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.