DriveNets recently shared the results of a survey of telecom network executives conducted by STL Partners indicating that operators recognize the economic value of a hyperscale architecture and the inevitability of disaggregated cloud-native networks, but their perspectives and plans to pursue these goals vary greatly.
Against that backdrop, the report contends that hyperscale economics should be viewed as “an ongoing strategic goal and pursuit” for telcos to remain competitive vis-a-vis cloud service alternatives, and that they should focusfirston the most feasible areas of disaggregation and automation, particularly core networking.
The survey was conducted by STL Partners and sponsored by DriveNets. According to the report, telecom operators view the hyperscale cloud providers in three ways:
- As business partners who can drive new areas of demand and provide infrastructure-as-a-service for operators’ IT and operational payloads
- As threats who reduce operators’ value through over-the-top (OTT) and under-the-network services, commoditizing the operators’ core business
- As models that operators can learn from and adopt business and operational models, and technology innovations
According to Yesmean Luk, Telco Cloud Practice Lead at STL Partners and author of the report, the greatest opportunity for operators is to focus on that last point and the impact that hyperscale economics can have on operator’s costs and capabilities.
“The value of networks has shifted from the networks themselves to the services that run over them,” she said. “We are seeing that through the incredible business growth of cloud providers and the huge breadth of cloud-based services and applications that are being rolled out. As operators evolve to more advanced data-intensive connectivity services such as 5G and fiber to the home, they will benefit from the growing demand for capacity and throughput but as their capabilities grow, they will need to manage costs in a more sustainable and optimal way. A cloud-like architecture has been proven to support that and enable new revenue streams from expanded service offerings and the agility to address these. Hyperscale providers serve as the model.”
Target the core of the network
The report suggests that the networking core is a breakthrough opportunity area for hyperscale economics due to continued growth in network traffic volumes, the maturity of the ecosystem, learnings from earlier network function virtualization (NFV) deployments, and the deployment of 5G standalone (SA) technologies. This holds true for both small and large operators.
