and Verizon – to name a few –will likely convince you that edge computing is about to become a reality.

This report analyses the different definitions and flavours of edge computing, the predominant use cases and the position and trajectory of the main telco operators, equipment manufacturers and cloud providers.