Making Sense of the Telco Cloud

In recent years the cloudification of communication networks, or “telco cloud” has become a byword for telecom modernisation. This Telecoms.com Intelligence Monthly Briefing aims to analyse what telcos’ transition to cloud means to the stakeholders in the telecom and cloud ecosystems. Before exploring the nooks and crannies of telco cloud, however, it is worthwhile first taking an elevated view of cloud native in general. On one hand, telco cloud is a subset of the overall cloud native landscape, on the other, telco cloud almost sounds an oxymoron. Telecom operator’s monolithic networks and cloud architecture are often seen as two different species, but such impressions are wrong.

(Here we are sharing the opening section of this Telecoms.com Intelligence special briefing to look into how telco cloud has changing both the industry landscape and operator strategies.

The full version of the report is available for free to download here.)

What cloud native is, and why we need it

“Cloud native” have been buzz words for a couple of years though often, like with many other buzz words, different people mean many different things when they use the same term. As the authors of a recently published Microsoft ebook quipped, ask ten colleagues to define cloud native, and there’s good chance you’ll get eight different answers. (Rob Vettor, Steve “ardalis” Smith: Architecting Cloud Native .NET Applications for Azure, preview edition, April 2020)

Here are a couple of “cloud native” definitions that more or less agree with each other, though with different stresses.

The Cloud Native Computing Foundation (CNCF), an industry organisation with over 500 member organisations from different sectors of the industry, defines cloud native as “computing (that) uses an open source software stack to deploy applications as microservices, packaging each part into its own container, and dynamically orchestrating those containers to optimize resource utilization.”

Gabriel Brown, an analyst from Heavy Reading, has a largely similar definition for cloud native, though he puts it more succinctly. For him, cloud native means “containerized micro-services deployed on bare metal and managed by Kubernetes”, the de facto standard of container management.

Although cloud native has a strong inclination towards containers, or containerised services, it is not just about containers. An important element of cloud native computing is in its deployment mode using DevOps. This is duly stressed by Omdia, a research firm, which prescribes cloud native as “the first foundation is to use agile methodologies in development, building on this with DevOps adoption across IT and, ideally, in the organization as well, and using microservices software architecture, with deployment on the cloud (wherever it is, on-premises or public).”

Some would argue the continuous nature of DevOps is as important to cloud native as the infrastructure and containerised services. Red Hat, an IBM subsidiary and one of the leading cloud native vendors and champions for DevOps practices, sees cloud native in a number of common themes including “heavily virtualized, software-defined, highly resilient infrastructure, allowing telcos to add services more quickly and centrally manage their resources.”

These themes are aligned with the understanding of cloud native by Telecoms.com Intelligence, and this report will discuss cloud native and telco cloud along this line. (A full Q&A with Azhar Sayeed, Chief Architect, Service Provider at Red Hat can be found at the end of this report).

The main benefits of cloud native computing are speed, agility, and scalability. As CNCF spells it out, “cloud native technologies empower organizations to build and run scalable applications in modern, dynamic environments such as public, private, and hybrid clouds. Containers, service meshes, microservices, immutable infrastructure, and declarative APIs exemplify this approach. These techniques enable loosely coupled systems that are resilient, manageable, and observable. Combined with robust automation, they allow engineers to make high-impact changes frequently and predictably with minimal toil.”

To adapt such thinking to the telecom industry, the gains from migrating to cloud native are primarily a reflection of, and driven by, the increasing convergence between network and IT domains. The first candidate domain that cloud technology can vastly improve on, and to a certain degree replace the heavy infrastructure, is the support for the telcos’ own IT systems, including the network facing Operational Support Systems and customer facing Business Support System (OSS and BSS).

But IT cloud alone is far from what telcos can benefit from the migration to cloud native. The rest of this report will discuss how telcos can and do embark on the journey to cloud native, as a means to deliver true business benefits through improved speed, agility, and scalability to their own networks and their customers.

The rest of the report include these sections:

  • The many stratifications of telco cloud
  • Clouds gathering on telcos
  • What we can expect to see on the telco cloud skyline
  • Telco cloud openness leads to agility and savings — Q&A with Azhar Sayeed, Chief Architect, Service Provider, Red Hat
  • Additional Resources

The full version of the report is available for free to download here.

