Are communication service providers (CSPs) and hyperscalers destined to be BFFs (best friends forever)? You could certainly make the case. CSPs around the world are partnering with Amazon, Google, Microsoft, and others to bring cloud-powered IT solutions to enterprise customers. Many CSPs now look to public cloud for in-house needs as well. Whether running core network functions, expanding into new markets, or accelerating network rollouts, partnering with hyperscalers can offer significant benefits. At the same time, these partnerships can also carry significant risk including competitive threat, surprisingly high costs, and lack of readiness.
How can CSPs bring the benefits of public cloud to their business and customers, without locking themselves into arrangements that could prove less desirable in the future? At VMware, we believe there’s a simple answer: multi-cloud. By preserving the ability to work with any and all cloud providers, CSPs can have their cloud cake and eat it too.
Cloud Partnerships Have their Privileges
CSPs have many good reasons to work with hyperscalers. By augmenting in-house capabilities with public and hybrid cloud resources, you can:
- Get to market more quickly and easily: When you need to get new resources up and running fast—whether as part of an enterprise offering or for your own network—deploying in the cloud is a great way to do it. Cloud resources also tend to be simpler to maintain, update, and automate.
- Strengthen customer relationships: Your enterprise customers already work with hyperscalers for core parts of their business. By jointly delivering solutions (managed cloud offerings, hybrid cloud solutions, private 5G services, and others), you can play a larger role in those customers’ business, beyond connectivity. At the same time, CSPs have much to offer in these arrangements, starting with access to their own huge customer bases. Add ubiquitous access networks and edge facilities, and network-enabled services like content delivery networks (CDNs), and all parties benefit.
- Unlock new revenue opportunities: As CSPs roll out 5G networks, hyperscalers can be key partners in creating next-generation enterprise applications and consumer experiences. Ultra-low-latency applications like augmented reality and telehealth, mass-scale Internet of Things installations, ubiquitous edge compute, and more become possible.
Weighing Hyperscale Risks
Clearly, CSPs and hyperscalers can do a lot for each other, and for their shared customers. But you can’t assume you’ll always be on the same side of the table. And what’s good for a major cloud provider’s business is not always necessarily what’s good for yours.
For starters, hyperscalers could become direct CSP competitors in the not-so-distant future. Amazon, for example, has bought up large amounts of radio spectrum. It would not be a huge lift for them to launch their own consumer and enterprise mobile services in the coming years, if they chose to do that. Even if they don’t, hyperscalers are like any other business: they want to own their customer relationships, and they want those relationships to be “sticky.” When those customers are your customers, that’s a risk.
You should also be wary of costs. Despite cloud’s reputation as an inexpensive alternative to running resources on-premises, many enterprises have migrated only to be shocked at the sticker price. For the scale of resources required to support digital service provider operations, the consumption cost model adds up quickly. There’s also a cost to refactoring applications to run in the cloud—a significant one.
Finally, when it comes to cloudifying your own 4G/5G network, the reality is that hyperscalers just can’t do everything CSPs need. Many RAN functions, for example, are still only available as virtualized network functions (VNFs), and that will likely be the case for a while. Migrating a telco network function to a lightweight container, while maintaining its functionality and performance, is not a trivial effort. Network vendors will get there eventually but for now, for anything not containerized, hyperscalers aren’t a viable option. Even as functions move to containers, service providers will always want to maintain a mix of private and public resources in order to best support service SLAs, while maintaining efficiencies.
Building a Multi-cloud Approach
If you’re linking up with a major cloud provider, make sure you’re doing it as part of a deliberate multi-cloud strategy. Sure, there are too many benefits of working with hyperscalers, and too many opportunities on the horizon, for CSPs to sit on the sidelines of public cloud. With the risks above in mind however, multi-cloud is the best way to benefit from public cloud without risking your own business interests.
VMware has advocated a multi-cloud strategy with our CSP customers for years. It’s no accident that one of the first public comments of our new CEO, Raghu Raghurum, was to reaffirm VMware’s role as “Switzerland” in the cloud marketplace: “We’re hardware agnostic, cloud agnostic, and we can really focus on helping our customers run their applications and IT however they want to run it.”
VMware can and does work with all the major cloud players, and we empower our customers to adopt a multi-cloud strategy as well. By working with VMware to embrace a cloud-agnostic approach, CSPs benefit from:
- Open, multivendor cloud platform: VMware’s Telco Cloud Platform is designed to empower CSPs to deliver any application, on any cloud, anywhere. We provide a single platform to deploy, manage, and secure workloads across any cloud: public, private, telco, edge, or on-premises.
- Consolidated cloud approach: By building public and hybrid cloud resources on a cloud-neutral platform, you gain the ability to work with any and all hyperscalers using a single, consistent operational model. Extend new edge offerings to key parts of your footprint using Amazon’s edge solutions. Use Google AI tools to determine the optimal spot to land a given workload. Wrap Microsoft 365 applications with SD-WAN and security as part of an enhanced enterprise offering. With a multi-cloud approach, you can do all of it at once.
- Unified automation: To scale, CSPs need to simplify the onboarding and management of VNFs and CNFs with automation.VMware Telco Cloud Platform can act as a central nervous for a multi-cloud CSP environment—a common orchestration platform to automate deployment and operations across all sites.
- Increased business leverage and independence: When you can work with multiple hyperscalers and easily shift workloads from one to another, you’re in much better position to negotiate pricing and business terms than if you’re locked into one.
Evolving through 5G and Beyond
For CSPs, the biggest benefit of building a multi-cloud strategy with VMware may be the flexible evolution path this approach offers to 5G. Remember: even when you’re ready to adopt a cloud-native approach to your network and services, your network vendors might not be. If you’re relying on one hyperscaler’s cloud for key parts of your edge strategy, and they can only support containerized network functions, that could be a problem. When you’re using VMware Telco Cloud Platform, it’s not an issue. You can run VNFs on premises and CNFs in the public cloud, at the same time, using the same consistent operations.
Over time, as network vendors containerize more network functions, you can move them over to public cloud, without disrupting your basic operational model. You can also do the reverse. For example, if you used a hyperscaler’s edge cloud to accelerate a network expansion, and you later decide it’s too expensive or too difficult to guarantee performance, you can move those workloads back on-premises. Either way, there’s no need to refactor the network function; if it’s running on the VMware Telco Cloud Platform, it can continue to.
So yes, partner with hyperscale cloud providers. The advantages are too great to ignore. But do it the smart way. By embracing a multi-cloud strategy, you can enjoy all the benefits without risking your independence, your customer relationships, or the future flexibility of your business.
To learn more about how VMware helps service providers safely leverage hyperscaler opportunities, visit telco.vmware.com.
