Google Cloud gathers telco momentum with new partnerships

Google Cloud has announced two new partnerships with Telecom Italia, T-Systems and AT&T in an effort to build momentum in the burgeoning enterprise connectivity world.

Starting with Telecom Italia (TIM), Google will help the telco build public, private and hybrid cloud services as enterprise customers become more important in the new era of connectivity. As with every telco, the enterprise segment is one being heavily targeted by TIM, with plans to exceed €1 billion in annual revenues with more attention being paid to cloud and edge services.

“This strategic partnership with Google places TIM among the Italian key players in Cloud and Edge computing, two markets that will become more and more central with the deployment of 5G technology and Artificial Intelligence,” said TIM CEO, Luigi Gubitosi. “By choosing to join forces with a recognised global technological and innovation leader we confirm our commitment to promote and accompany Italy’s digital progress.”

As part of the agreement, Google Cloud will partner with TIM to open new cloud regions in Italy, with the telco suggesting it has developed training programmes involving 6,000 people in the commercial, pre-sales and technical areas. With a larger data centre footprint across the region, new services will be developed focusing on low latency and high-performance cloud-based workloads and data.

Over in Germany, the tie-up between Google and T-Systems will focus on digital transformation and managed services, with T-Systems providing consulting services, migration support and managed services to enterprise customers leveraging Google Cloud capabilities.

“Our joint goal is to support organizations in their digitization and to improve business processes with the cloud,” said Adel Al-Saleh, CEO of T-Systems. “This partnership is a core element of our strategy, generating value-add for our clients with managed cloud services.”

As part of the partnership, T-Systems will create a Google Cloud competence centre which will focus on creating customised cloud solutions and services for its customers. Services will focus on large-scale workload migrations to the cloud, SAP application modernization, development of new AI and ML solutions, as well as solutions for data warehouse and data analytics in the cloud.

Finally, the partnership between Google and AT&T will aim to develop 5G edge solutions in industries like retail, manufacturing and transportation.

“Combining AT&T’s network edge, including 5G, with Google Cloud’s edge compute technologies can unlock the cloud’s true potential,” said Mo Katibeh, CMO of AT&T Business. “This work is bringing us closer to a reality where cloud and edge technologies give businesses the tools to create a whole new world of experiences for their customers.”

Partnerships between local telecoms companies and the internet giants are starting to become more common and Google has been leveraging local expertise and presence. In India, Google has struck a deal with Airtel to offer its productivity suite. This deal was announced a few months after a similar tie up between telco Reliance Jio and Microsoft Azure.

Elsewhere, Google has partnerships with CenturyLink for areas such as cloud enablement, migration services, SAP and big data, NTT Data in Japan, BICS in Belgium and China Mobile, just to name a few.

As the lines between telecoms and ICT continue to blur, these partnerships will become much more common and deeply entrenched. However, there does seem to be a slight shift in mentality, with the telcos bringing network assets to the party and leveraging the cloud power of Silicon Valley. Telcos are highly unlikely to be able to compete with the likes of Google Cloud and AWS when it comes to software and services, so why bother?

There is clearly a lot for both parties to gain from these partnerships, though telcos are leaning more towards working with the cloud giants as opposed to competing with them directly. Perhaps a much more sensible approach.

The edge will make us cash, but we need to be quick – DT

With telcos searching for elusive return on investment in a 5G world, edge computing could offer some relief.

Speaking at Total Telecom Congress in London, Arash Ashouriha, SVP of Technology Architecture & Innovation at Deutsche Telekom pointed towards the edge as a way to recapture the lost fortunes of yesteryear, but better move quickly or those crafty OTTs will swoop in again.

“With 5G, of course the consumer will benefit, but the challenges are mainly with enterprises; how you build specific solutions on one network, using network slicing,” said Ashouriha.

“What is the real opportunity for operators in avoiding becoming a dumb pipe? It’s going to be the edge. Whatever happens, only the operator can provide the next POP on the mobile phone, never forget that. Are we able to monetize this? If you want to achieve low latency, you have to process the traffic where it is being generated, not 100km away. From an operator perspective, this gives a huge opportunity to leverage the network.”

The theory here is simple. For those usecases which require near real-time transactions, autonomous driving or robotic surgery for example, low latency is critical. Unfortunately, the speed at which data can be moved has a limit, that is just physics, in order to guarantee low latency processing power has to be moved closer to the event. This is an excellent opportunity for the telcos to make money.

However, there is only a small window of opportunity, Ashouriha thinks it might only be two or three years. If the telcos do not take advantage and create a business to capitalise on the edge, the OTTs will swoop in and reap the rewards. All the likes of Google or AWS need to build such a business model is a partnership with one MNO in a market, then the cloud players can leverage the power of their cloud assets to build the case for low latency.

This is the challenge for the telcos; the opportunity is there and very apparent, but are they swift enough to capitalise on it? It certainly wasn’t the case for value added services and it seems the battle for control of the smart home has been lost, with Google and Amazon successfully positioning the smart speaker (not the router) as the centre of the ecosystem. The telcos need to react quickly, as you can guarantee the cloud players are eyeing up the opportunity.

One of the challenges, as Ashouriha points out, is industry collaboration. It doesn’t matter if you are the biggest, baddest telco around, no-one has 100% geographical coverage. To make this edge orientated service work, the telcos will have to develop some sort of framework where holes in connectivity can be plugged by competitors.

To tackle this challenge, DT has spun-off a business in Silicon Valley called MobiledgeX to create a platform where telcos plug in to create an always-connected experience for an ecosystem to build products and services on top of. It’s an interesting idea, and certainly a step in the right direction to capitalise on the edge opportunity.

With the billions being spent to develop 5G networks there is no single silver bullet to realise the ROI, but building a portfolio of services and business models will certainly get the telcos across the line. They just have to get better at capitalising on the opportunity when it presents itself.

Deutsche Telekom: Best-in-class experience

Deutsche Telekom (DT) has the clear ambition to be a leading European telco, with digitalization a key part of its strategy. In 2016, DT increased its revenue by 5.6 percent year-on-year to reach €73.1 billion based on high investment in its networks. DT CTO Bruno Jacobfeuerborn explained how the German operator is ramping up its network strategy during digital transformation.

Click here to read more