Network outages costing enterprise customers millions

In years gone, internet downtime would have been considered a first world problem, but now it is costing enterprise organisations millions every time a digital baron period emerges.

With connectivity as the foundation of almost every business nowadays, few can operate without a stable internet connection. From the delivery of mission critical data to the functioning of tills and credit card machines, a digital blackout will cost businesses money.

According to a survey from Open Gear, only 8% of respondents suggested network downtime had cost them nothing. 31% stated outages had cost their business more than $1.2 million while a further 17% said such shutdowns hit revenues by more than $6 million. It should come as little surprise 83% of the respondents said network resilience was their number one concern.

With the coronavirus pandemic further increasing dependence on communications networks, thanks to coerced remote working practices, a stable network becomes ever more important. Another interesting element is the ever-increasing distribution of a network; problems are no-longer contained to the data centre.

Services like Netflix has found a more accommodating home on the network edge, with last mile services and remote locations being used to cache content for users. The idea is to reduce latency and remove choke points on the network, but redundancy cannot always be built into the site and on-site engineers are very rare.

42% of the survey respondents stated the problem in remedying the outage was getting engineers to the site, a challenge which will only be compounded as the network becomes more distributed and the edge becomes more prominent.

There are two key trends which could accelerate the edge which are worth keeping an eye on. Firstly, telcos are partnering up with the major cloud players to ensure more edge services can be offered to enterprise customers. Telecom Italia has an extensive relationship with Google Cloud, for example, while Verizon is firmly in bed with Amazon Web Services (AWS).

The second interesting trend is the cloud players gaining competency in the telco segment, perhaps reducing reliance on telco partnerships (relegating the telco to a commoditised partner). The cloud players also have deeper existing relationships with enterprise companies, maybe accelerating the edge trends. Microsoft acquiring Affirmed Networks and Metaswitch Networks are two examples, as is the hiring spree the cloud players have undertaken over the last 18 months.

The edge presents a significant opportunity for the telcos, assuming they are not designated the role of ‘dump pipe’ but it also presents major challenges. Network resiliency is a hurdle for a functional digital society, but it is one which can be addressed with the tools available today, such as artificial intelligence and network automation.


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Online gaming seems coronavirus proof, but is it recession proof?

Online entertainment and gaming companies are seeing COVID-19 surges in revenues, but are these businesses in a position to resist the pressures of a global recession?

With many countries around the world entering into recession due to the impact of the coronavirus pandemic, online gaming companies will face challenges like never before. Let’s not forget, this is a segment which did not exist during the last major financial downturn, the ‘Great Recession’ of 2008, and it is almost entirely reliant on discretionary income.

This is of course a massive question which should not be taken at surface value, but the up-coming recession has the potential to completely turn this industry on its head. However, for the moment, there is money to be made thanks to circumstance.

How are the gaming companies getting on now?

In short; very well.

Activision Blizzard has released its 2020 first quarter results, and while the figures might be down on the same period of 2019, outlook is considerably better than the forecasts provided by the company on February 6.

Total revenues for the three months ending March 31 were $1.79 billion, down 2.1% year-on-year, but 9% up on the guidance which was offered to investors in February. This guidance was offered before the full impact of COVID-19 was comprehendible, so it understandable that estimates were off.

The Call of Duty title has been credited with much of the success, most notably the mobile game which was launched in late-2019 and the Warzone addition. Warzone was launched under a free-to-play business model, with in-game purchases, and has attracted more than 60 million users.

Elsewhere, Electronic Arts has also released financial statements for the period ending March 31. Total revenues for the three months increased 14.4%, 3% higher than what was forecast in January while net income was up 5% on the guidance offered. Digital revenues now account for 78% of the total, a transformation which has been taking place over the last few years.

FIFA 20 and Madden NFL 20 both excelled for Electronics Art in the sports gaming segment, with the latter recording the “highest engagement levels in franchise history”, while Apex Legends was the most downloaded free-to-play game on the PlayStation platform in 2019 and continued to excel through 2020.

These are only two examples of gaming companies who have benefitted from societal lockdown protocols, but there are numerous others including Microsoft with Xbox and its cloud gaming platform Project xCloud.

In short, more people are locked in doors and need entertaining. More are turning to gaming.

Telco data backs up the financials

With more people staying at home, there was a risk strain would be placed on broadband networks as these are assets which have not been deployed with the current societal lockdown in mind.

