Published: 10/11/2016
Author: Dan Meyers, RCR Wireless

Originally published in RCR Wireless on November 10, 2016

Cloud platforms along with the move towards virtualization technologies have begun to have a significant impact on the way telecom operators run their businesses. Operators have been very active in providing cloud-based options for customers, as well as have begun to use such platforms to enhance their own operations.

These efforts have been bolstered by the growing use of software-defined networking and network functions virtualization, which has allowed telecom operators to more quickly roll out and support the launch of new services like those enabled by cloud platforms.

According to a study conducted by Comptia in late 2014, more than 90% of companies are estimated to already use some form of cloud technology in their operations as they look to scale projects in more cost-effective and nimble ways. A recent Intel Security survey of 1,200 cloud security decision makers across eight countries found 80% of expected IT spend would go towards cloud services within a 16-month period.

For many companies, the move towards the cloud began with on-premise private platforms that were basically data centers where they stored information. However, operating costs associated with such moves have seen a growing number of enterprises – including telecom operators – migrate their business to public storage providers like Amazon Web Services, Microsoft, Google and IBM.

AT&T noted in a recent survey that 33% of enterprises had moved at least some of their data assets into a public cloud environment. A Gartner report noted the average enterprise uses 1,154 cloud services.

Analysts noted telecom operators are still somewhat segregated in terms of how they use private and public platforms, which is connected back to the legacy operating models of many carriers.

“A lot of operators are moving content and application towards cloud platforms, but most of their internal moves are geared towards private cloud deployments,” explained Greg Collins, founder of Exact Ventures. “Most I have talked to are looking exclusively towards private cloud and are in a much better place to secure that content.”

Andy Huckridge, director of service provider solutions at Gigamon, said that while interest in public cloud is indeed growing, many operators are keeping most of their in-house platforms and data centers segregated away on private networks.

But, that’s not to say telecom operators are shy about bringing the public services into their enterprise offerings.

“The industry is sort of moving beyond the public/private definition,” said Eric Hanselman, chief analyst at 451 Research. “One of the big shifts is the move towards hosted private clouds. Someone else owns the data center, but the operators have some level of control.”

AT&T recently boosted its public cloud efforts, announcing deals with Amazon Web Services and IBM. The multiyear deal with AWS calls for the delivery of integrated solutions using each company’s respective cloud and networking capabilities in an effort to provide a migration platform for new customers and greater efficiency for existing customers. The deal is said to target networking, mobility, the “internet of things,” security and analytics.

Details of the collaboration are set to include business cloud networking, with AT&T and AWS working to identify new solutions focused on security, performance and mobility; coordination on introducing AT&T IoT-connected sensors and devices preconfigured to send data into the AWS platform, including integration with AT&T’s recently launched IoT Starter Kit and data plans; and a security focus designed to help customers “prevent, detect and respond to threats,” and bolsters AT&T’s Threat Intellect security platform.

“Hybrid clouds will be the new norm,” explained Andy Daudelin, VP of cloud at AT&T. “When integrated with out private connectivity, public cloud can provide a lot of the benefits of private clouds.”

With IBM, AT&T is offering up its FlexWare platform to support the set-up and running of virtual network functions for services sold to clients and for its own internal operations. AT&T in turn said it will look to run applications on IBM’s cloud, cognitive, analytics and security infrastructure.

AT&T late last year announced plans to transition its managed application and hosting services unit to IBM as well as offload equipment and access to floor space in AT&T data centers currently supporting those operations. The deal called for IBM to include the former AT&T services into its IBM Cloud portfolio targeted at offering enterprise customers a broader suite of networking, application and hosting services. AT&T said it would continue to provide networking services, including security, cloud networking and mobility, working with IBM to deliver integrated solutions to enterprise customers.

For AT&T, the moves are helped by its NetBond platform, which was one of its first SDN-based commercial services it offered to the enterprise market. The platform is designed as a fully managed network and cloud infrastructure connection model targeting a range of cloud service providers.

Software solutions are also allowing telecom operators to integrate public platforms offered by that market segment’s large and established players alongside their own private services.

Technology Business Research senior analyst Chris Antlitz noted earlier this year that carriers like AT&T and Verizon were moving away from the public cloud business due to their inability to gain market share against established competitors such as AWS. Instead, Antlitz said operators are focusing their strategies on providing network connectivity and value-added services to solutions offered by leading service providers and through interconnection platforms such as AT&T’s NetBond.

Vendors noted the move towards more software control has indeed allowed telecom operators an easier path for transitioning services, though there are still challenges in terms of transitioning control from a hardware to a software world.

“In the move to the software world, if the same code that was used for hardware is dumped into software you would have performance issues,” said Myk Konrad, VP of product management and marketing at Sonus “Performance policies would not be anywhere near as efficient as the hardware so you would lose the ability to handle [distributed denial of service attacks]at the same scale. … For the security and encryption you need to find a way to do that and keep the performance up.”

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