Cloud vendors and CSP: now is the time to cooperate
CSP must
decide whether to adopt a public cloud or a private cloud approach from the
perspective of supervision and key tasks, which parts of the network are
targeted, and when.
Hyperscale
cloud vendors are investing tens of billions of dollars to build infrastructure
including data centers, monitoring systems, and software. As the world's
largest cloud service provider creates a centralized market for an invaluable
service, it opens the door to communication service providers (CSPs) that do
not take action to address potential challenges. Although centralized cloud
services may cause potential setbacks, CSPs can only develop their business
models and unlock new profit opportunities by embracing the cloud-making it a
key success factor.
The new
crown epidemic has increased and exacerbated the existing challenges of CSP,
such as the increase in capital and IT operating expenses and the surge in
network demand. It is vital for CSPs to cooperate with large enterprises in the
future, especially for their core and business application clouds. Today, most
CSPs operate in a private cloud model. However, when they decide on their cloud
computing evolution strategy, it will be very important to understand the
strategic impact of their choice, whether it is cost, performance, or long-term
competitiveness. Therefore, the CSP must decide whether to adopt a public cloud
or a private cloud approach from the perspective of supervision and key tasks,
which parts of the network are targeted, and when.
CSP's
critical opportunity stage
Despite
these challenges, business and technological disruptors' changes to our current
model have created huge opportunities for CSPs. The core of this is digital
transformation, which also hinders the process of many companies deciding on
cloud providers.
A major part
of the digital transformation includes the shift to the cloud, enabling CSPs to
expand and expand connections to connect everything and everyone, and reduce
the digital divide. With the development of cloud-native network functions,
CSPs will be able to provide 5G connections and services on a large scale.
Deploying services and products on the cloud can help CSPs meet consumer needs
and lead to new and expanded 5G use cases such as telemedicine and e-sports.
In addition,
CSP has been deploying 5G faster than ever in order to bring a new customer
experience and help enterprise customers turn to Industry 4.0. CSPs who want to
achieve these capabilities must evolve their single, static core into a
decomposed, dynamic core. This will enable broader system innovation, allowing
continuous software updates, rapid expansion, and greater flexibility and
security. With this in mind, now is a critical moment for CSP to deploy its
core network on a hyperscale public cloud to achieve faster time to market,
investment flexibility, faster operations and new business opportunities. In
this way, they can transfer the complexity of the cloud to the cloud provider,
and instead focus on service differentiation, while benefiting from the
analysis expertise and ecosystem innovation of the hyperscale provider.
Opportunities
and risks of partnership between CSP and cloud vendors
For CSP, its
goal is to increase revenue beyond traditional connections. Although many
people have the credibility, capabilities, and relationships needed to provide
value during the coordination phase, some believe that much work still needs to
be done. Specifically, a lot of investment is needed to build the right
capabilities, skill sets, processes, and operating models to increase revenue.
The reality is that many operators lack resources or manage bandwidth to serve
all industries. Therefore, operators need to strategically choose the target
industry they want to hone, what they can realistically achieve there, and who
they should cooperate with, such as large enterprises, to succeed in this
field.
Of course,
every strategic decision has its opportunities and risks. The goal of CSP
leaders is to find a middle ground for good partnerships without exceeding
value.
As for
opportunities, a key benefit of the partnership includes speeding up the time
to market for new services. These cloud providers have scalable capabilities
and tools, which means that partnerships can achieve software-centric case
development. CSPs can also gain access to the developer ecosystem and community,
as well as enhanced software skills and capabilities, especially in AI/ML. In
addition, hyperscale companies with significant market power and public cloud
products are quickly becoming a new standard.
For risks,
CSPs may fall into the trap of simply providing traditional connection and
management services. At the same time, large companies will develop more
valuable software and computer-centric services. In addition, there is also the
risk of large-scale dependence, causing CSPs to lose their grasp of their
unique products and the ability to develop core network functions. This may
lead to vendor lock-in, especially when CSPs are evolving their network
functions and deploying them to the cloud.