Video conferencing is on the up, content streaming is skyrocketing, and gaming is entertaining adults and children alike. All of these elements add up to pressure on the network, though many are performing admirably.

In March, Telecom Italia Luigi Gubitosi suggested network traffic had increased by as much as 70% in some regions, with Call of Duty and Fortnite usage some of the more prominent contributors. Performance of the networks were a worry, but these fears have now been addressed.

Who should we be keeping an eye on?

There are a lot of companies who will be releasing financial statements over the next week, all of which will be inclusive of at least some of the lockdown period.

  • 7 May: Nintendo
  • 13 May: Tencent
  • 13 May: Nexon
  • 13 May: Sony
  • 14 May: Ubisoft

Due to the number of private companies and start-ups in this segment, it is difficult to gain full visibility into the financial gains, but usage reports and download statistics can help. Ultimately, it is a fair assumption this is a segment of the technology industry which is benefitting from the on-going COVID-19 pandemic.

The financial risks have been predicted

In October 2019, the International Monetary Fund (IMF) held a press conference during which the risk of indebtedness was discussed in detail.

“In the event of a material economic slowdown, the prospects would be sobering,” said Tobias Adrian, Director of the Monetary and Capital Markets Department of the IMF.

“Debt owed by firms unable to cover interest payments with earnings, which we refer to as corporate debt at risk, could rise to $19 trillion in a scenario that is just half as severe as the global financial crisis.”

$19 trillion would account for 40% of the total corporate debt in the worlds’ eight largest economies. Of course, much of this rhetoric refers to traditional organisations and those who are already in precarious situations, but it does demonstrate risk.

Adrian stated six months ago that there was a corporate debt bubble building. The accessibility of borrowing facilities over the last decade, as well as tendency to stretch asset valuations, has led to a tsunami of debt. External debt has risen to 160% of exports according to Adrian, compared to 100% in 2008.

This does not necessarily directly correlate to the online gaming sector, but it is good to place the current situation into context. Last October, the IMF warned of a corporate debt bubble which would burst during a recession, compounding the misery and extending the financial downturn. This is the reality which the world is facing today.

Could be a short, but sharp downturn

Coutts bank has recently suggested the financial downturn would be a recession, but the depth would not extend to a depression.

“The current recession will without doubt be very deep and widespread,” the company said in a blog post. “Unemployment has risen significantly, and a wide range of sectors are affected.

“But we think the recession will be short-lived, and that’s the key to our cautious optimism. With economic activity plunging so deeply, even a slow, partial re-opening of the economy is likely to lift activity from these extreme lows.”

Although financial data demonstrated the downturn has been dramatic, there are few deep-seated systemic problems standing in the way of a recovery. The economy will not bounce back overnight, but recovery should be swift assuming there is not a secondary wave of infections.

This is the big question which many companies will be facing; how long will the recession last?

There will be an inflection point on the horizon

Companies who are benefiting from the societal lockdown will have to be wary of the inflection point in fortunes.

People being locked indoors is fine for a while, but soon enough it will start having a very material impact on the economy. When this happens, unemployment could rise, and consumer spending habits are altered. Discretionary income could disappear, and belts would be tightened as a result.

In this scenario, money spend on online gaming habits would almost certainly be cut back, turning the fortunes into flounders.

What is worth noting is this is based on assumption. The online gaming segments were nowhere near as prominent as they are today. In 2008, online gaming was a niche, it was pre-4G hitting mainstream markets while few console games had the internet appeal they do today. eSports would have been considered an absurd idea.

We cannot explicitly state what would happen to the gaming industry during a recession, as there is no precedent, but it is a safe assumption that it would not do very well.

What could happen?

Speculation is always a good bit of fun and should the gaming industry head towards uncomfortable times there certainly could be a dramatic amount of disruption.

There are of course multinational corporations who have profited from the shift to online gaming, but there are numerous start-ups who have shot to fame on the back of a viral hit. The likes of Angry Birds catapulted Rovio to fortunes, while Imangi Studios has experienced sustained success from less complex games such as Tempe Run.

Outside these blockbuster hits, there are thousands of developers who have profited handsomely from online gaming, ensuring the ecosystem is incredibly wide and diverse. Many of these companies are still private, spurred on by revenues flowing through the app economy. Should a recession halt this flow of cash, these companies would suffer.

