Telefonica & AWS Partnership – The End of the Beginning for Private Cloud

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Earlier this month, Telefónica Germany announced it will use Amazon Web Services (AWS) to virtualise its 5G core for a proof of concept (POC) in an industrial use case and plans to move to commercial deployment in 2021. Part of the POC process is to ensure compliance with all applicable data protection guidelines and certifying them according to relevant industry standards.

“With the virtualisation of our 5G core network, we are laying the foundation for the digital transformation of the German economy. This collaboration with AWS is an important part of our strategy for building industrial 5G networks”, said Markus Haas, CEO of Telefónica Germany.

Sentiment about cloud – especially public cloud – has been on a slight roller-coaster ride since they emerged back in the “noughties”: From initial reluctance to reluctant acceptance – to  customer driven enthusiasm to scaling back and migrating back data and apps to on-premises data centres or private clouds to a more recent acceptance, that most enterprise resources may work best in a hybrid or public cloud environment.

Still, the viewpoint of many is still that core resources for the most part belong on-premises – especially if they are essential for the running of the business or involves sensitive data.

It is in this light that the Telefónica Germany announcement is interesting. On the face of it, it may appear that this is a possible major validation of public cloud as a platform for core systems and sensitive data. Although the core network components will remain on a different platform delivered by Ericsson, there is clearly an element of that.

Perception on Public Cloud

Many organisations remain sceptical with regards to public cloud. Ecosystm data shows that almost 40% have private cloud as their primary cloud deployment model (Figure 1); roughly a third have gone for a hybrid model and only around one quarter have chosen a public cloud model.

Primary Cloud Deployment Model

Most cloud deployment strategies ultimately come down to an evaluation of cost vs. risk and this evaluation is clearly demonstrated in Ecosystm data. Close to 80% of those choosing an on-premises private cloud model mention security and compliance as a main reason whereas cost considerations are the main reason for those opting for a public cloud model (Figure 2). What our data also shows is that public cloud providers are not necessarily winning the argument of cost savings among users.

Reasons for Choosing Deployment Model

For many organisations today, security and compliance concerns are still a valid point against public cloud as a primary deployment model. However, as we see more and more initiatives like Telefónica Germany, this argument diminishes – and it will become harder for IT organisations to convince senior management that this is still the way to go.

The Edge Complements the Cloud

The other noteworthy take-away from the Telefónica Germany initiative is how cloud-enabled edge computing is being embraced by the network design to ensure lower latencies for those who need it. The company states, “If companies use 5G network functions based on the cloud-based 5G core network of Telefónica Germany / O2 in the future, they will no longer need a physical core network infrastructure at their logistics and production sites, for example, but only a 5G radio network (RAN) with corresponding antennas.”

As I’m sure that you are an avid reader of Ecosystm Predicts every year, this should not come as a surprise as we wrote about something like this in the Top 5 Cloud Trends for 2020. Although some are touting Edge computing as the ultimate replacement of Cloud, we then believed – and still do – that it will be complimentary rather than competing technology. Cloud-based setups can benefit from pushing computing heavy workloads to the Edge in much the same way as IoT and provides a great platform for managing the Edge computing endpoints.

But to go back to the private cloud bit – while private cloud is not going away in the foreseeable future, we may be starting to see its demise in the more distant future.

To paraphrase a famous Brit: Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning for private cloud.


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Ecosystm Cloud Insights

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Microsoft Set to Acquire Affirmed Networks

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5/5 (1) In The Top 5 Cloud trends for 2020, Ecosystm Principal Analyst, Claus Mortensen had predicted that in 2020, cloud and IoT will drive edge computing.

“Edge computing has been widely touted as a necessary component of a viable 5G setup, as it offers a more cost-effective and lower latency option than a traditional infrastructure. Also, with IoT being a major part of the business case behind 5G, the number of connected devices and endpoints is set to explode in the coming years, potentially overloading an infrastructure based fully on centralised data centres for processing the data,” says Mortensen.

Although some are positioning the Edge as the ultimate replacement of cloud, Mortensen believes it will be a complementary rather than a competing technology. “The more embedded major cloud providers like AWS and Microsoft can become with 5G providers, the better they can service customers, who want to access cloud resources via the mobile networks. This is especially compelling for customers who need very low latency access.”

Affirmed Networks Brings Microsoft to the 5G Infrastructure Table

Microsoft recently announced that they were in discussions to acquire Affirmed Networks, a provider of network functions virtualisation (NFV) software for telecom operators. The company’s existing enterprise customer base is impressive with over 100 major telecom customers including big names such as AT&T, Orange and Vodafone. Affirmed Networks’ recently appointed CEO, Anand Krishnamurthy says that their virtualised cloud-native network, Evolved Packet Core, allows for scale on demand with a range of automation capabilities, at 70% of the cost of traditional networks. The telecom industry has been steadily moving away from proprietary hardware-based infrastructure, opting for open, software-defined networking (SDN). This acquisition will potentially allow Microsoft to leverage their Azure platform for 5G infrastructure and for cloud-based edge computing applications.

