AsiaInfo and Amazon Web Services Alliance: A Bold Leap Forward or Wishful Thinking?

Ron Westfall - Research Director, Service Provider Infrastructure
Ron Westfall – Research Director, Service Provider Infrastructure

Summary Bullets:

  • AsiaInfo embarked on an alliance with Amazon Web Services (AWS) to build a business Internet platform based on AWS infrastructure. The collaboration embeds AsiaInfo’s Veris Cloud Core solution on the AWS public cloud network, targeting operator- and enterprise IT-driven transformation of their operations and management.
  • Both AsiaInfo and AWS confront persistent operator reluctance to entrust core business processes on public cloud infrastructure, due to the wide-ranging consequences of a high-profile security breach. Can AsiaInfo and AWS overcome these hidebound operator reservations?

In recent interactions at the TM Forum Live! event, AsiaInfo promoted and re-touted the alliance it formed with AWS in February 2016. The AsiaInfo/AWS alliance – dubbed the Business Internet platform – embeds the AsiaInfo Veris Cloud Core solution, the company’s complete business support systems (BSS) suite, onto the AWS public cloud infrastructure. AsiaInfo is betting that operators, particularly ones that lack the resources of top-tier global operators, will accelerate their evaluation and adoption of public cloud-based BSS implementations. The reasons include the pay-as-you-grow economics and scaling flexibility that the public cloud infrastructure can provide when compared to private cloud, hybrid private/public cloud, and legacy on-premises implementations. What competitive benefits can AsiaInfo and AWS look to gain in the near-term?

  • Public Cloud Infrastructure Economics Shine: The alliance enables AsiaInfo to capitalize on what it believes are the long-term economic benefits of the public cloud infrastructure. AsiaInfo believes public cloud-enabled software-as-a-service (SaaS) models, such as cloud-based BSS, are best suited to meet core operator operational expenditure (OpEx) and digital transformation requirements. The alliance primarily targets operators in developing regions, as well as Tier2/Tier 3 operators that lack the resources to build out their own public cloud infrastructures. As a result, the AWS partnership enables AsiaInfo to provide a unique selling proposition for its operator cloud-based services by advocating full-scale cloud-based business support system (BSS) implementation on AWS’ cloud.
  • AsiaInfo Reaps Channel Boost with AWS Alliance: Despite its market leadership position in the Asia-Pacific/China BSS market segment, AsiaInfo has made relatively modest, incremental progress in Europe (e.g.., Telenor). With the AWS collaboration, AsiaInfo gains a high-profile global channel outlet that expands its capacity to address a wider range of operator and enterprise cloud adoption opportunities, as well as expand further into Europe and other regions where it has produced a relatively modest presence that trails its China/Asia-Pacific footprint to date. Thus far, AsiaInfo’s main rivals have yet to formally align their cloud-based BSS propositions with AWS.

Despite its optimism, AsiaInfo and AWS face market barriers in convincing operators to migrate core business processes onto public cloud infrastructure, including significant security concerns as well as channel coordination reservations.

  • Operators Still Harbor Public Cloud Security Fears: Even operators with severely limited operations budgets and legacy infrastructure constraints have consistently voiced concerns with entrusting core business processes to public cloud infrastructure such as AWS. Compared to private infrastructure, these operators believe a major security breach is far more likely in a public cloud due to its relatively open architecture. The potential consequences of such a breach have proven a consistent deterrent to accelerating operator adoption of public cloud infrastructure to target managed services at enterprises and small-to-medium sized businesses (e.g., X-as-a-service), let alone cloud-based BSS. An operator’s brand name and reputation can withstand business challenges such as temporary losses of connectivity and isolated billing snafus, but a major security stumble could cause irreversible damage and drive customers to competitors in a hurry.
  • AsiaInfo Risks Overreliance on AWS Channel Priorities: With the AWS alliance, AsiaInfo now has near-term sales and marketing differentiation for its Veris Cloud Core solutions and the Business Internet Platform proposition. However, time-to-market advantages over rivals in formally allying with AWS could prove fleeting over the long term, especially if AsiaInfo generates early market traction. Major BSS rivals such as Huawei, Amdocs, Netcracker, Ericsson, CSG, and Oracle could easily match AsiaInfo by embedding their BSS software on AWS infrastructure and quickly form an official alliance with AWS if their operator customers demand it. Over the next couple of years, AsiaInfo must convince AWS to prioritize resources toward advancing their alliance, especially in the areas of market development activities and professional training support. If and when major AsiaInfo rivals feel obliged to work directly with AWS, AsiaInfo may risk straining its channel resources in competing against an expanding array of alternative BSS suppliers to stay at the top of the AWS channel priority list. As such, AsiaInfo should also consider diversifying its public cloud relations to include major players such as Microsoft Azure and Rackspace in order to hedge against the potential longer-term dilution of the AWS partnership.

Overall, the AsiaInfo/AWS alliance provides a compelling BSS transformation proposition for many operators to investigate when considering the migration of their IT operations toward public cloud implementations. Now AsiaInfo and AWS must prove they can overcome existing operator public cloud reservations and move the needle in the direction of their proposed solution.

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