Industry consolidation could be a reality, with multi-nationals snapping-up cut-price opportunities. Tencent is one company which has grown via acquisition, taking up stakes in the likes of Riot Games, Supercell, Activision Blizzard, Glu Mobile and Grinding Gears Games. Organisations like this must be licking their lips with a prospect of a recession; an opportunity to grow a digital empire through the acquisition of distressed assets.

Venture Capitalists will also have an eye on this area, though this would allow the start-ups to maintain some level of independence. They may have to hand over stakes at depreciated valuations to do so, however.

Interestingly enough, a recession could also present a significant opportunity for the ad-supported, free games. Online advertising demand might decrease, but it certainly wouldn’t disappear entirely. And consumers will still have to be entertained. This could supercharge a segment which is often overlooked in favour of more attractive cousins in the online gaming ecosystem.

Just enough but not too much

The fortunes of the online gaming industry are hanging in the balance somewhat. Yes, societal lockdown is benefiting this segment right now, but recovery will need to come before the inflection point.

The longer this lockdown persists, the greater the risk of a longer-term recession and a downturn for the online gaming segment. Just enough lockdown is a profit machine, too long could mean a very detrimental net loss.

OpenRAN lobby group forms in US with 31 founding members

A new lobby group has emerged in the US, known as the Open RAN Policy Coalition, with a mission to guide policy making and encourage the promotion of the OpenRAN movement.

OpenRAN is of course gathering momentum across numerous different segments of the telecoms industry, though it is still in its embryonic days. It will be years before OpenRAN can materially challenge the status quo in the network infrastructure ecosystem, but assistive government policy and a generous regulatory environment could certainly accelerate this roadmap.

“As evidenced by the current global pandemic, vendor choice and flexibility in next-generation network deployments are necessary from a security and performance standpoint,” said Diane Rinaldo, Executive Director of the Open RAN Policy Coalition, though we aren’t too sure how the two are related.

“By promoting policies that standardize and develop open interfaces, we can ensure interoperability and security across different players and potentially lower the barrier to entry for new innovators.”

As a technology set, OpenRAN disaggregates radio, hardware and software components of telecoms networks. The objective is to offer the opportunity for telcos to build networks through a modular design, selecting each component on its own merit as opposed to proprietary technologies which bundle everything together and potentially create vendor lock-in situations.

Theoretically, networks should be cheaper to deploy as there would be greater diversity in the supplier ecosystem with specialists emerging in each segment.

The purpose of this group is as most would expect; to influence government policy for OpenRAN technologies and to encourage enforced diversity in telecoms supply chains. The group will push for policies which are more overtly in support of open and interoperable wireless technologies, funding R&D, lower barriers for 5G deployment and use government procurement to support vendor diversity.

Much of what is being said is hardly different from the corporate and meaningless jargon which litters the industry thanks to the influence of PR agencies who have little more than surface knowledge, but some of the policy objectives are quite interesting:

  • Signal government support for open and interoperable solutions: Perhaps this is suggesting the group will push governments to pick a camp and actively promote open technologies
  • Use government procurement to support vendor diversity: Should the lobby be successful, maybe there will be regulatory requirements to incorporate open technologies into any network which receives public funds
  • Avoid heavy-handed or prescriptive solutions: Could these mean an end to proprietary technologies through legislation?

For some, this might seem like a worrying development (Ericsson, Nokia or Huawei are hardly going to be thrilled) but the move has been welcomed by others in the industry.

“The launch of the Open RAN Policy Coalition shows the momentum building behind a more competitive, innovative, technology ecosystem,” said Attilio Zani, Executive Director of the Telecom Infra Project.

“At the heart of TIP’s work is the development and deployment of open, disaggregated, standards-based solutions – that are developed in conjunction with the operators. This, together with a supportive policy environment that allows new technology to flourish, will create greater opportunities for new entrants and a more diverse supply chain that will ultimately transform the industry to deliver the high-quality connectivity that the world needs – now and in the decades to come.”

The emergence of a formal lobby group is another step towards the breakthrough of Open RAN technologies, though momentum is already gathering very quickly in the US.

In protest against China emerging as the powerhouse of the 5G era, the US Government has been quick to jump on the Open RAN bandwagon. This preference serves two purposes for the US Government; firstly, it dilutes the influence Chinese infrastructure vendors have on the industry, and secondly, it stimulates the creation of US infrastructure companies. There aren’t many US names in the RAN game currently.

