Years ago, the value chain for business services was clear. Telcos provided network services, software vendors offered applications, compute companies took care of servers and so on. The rise of cloud has blurred the lines and there is perhaps no industry that has been more disrupted than telecom. Over-the-top services, the cloud companies and other trends has relegated the telcos to being the “pipes” with little ability to differentiate one’s self.
The rise of the telco cloud, which is the ability to bring cloud native principles to the network can change this equation. Historically, the words “telco” and “rapid innovation” haven’t been used together very often, and for good reason. The infrastructure telcos deployed to run their network was monolithic in design, lacked agility, required a tremendous amount of human capital and was expensive to operate.
Because of this, telcos have been risk-adverse, as one mistake can cost millions. This is why telcos would typically dot every “i” and cross every “t” before rolling out a service. Juxtapose this with cloud providers that routinely roll out new services, see how they perform and shut them down if they aren’t successful. Cloud-native technologies enable fast innovation and the cloud providers have used that to disintermediate other companies, including telcos.
The shift to cloud-native is extremely important for telcos to remain competitive. One of the challenges for most telcos is they do not have the necessary skills internally to make this transition. To help with this, AWS today announced the general availability of a new service called, AWS Telco Network Builder, which is a fully managed service that helps telcos deploy, run and scale their networks using the AWS cloud.
To help with the skills gap, AWS created a telco “Rosetta Stone” where the communication service providers can use their own lexicon — network requirements, connection points and the like — to input information into a template. That is then uploaded into the service and AWS Telco Network Builder translates the information into a cloud-based network architecture and provisions the required AWS infrastructure. This can shorten the deployment of fully operational, cloud-configured telco network from days or even weeks to just a few hours. As one would expect, as the network requirements change, the service will automatically adjust compute and storage resources enabling the telco to direct more energy to the delivery of new services versus running infrastructure.
It’s essentially the same value proposition AWS offers its enterprise clients but now directed toward CSPs. The service can be managed through a centralized dashboard to monitor and manage the network running on AWS. This included on-premises infrastructure or in the many AWS Regions scattered across the globe. Like, all AWS services, Telco Network Builder has no upfront fees or commitments, and customers only pay for what they use. AWS Telco Network Builder is generally available today in US East (N. Virginia), US West (Oregon), Asia-Pacific (Sydney), Europe (Frankfurt) and Europe (Paris), and with availability in additional AWS regions coming soon. At time of launch O2 and Telefonica are service providers that are using the service.
On a pre-briefing with AWS, I asked Ishwar Parulkar, chief technologist of telecom for AWS, about some of the biggest benefits for telcos. He explained there were many. “When you introduce automation, you reduce errors across the whole pipeline,” he said. “Also, there is no need to schedule maintenance and upgrade windows. Historically, the industry had to manage downtime, which can be disruptive to customers. Lastly, telcos will need fewer operational resources and be much leaner.”
As a former information technology pro who pulled his hair out over telco outages, this shift can dramatically raise the quality of service. Historically, telcos have offered service level agreements that didn’t mean much because they dealt with aspects the telco could control. Shifting to a cloud-native architecture should greatly improve reliability and help telcos raise those currently dreadfully low Net Promoter Scores.
The second offering is Integrated Private Wireless on AWS, which combines private 4G and 5G technologies with AWS services to make it easy for businesses to deploy. These are private networks offered to enterprises but built by AWS telco partners. Although there are companies such as Celona that sell private wireless technology to enterprises, many do not want to carry the burden of deploying and managing private wireless, which includes the process of acquiring spectrum. The new service lets enterprises specify their needs through a portal and service providers can offer a managed service that runs on AWS.
This obviously complements the public 5G offering that many mobile operators offer today. Those are ideally suited for large-scale public venues, such as stadiums, but not meant for factories, warehouses, large-scale “internet of things” deployments or other areas where security, control and service delivery is important. The low-hanging fruit here would be things like smart city deployments, schools, airports, healthcare and even agriculture.
That kind of managed service provides an excellent opportunity for telcos to raise their top line by monetizing the network better. Once the network is deployed, the CSP can use many of the AWS tools, such as SageMaker, machine learning services, an IoT stack and others making it very easy-to-build applications. An example of this was the monitoring predictive system built by Verizon for Corning on AWS infrastructure. At time of launch, AWS named Deutsche Telekom, KDDI, Orange, T-Mobile and Telefonica as partners.
Telcos have been slow to embrace the cloud and modernize their networks, primarily because of the complexity of shifting a massive amount of infrastructure. This isn’t a simple “lift and shift” that many businesses can start with before using the cloud more broadly. Telcos have global networks built on a large amount of hardware and this is holding them back from competing with its more agile competitors. The new AWS offerings provide a “fast path” to the cloud where the CSP can focus on running the network without worrying about the underlying infrastructure.