A strategic digital transformation and migration of infrastructure to the cloud can cut a CSP’s IT costs by up to 31 percent. This isn’t a number I’ve made up. This is the judgement of Three UK’s director of IT transformation, speaking at their media and analyst event last week.
Three UK began the process of moving 90 per cent of infrastructure to the cloud, automating all processes and getting rid of traditional customisation methods in 2016. Just three years later and they are already reporting that they expect to have reduced IT costs by 19 per cent. The savings are expected to reach up to 31 per cent in 2023.
The business case for telco cloud, based on the above real world ROI, is undeniable. But what does migration to the cloud really mean for a CSP?
CSPs today are facing an almost existential challenge.
5G spectrum auctions are demanding significant CAPEX, and that’s before the cost of network roll-out is added into the equation. OPEX is similarly under pressure and margins are being squeezed.
The competitive landscape is changing. No longer is it a head-to-head battle between 3-4 CSPs in a market. MVNOs and OTT services are churning subscribers, cannibalising revenue streams and innovating at a pace that until now has been alien to the comfy world of telecoms.
In deploying 5G services CSPs will be competing with these web-scale companies on agility, on-demand service delivery, cost efficient digital operations, speed of innovation and differentiated Quality of Experience.
As an industry I think (hope!) that we all accept CSPs must transform themselves into Digital Service Providers. Without this, they will struggle to meet the new competitive challenges, and fail to truly maximise the both the known and as yet undiscovered opportunities presented by 5G.
Telco Cloud is, as aptly demonstrated by 3 UK, the destination for CSPs embarking on this journey. Decades-old on-premise software development, deployment and operations principles are a barrier to digital transformation. Only by virtualizing core network functions and embracing a cloud-based, SaaS approach can service providers unlock the new digital opportunities.
The evolution of the telco cloud is a subject I’ll be speaking on at the upcoming Telecom Assurance Cloud Summit, alongside CSPs from around the world. [More info on the event is here: www.tac-summit.com]
In my panel I’ll be aiming to help answer one big question: If Telco Cloud is the destination, how can a CSP get there?
Let’s be honest, operators such as 3 UK, Reliance Jio and Rakuten are possibly the exceptions rather than the rule, with their disruptive approach to the market unencumbered by legacy infrastructure.
But how can established tier one CSPs, who are already supporting 2G, 3G and 4G networks, still realise the benefits of a cloud-native approach?
For me, there are four immutable laws that every CSP must adopt if it is to thrive as one of the disruptors and avoid being disintermediated by those disrupting the market around them.
- Automate, Automate, Automate! - From zero-touch assurance of new services to closed loop automation of hybrid network management and NFV/SDN Telco Cloud assurance, the key to delivering differentiated services and monetizing 5G lies in AI-driven automation and predictive operations. It not only saves on otherwise spiraling IT costs, it also unlocks agility and innovation. With automated service assurance, DSPs can bring new services market and monetize them quicker, operating at digital speed
- Be open - Embracing open ecosystems means rapid and industry-wide innovation with reduced costs through collaborative open source, open APIs and open standards. Initiatives such as the TM Forum’s Open Digital Architecture (ODA) program and the widespread adoption of open source are fundamental to end-to-end hybrid telco cloud networks. With companies such as Red Hat leading the adoption of Open Source in the telco cloud, and operators such as 3 UK citing Open APIs as a key factor in their telco cloud strategy, the case for openness is clear
- Continuously innovate - To compete and win against web-scale competitors, DSPs need to change their approach to innovation, climbing out from under the waterfall and embracing continuous development. Continuous innovation is critical to delivering new features, content and solutions, and zero-touch onboarding. Why does this matter? DSPs need to be able to support the launch of digital services in real time.
- Go hybrid - The final immutable law of the telco cloud is the cloud itself – or more specifically, hybrid cloud deployment. We’re seeing public cloud used for AI at scale and massive big data analytics and private EDGE cloud with micro datacenters and EDGE COMPUTE to deliver the Ultra-Low Latency use cases such as driverless cars. Telecom assurance must be cloud native and micro-services based so it can run in the public cloud, with micro services able to be deployed on-demand automatically at the EDGE to service some of the real-time use cases.
So there you have it. You can call them pillars, laws or building blocks, but the fact remains the same – to digitally transform into a cloud-native DSP, AI-driven automation, openness, continuous innovation and the hybrid cloud hold the key.
These themes will form a key element of the upcoming Telecom Assurance Cloud Summit (London, June 11th) where, together with AWS, Red Hat and a host of tier 1 CSPs, I’ll be discussing the thorny issue of telecom service assurance in the 5G era.
If you want to know more about this subject, or if you’re planning on attending the Summit, I’d love to hear from you.