Earlier this year, a bill was introduced to Congress to provide up to $1 billion of federal funds to create Western-based alternatives to Chinese equipment providers Huawei and ZTE.

“Every month that the US does nothing, Huawei stands poised to become the cheapest, fastest, most ubiquitous global provider of 5G, while US and Western companies and workers lose out on market share and jobs,” said Senator Mark Warner, a particularly vocal critic of China.

“Widespread adoption of 5G technology has the potential to unleash sweeping effects for the future of internet-connected devices, individual data security, and national security. It is imperative that Congress address the complex security and competitiveness challenges that Chinese-directed telecommunication companies pose.”

OpenRAN technologies are not a market-ready alternative for traditional RAN equipment in most circumstances now, though there is swift progress being made. With the likes of Rakuten and Dish championing open networks, the status quo is beginning to shift, which will only be accelerated with political support. The formation of this lobby group to compound existing support in the US political aisles is a very interesting development.

Founding members of Open RAN Policy Coalition:

Airspan, Altiostar, AWS, AT&T, Cisco, CommScope, Dell, Dish Network, Facebook, Fujitsu, Google, IBM, Intel, Juniper Networks, Mavenir, Microsoft, NEC Corporation, NewEdge Signal Solutions, NTT, Oracle, Parallel Wireless, Qualcomm, Rakuten, Samsung Electronics America, Telefónica, US Ignite, Verizon, VMWare, Vodafone, World Wide Technology, and XCOM-Labs.

IBM still searching for its place as it targets the edge

IBM’s struggle over the last decade has been well documented, but with a pivot following a pivot, the $34 billion Red Hat acquisition is beginning to make waves.

Today marks the launch of IBM’s Think Digital event, a virtual conference to discuss everything and anything IBM. There will of course be numerous announcements across the extravaganza, but the Red Hat focused boasts are some of the most interesting.

“In today’s uncertain environment, our clients are looking to differentiate themselves by creating more innovative, responsive user experiences that are adaptive and continuously available – from the data centre all the way out to the edge,” said Denis Kennelly, GM of IBM Hybrid Cloud.

“IBM is helping clients unlock the full potential of edge computing and 5G with hybrid multi-cloud offerings that bring together Red Hat OpenShift and our industry expertise to address enterprise needs in a way no other company can.”

Multi-cloud is a term which will become increasingly important over the next few years, as enterprise organisations aim to realise the power of cloud computing, marrying the benefits of ‘best in breed’ with rationalisation projects to improve operational efficiencies. On top of these complex operational challenges, the edge is becoming a much more prominent proposition for all in the ecosystem.

Built on Red Hat OpenShift, IBM will now offer several new services and products to enable companies in this new digital environment. The Edge Application Manager or Network Cloud Manager, for example, take IBM into new segments in the on-going pursuit of relevance.

“IBM’s new version of Edge Application Manager and introduction of Telco Cloud Manager is part of IBM’s hybrid cloud strategy which is now extending through telcos to the edge,” said Nick McQuire, VP of Enterprise Research. “The moves essentially put IBM’s marker down on edge computing which represents a new era of computing outside the data centre and the public cloud.

“With the emergence of 5G and low-latency applications which are acting as accelerators, telcos too must transform so IBM is hoping that its relationships with telcos globally, though Red Hat and its services and arm, will make it better placed than the hyper-scalers to take advantage of this shift.”

As McQuire points out, this is an effort to further differentiate the business, but also evolve the company to ensure it is operating in more sustainable markets in the future. The issue over the last few decades has not only been IBM’s relevance to market trends, but also its ability to compete in the new segments.

In January 2018, IBM reversed a trend which had been haunting the management team. This earnings call offered investors the first period of year-on-year revenue growth for almost six years. Big Blue had been on the decline, but it seemed to be turning around the business with its cloud computing unit and AI proposition Watson leading the charge.

However, the business failed to accelerate around the turned corner.

In the cloud computing segment, IBM failed to keep pace with market leaders, falling off as Amazon Web Services, Microsoft Azure and Google Cloud proved they were in a different league to the rest. And in AI, the segment has not boomed as some might have anticipated, though IBM still has one of the worlds’ leading technologies in Watson.

