Cloud Titans Have an Eye on the Edge


By: Mary Jander

A new market is coalescing in COVID-19’s wake. Faced with rising Internet and mobile traffic and a "pause" in enterprise premises buildouts, leading cloud providers and telecom companies are forming alliances, driven by anticipated demand for 5G-based business and consumer services.

The partnerships are focused on the network edge, where public and private cloud services connect to the telco network via mobile edge computing or, more accurately, multi-access edge computing (MEC) technologies.

Both cloud providers and telcos hope to profit from a mobile edge cloud that enables customers, including enterprises and managed service providers, to quickly “monetize” 5G. Anticipated are services for high-speed remote business, work from home (WFH), and consumer gaming, video, and e-commerce.

Cloud Players Roll Out Telco Tools

The cloud-to-telco connection combines development tools from the cloud side with specific telco MECs designed to migrate to 5G.

Amazon Web Services (AWS), the cloud subsidiary of Amazon (Nasdaq: AMZN) for instance, offers its Wavelength platform for telecom partners. Its telco integration partners — the ones who plan to offer services jointly with AWS by integrating the cloud services directly into their MECs — include Verizon, Vodafone Business, South Korea’s SK Telecom, and KDDI. Of these, Verizon seems farthest along, having started testing in Chicago last year.

Microsoft (Nasdaq: MSFT) recently unveiled Azure Edge Zones, a platform that allows third parties, including telcos, to use Azure to host, coordinate, and improve the performance of remote work, online gaming, enterprise infrastructure, and Internet of Things (IoT) applications. Microsoft has announced cooperative agreements with AT&T, SK Telecom of South Korea, and India’s Reliance Jio Infocomm Ltd., as well as Etisalat, NTT Communications, Proximus, Rogers, Telstra, and Vodafone.

Microsoft also recently arranged to buy 5G orchestration startup Affirmed Networks and telecom software maker Metaswitch to expand its ability to link all kinds of customers to the network edge.

Alphabet's Google (Nasdaq: GOOGL)
is building its own edge cloud with Anthos for Telecom, which is part of its Global Mobile Edge Cloud strategy. Plans include a deal to deploy AT&T’s 5G services for enterprise users of Google Cloud Platform (GCP).

Multi-Cloud, Hybrid-Cloud Support Is Key

Public cloud players are aware that enterprise customers will demand multi-cloud support, which means their telco alliances must incorporate links to other vendors’ clouds. Hence there's lots of overlap across all the partnerships between cloud providers, telcos, and equipment or software providers.

Additionally, other players, such as Hewlett-Packard Enterprise Co. (NYSE: HPE) and IBM (NYSE: IBM) are throwing strategic weight behind hybrid cloud and multi-cloud via their own telco edge solutions.

Cloud Players Plan Their 5G Future

While progress in 5G has been delayed due to COVID-19, the technology is moving ahead slowly but surely. In a recent podcast, Chris Pearson, president of industry group 5G Americas, said he expects 5G deployments worldwide to more than double by the end of 2020 from about 69 now. And recent news out of China claims government-backed 5G rollouts are “back on track,” adding 10,000 base stations per week.

Meanwhile, cloud suppliers are looking ahead to ever-greater roles in 5G service delivery. Microsoft’s purchase of Metaswitch; Alibaba’s recent creation of its own 5G research lab; Facebook’s investment in India’s Jio; and Tencent’s pledge to devote $70 billion over the next five years to growing its infrastructure, including 5G, demonstrate how serious cloud vendors are about dominating in 5G services. Streamlining the creation of specific services is the start.

Despite all this, some experts don’t foresee cloud vendors supplying everything at the edge. Cisco Distinguished Engineer Mike Dvorkin, for instance, distinguishes between suppliers of virtualized cloud applications and the virtualized networking elements that underlie them.

Perhaps this split would herald a new kind of service provider, or a new role for existing telcos, or even a new kind of division within public cloud companies. None of this will be clear, though, until 5G evolves to the next level -- with help from cloud-telco alliances.