Ecosystm Principal Advisor, Shamir Amanullah says, “The telecommunications industry is suffering from a decline in traditional services leading to a concerted effort in reducing costs and introducing new digital services. To do this in preparation for 5G, carriers are working towards transforming their operations and business support systems to a more virtualised and software-defined infrastructure. 5G will be dynamic, more than ever before, for a number of reasons. 5G will operate across a range of frequencies and bands, with significantly more devices and connections, highly software-defined with computing power at the Edge.”

Microsoft is by no means the only tech giant that is exploring this space. Google recently announced a new solution, Anthos for Telecom and a new service called the Global Mobile Edge Cloud (GMEC), aimed at giving telecom providers compute power on the Edge. At about the same time, HPE announced a new portfolio of as-a-service offering to help telecom companies build and deploy open 5G networks. Late last year, AWS had launched AWS Wavelength that promises to bring compute and storage services at the edge of telecom providers’ 5G networks. Microsoft’s acquisition of Affirmed Networks brings them to the 5G infrastructure table.

Microsoft Continues to Focus on 5G Offerings

The acquisition of Affirmed Networks is not the only Microsoft initiative to improve their 5G offerings. Last week also saw Microsoft announce Azure Edge Zones aimed at reducing latency for both public and private networks. AT&T is a good example of how public carriers will use the Azure Edge Zones. As part of the ongoing partnership with Microsoft,  AT&T has already launched a Dallas Edge Zone, with another one planned for Los Angeles, later in the year. Microsoft also intends to offer the Azure Edge Zones, independent of carriers in denser areas. They also launched Azure Private Edge Zones for private enterprise networks suitable for delivering ultra low latency performance for IoT devices.

5G will remain a key area of focus for cloud and software giants. Amanullah sees this trend as a challenge to infrastructure providers such as Huawei, Ericsson and Nokia. “History has shown how these larger software providers can be fast, nimble, innovative, and extremely customer-centric. Current infrastructure providers should not take this challenge lightly.”

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Verizon and AWS team up for 5G Edge computing

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5/5 (1) The benefits of cloud computing are well documented, and it is at the core of most organisations’ modernisation and transformation initiatives. With the predicted increase in IoT uptake, and the associated increase in data collection and processing, technology providers are looking at methods to simplify, secure and speed-up IoT devices connected to the cloud.

 

5G Edge computing

To this end, in order to provide data processing closer to where it is needed, Amazon Web Services (AWS) and Verizon recently announced a partnership to bring the power of cloud computing closer to the edge with 5G network edge computing.

 

Verizon AWS 5G edge computing
Verizon CEO Hans Vestberg at AWS re:Invent 2019

Edge computing brings various cloud services such as computing, networking and applications closer to the devices for local processing. It allows complex processing at the point where the data enters the network and eliminates round-trips involved in sending data from the edge, to the data centre where it gets processed and back to the edge again. To accomplish this, Verizon will offer 5G network and high-volume connections between users, devices and applications and will use AWS’s Wavelength service to deploy applications and process data at the edge. It will then seamlessly connect back to the AWS cloud.

The providers are piloting the project and aiming to deliver a wide range of services which depend on millisecond latencies.

 

New Demand, New Markets

By using AWS Wavelength and Verizon 5G Edge, the resulting edge computing solution will enable developers to build applications that can deliver enhanced user experiences like near real-time analytics for instant decision-making, improve services such as immersive game streaming, and automate robotic systems in manufacturing facilities.

The Ecosystm top 5 IoT Trends For 2020 report authored by Ecosystm Principal Advisors Francisco Maroto and Kaushik Ghatak stated that organisations are currently generating about 10% of their data outside a traditional data centre or cloud. This is predicted to dramatically increase in 2020 with IoT deployments fuelling investments in edge computing. The next year will see a sharp increase in IoT adoption as 5G rollouts gather steam, and this partnership is another indication of the increased interest in edge computing.

“As devices multiply and become smarter, 5G technology will become progressively more important to transfer data at a faster rate and drive edge computing. Real-time analytics will be performed at so many places along the network and infrastructure that IT management will be forced to rethink their distributed and enterprise computing strategies,” the report states.

Another Ecosystm report, the Top 5 Cloud Trends for 2020 report authored by Ecosystm Principal Advisors Claus Mortensen and Craig Baty mentions that “with IoT being a major part of the business case behind 5G, the number of connected devices and endpoints is set to explode in the coming years, potentially overloading an infrastructure based fully on data centres for processing the data.”

Edge computing will allow Cloud providers such as AWS to better cater to companies that need low latency, quick access to data and data processing. On the mobile side, it will allow them to push workloads to the device, reducing the backend workload and potentially enhancing data privacy.

 


The full findings and implications of the report ‘Ecosystm Predicts: The Top 5 IoT Trends For 2020’ and  ‘The Top 5 Cloud Trends for 2020‘, implications for tech buyers and tech vendors, insights, and more are available for download from the Ecosystm platform.


Top 5 IoT Trends Top 5 Cloud Trends for 2020

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