With these two ventures failing to live up to the lofty promise, although they did push the IBM business back into growth, Red Hat is supposed to offer an alternative play at the enterprise connectivity and IT markets.

What is worth noting is that AWS, Microsoft and Google, as well as other cloud competitors, have made moves into the enterprise edge market as well. With the emergence of 5G, the cloud industry could well be ready to move into the next phase of development, but the question is where does IBM fit in?

IBM has dipped its fingers in numerous pies, but Red Hat is a definitive move ahead of a new surge in the cloud market. Companies don’t spend $34 billion on organisations which are going to supplement offerings, this is another material shift in the IBM operations as it continues to search for its place in the digital ecosystem.

Microsoft gets a bump-up in numbers thanks to COVID-19

The coronavirus outbreak is causing chaos in the financial markets, but with every crisis there are those who will benefit financially; Microsoft appears to be one.

The Redmond-based internet giant has reported its latest quarterly results, and it appears the lockdown is becoming a catalyst for profits. Total revenues increased 15% over the three-month period ending March 31, operating income was up 25% to $13 billion and net income jumped 22% to $10.8 billion.

With share price growing 4.5% in the final hours of trading, and a further 2.6% during the pre-market hours, Microsoft’s market capitalisation is more than $1.35 trillion, making it the most valuable corporation worldwide.

“We’ve seen two years’ worth of digital transformation in two months,” said Microsoft CEO Satya Nadella.

“From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security – we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything.”

The coronavirus pandemic has forced families behind closed doors and employees to work from home. With lockdowns still in place in many of the worlds developed markets, new norms are bedding in and Microsoft is certainly one of those companies who will benefit.

Breakdown of Microsoft financial performance by business unit
Business unit Revenues Year-on-year
Productivity and Business Processes $11.7 billion 15%
Intelligent Cloud $12.3 billion 27%
More Personal Computing $11 billion 3%

Source: Microsoft Investor Relations

With more people working remotely, more businesses are being forced through a digital transformation process, and much more aggressively than most would have liked. To enable efficient work process, more cloud resources will have to be consumed by enterprise customers, though it is likely additional products will also be taken on in areas such as security.

For a company which has pivoted over the course of the last decade to position cloud front and centre of the business, current trends are incredibly beneficial.

For Microsoft, the revenues for the Azure cloud computing products surged 59% over the three months, while Teams now has more than 75 million daily active users, tripling over the last two months. 20 organizations with more than 100,000 employees are now using Teams, with new features being introduced each week. Live events for up to 100,000 attendees can now be streamed across the platform. Office 365 now has 258 million paid seats, while usage of Windows virtual desktop tripled this quarter.

But it is not just the enterprise-focused business units who are profiting.

Microsoft 365 Personal and Family now has more than 39 million subscribers, while Teams has been opened to consumer users for the first time. Windows 10 now has more than 1 billion monthly active devices, up 30% year-over-year, and Xbox has seen a boost also.

With children not being allowed to play outside in the garden and adults not allowed to play inside pubs, an obvious beneficiary was going to be the online entertainment segment. Netflix has already demonstrated financial gain with 27% uplift in revenues and a 22% boost in subscribers during its own earnings call, and Xbox has seen a similar lift.

Xbox Live currently has 19 million active users, while the Xbox Game Pass has more than 10 million subscribers. Although the team did not offer specifics when it came to the cloud gaming venture, Nadella said Project xCloud has “hundreds of thousands of users” in the beta stages in seven markets, with eight more launching over the next few weeks.

One question which does remain is whether this boost in revenues will be sustained?

“In our consumer business, we expect continued demand across Windows OEM, Surface and Gaming from the shift to remote work, play and learn from home,” said Microsoft CFO Amy Hood. “Our outlook assumes this benefit remains through much of Q4, though growth rates may be impacted as stay-at-home guidelines ease.

“In our commercial business, our strong position in durable growth markets means we expect consistent execution on a large annuity base, with continued usage and consumption growth across our cloud offerings.”

The risk of this benefit is that everything returns to the pre-COVID-19 way of life. Offices gradually become re-populated and the lessons from remote working are forgotten by traditional organisations. This would mean the bump in revenues would not be sustained by the cloud companies.

