Because, in part, of their millions of last mile connections and central offices, Amazon Web Services, Microsoft Azure and Google Cloud are directing a laser-like focus on telcos.
Google Cloud made some noise last week in the telecommunications space by announcing an ecosystem of over 30 partners that will serve more than 200 partner applications at the edge.
Earlier this year, Google Cloud announced its telecommunications strategy that included its Anthos for Telecom, which is a platform for delivering workloads to the network edge on Google Cloud. Anthos is an open hybrid and multi-cloud application platform that offers telecommunications companies the flexibility to modernize existing applications, build new ones and securely run them on-premises and across multiple clouds.
In a blog post last week, Google Cloud's Amol Phadke, managing director of telecom industry solutions, said 5G was enabling new applications and services across various business verticals at the edge. Google Cloud has combined Anthos, artificial intelligence (AI), and machine learning (ML) with its global edge network and its telco partners’ networks to tie 5G into the cloud.
In order to boost its telecommunications portfolio, earlier this year Google Cloud targeted former telecommunications execs such as George Nazi, who was previously the senior managing director at Accenture.
After previous career stops at Accenture, BT, Alcatel-Lucent, Phadke joined Google Cloud this past June.
In an interview with FierceTelecom prior to last week's announcement, Phadke said Google Cloud could offer four levers that would benefit telcos. The first is to help them monetize their infrastructure assets. Phadke said the increased use of service providers' networks during the coronavirus pandemic didn't translate into more revenue.
"There's huge data usage, which then is creating tremendous capex burden as they start to modernize their infrastructure and get ready for 5G, but at the same time, the revenue still stagnated," he said. "Number two, we have to start looking at the old capex/opex efficiency of the (telco) business and see what Google Cloud can do there.
"Number three, what can we do from a customer experience perspective? What can we add to the service provider suite of capabilities for them to transform the customer experience offered to their end customers?"
The fourth lever, which Google Cloud has offered for more than a year, is helping telcos, such as Telefónica and TIM, modernize their IT infrastructures by lowering their total cost of ownership (TCO). Lowering TCO includes developing applications for service providers' end customers. In some cases, the cloud providers are also serving their own end customers over telcos' last mile connections.
The monetization part of Google Cloud's telecommunications strategy includes its mobile compute edge that was the focus of last week's blog. Phadke said Google Cloud has more than 2,000 locations globally where it can help service providers monetize their infrastructures.
Phadke cited Google Cloud's deals with AT&T and Telefónica earlier this year as examples of tapping into its cloud regions for 5G mobile edge compute services and applications. Because enterprises want to run workloads in several different clouds, telcos such as AT&T and Telefónica have multiple cloud partnerships in place.
As for Google Cloud's second lever into telecommunications, capex/opex efficiency, Phadke said Google brings its spectrum management, particularly CBRS, expertise to the telecom table.
"The second order for saving actually comes from CI/CD lifecycle management and creating a software discipline around the IT organization," he said. "That is often missed, but is actually a second order benefit that is quite big from an opex efficiencies perspective."
For better customer care, Google Cloud can embed its AI/ML agents and solutions into contact centers to improve customer experience. Google Cloud's AI could also be blended into telcos' network operation centers.
"We want to infuse AI analytics to transform the customer experience from the NOC all the way to core, and not just in customer service," Phadke said. "Contact Center AI is just a start."
Phadke said enterprises and service providers do want multi-cloud engagements, which was why Google Cloud joined the Linux Foundation as a platinum member in September.
"There is a recognition that multi-cloud, or hybrid cloud, is here to stay because there's always going to be some workloads—either for sovereignty reasons, privacy reasons, or latency reasons—that would need to sit on prem," he said " At the same time, there could be a lot more synergy around certain edge applications that would sit on public cloud infrastructure.
"So there is a growing recognition that you need a hybrid world for the foreseeable future. How can you create a software stack that will help with that? That's where our multi-cloud solutions really come in."
While Google Cloud, AWS and Microsoft Azure have landed numerous service provider customers over the past year or so, not everyone is ready to climb onboard the bandwagon.
BT Chief Architect Neil McRae acknowledged his company needed to have multiple-clouds enabled, but determining how big of a market that will be is still an open question. Managing one service or application across three separate cloud providers could also be complex, according to McRae.
"This is one of the challenges I think we as operators are going to face," McRae said. "So it's clear that the hyperscalers want to be part of this journey. I think partly because they realize that for them to build data centers all over the world is probably quite an expensive thing to do. So how can they partner with telecommunications operators together to build that capability?
"I think the challenge around that might be who takes what piece of the value chain and who owns the customer? These are old issues in my mind. I think if the world wants carriers to invest in 5G and FTTP, then probably something has to be quite different in value chain."
With service providers investing billions on 5G networks and fiber-to-the-premise network (FTTP) deployments, there needs to be a reset on the value chain, especially across mobile, according to McRae.
"I think working with hyperscalers, working with the app developers, and working with customers, we've got to figure out new ways of building the edge applications that really drive big benefits for consumers and businesses," he said. "We haven't engaged with organizations like Microsoft. I've tried to figure out the reasons of that being better with telecommunication companies, and I'm not sure we're fully there yet.
"But I think that direction, that sort of partnership, is definitely something that's appealing to us. The hyperscaler play in the telco space is going to be one of those interesting developments throughout next year."