Summary Bullets:
- Carriers will increasingly incorporate the public cloud into their infrastructures, requiring their partners to help them with hybrid and multicloud management as well as edge capabilities.
- Greenfield transformation champions Rakuten, Dish, and Jio will have to show results in 2021.
2020 turned out to be a bye year in the predictions game. Having painstakingly teased out the incipient trends for the year, analysts watched as COVID-19 upturned everything, forcing telcos to reallocate their network CapEx and vendors to scramble to add cloud capacity, develop new analytics, and adjust their deployment services. While 2020 sped up operators’ moves toward cloudification, it also delayed non-essential projects as well as work on the standards that will help mobile carriers to monetize their extensive investments in 5G infrastructure. While the coronavirus will continue to affect telecoms transformation in 2021, it is now baked into telcos’ plans, allowing – we hope – more certainty about the events of the coming year.
Here are our four best guesses for the telco ecosystems and operations in 2021:
Hyperscalers Increase Their Differentiation
To date, telcos have been slow to put their central functions on the public cloud, because they did not trust its reliability or data protections. Now, hyperscalers like Azure, AWS, and Google Cloud, as well as more traditional vendors like IBM and HPE, are introducing sufficiently granular data geographies and increasingly robust performance guarantees, and carriers’ orchestration capabilities are starting to improve to the point that they can jointly incorporate the public cloud into carrier-grade infrastructure. Until recently, though, hyperscalers have not displayed much differentiation on the feature level. While all will still try to capture territory on the carrier edge, major hyperscalers will increasingly pitch different solutions in 2021:
- After hiring several senior industry veterans, AWS seems set on becoming a one-stop shop for edge computing and enterprise service development.
- With its acquisition of Affirmed Networks and Metaswitch, Microsoft is on its way to delivering a complete core network from the public cloud through its ‘Azure for Operators’ portfolio.
- Since it announced a slate of telecoms offerings last spring, Google Cloud has been quieter, but will continue to leverage its ownership of Kubernetes and Anthos to court the engineering staffs of the operators.
- Hyperscale challengers like IBM, HPE, and – to a certain extent – Oracle will emphasize openness, free data migration, and enterprise expertise to try to maximize their own pieces of the telco pie.
The Assurance Market Consolidates
The telecoms industry has too many assurance vendors. Each has deep expertise in one or more aspects of the assurance problem: infrastructure monitoring, service monitoring, rule sets for root cause analysis, AI-based anomaly detection, component databases, alerting, cloud delivery, and so on. These capabilities are necessary but not sufficient to the closed-loop automated operations that the industry requires. Currently, it is nearly impossible for telcos to acquire fully automated network operations capabilities on an end-to-end, best-of-suite basis. In 2021, a wave of M&A will stitch together the monitoring, analysis, emulation, and orchestration specialists necessary to detect and fix problems before they affect service quality.
Greenfield Champions Will Need to Show Success
In 2019 and 2020, Rakuten was the darling of industry coverage as it built out a greenfield network using non-traditional technology and in many cases non-traditional vendors. Reliance Jio and Dish – Rakuten’s older and younger greenfield cousins – also saw a lot of industry press as they went through their own versions of this disaggregated, cloudified journey. Both Rakuten and Jio are packaging their technology for sale to other telcos that want to follow in their footsteps, but Dish – which is also adopting open RAN and was considered a possible first customer for the Rakuten Cloud Platform – instead selected more traditional vendors for its network orchestration. Rakuten has formed a loose technology alliance with Dish, STC, and Telefonica, but it will have to prove itself on its own in 2021, achieving its coverage, service quality, and subscriber goals for 2021 if it is to sell its system to others. Similarly, all three carriers will have to show that their networks are providing benefits to paying customers if the vendors that are making them their marquee clients are to convince other carriers to adopt their solutions.
5G Requirements Grow Beyond the 3GPP
With the 5G-related Releases 15 and 16 finalized and Release 17 delayed due to COVID-19, the industry will go through a bit of a catchup period. Since many elements of R17 relate to network slices and the new services they will enable, the delay will soften any first-mover advantage that might have otherwise been gained by early spending telcos as their rivals implement the same technology. At the same time, carriers are so interested in ORAN and public cloud that for all intents and purposes those topics will be part of most 5G partnership discussions. In addition to their 5G bona fides, vendors will therefore have to demonstrate expertise in ORAN systems integration as well as hybrid and multicloud management.