Although we suspect some traditional organisations might return to pre-COVID-19 working practises, many will adopt at least a portion of the newly transformed way of life. The extremity of the current bounty for the cloud companies will not be sustained, but there should be a shift in mentality over the long-term.

We tend to agree with the cloud companies that this enforced digital transformation programme will bed-in, though perhaps not as enthusiastically as the cloud companies believe. These are salespeople let’s not forget, selling the potential of Microsoft to investors. There will be sustained benefits, but some in society will be intolerant of evolution, so will returns to the ways of old.

Consensus on 6G is gradually forming

Participants at the virtual 6G Wireless Summit shared their thinking on what 6G can do and what research is needed to get the underlying technologies in place.

The 6G Wireless Summit 2020 would have kicked off in Finnish Lapland this morning. Instead, the organisers have moved it online. Except for the lack of face-to-face conversations, the virtual event is a competent substitute. This may not be the first time that speakers needed to record their presentations, considering companies had been already pulling out other events over the recent weeks. By the time the Summit was scheduled to start, most of the keynote speeches and presentations at the technical streams had been made available online.

A year ago, when Team Finland introduced its 6G Flagship programme (then called 6Genesis) at Mobile World Congress 2019, what 6G was about was almost a blank slate. Twelve months and 800 peer-reviewed papers later, the direction of 6G is much clearer and the vision is increasingly shared by industry experts and their academic partners.

Having watched six of the seven keynotes (Huawei’s speech has yet to be made available by the time of writing), we can see a clear convergence between the speakers’ views on both what 6G is expected to do and where research investment should be made to make those expectations come true.

Even their 6G vision taglines could look rather similar. For example, Harish Viswanathan, Head of Radio Systems Research Group at Nokia Bell Labs, believed 6G will “unify the experience across physical, digital and biological worlds”, while Dr. Fang Min, Director of 6G Research & Collaboration in the ZTE’s Wireless Division, saw 6G “integrating the physical and digital world”.

The leading use cases expected for 6G are shared by most speakers. For instance, they all foresaw vastly increased interaction between human and intelligent machine. Both ZTE’s Dr. Fang and Ericsson’s Dr. Mikael Prytz, Head of Research Area Networks, called it “Internet of Senses”. This includes both enhanced brain-computer interaction, and, in the words of Nokia Bell Lab’s Viswanathan, in-body monitoring.

Another key use case referred to by the speakers is what Ericsson’s Prytz called Connected Intelligence, or what ZTE’s Fang called Internet of AI, meaning AI interacting with each other, intelligent machines serving other intelligent machines. Such a scenario will have strong implications on network designs which are now limited by human senses.

With 6G poised to operate on much higher frequency than 5G (for example the FCC granted >95GHz for experimental use), the shorter wavelengths will allow for higher localisation accuracy, possibly down to centimetre level positioning. One outcome of such precision will be full digital representations of the physical world, or “digital twins”, by also fusing data from other sources including network data. Network operators will also be able to generate interconnected and collaborative digital twins, and digital representation of larger objects and their environment. Nokia Bell Lab demonstrated a digital twin of a New Jersey street with drone-captured high-resolution data for wireless network optimisation, for example accurate signal propagation prediction.

These use cases need to be supported by new, advanced underlying technologies that will provide guidelines for research in the discipline in the coming years. New spectrum technologies are highlighted by all speakers as such a domain. This includes both radio technology on the so-called D-Band (140-180GHz) and above, and progress in material sciences. Bell Lab’s Viswanathan pointed out that transceiver design for such radio frequencies will be more sophisticated, and may need to use glass interposers instead of silicon. ZTE also sees “Beyond Silicon” as one of the leading 6G challenge.

Network architecture is another key technology requirement that needs to advance in the run-up to 6G. One such advancement is what Nokia Bell Lab’s Viswanathan sees in the trend of RAN-Core convergence. This is primarily driven by the need to move the core closer to RAN for low latency service as well as to make the RAN more centralised towards the cloud. A related trend highlighted by Viswanathan is the demand for hyper specialised slicing. He believes that network slicing should move from resource reservation in 5G to providing separate software stacks and functions by using different micro-services.

Both ZTE’s Fang and InterDigital’s Alain Abdel-Majid Mourad, Director Engineering R&D, stressed the importance and demand for innovation to meet 6G’s new KPIs. Network security in 6G is also highlighted. While Nokia Bell Lab’s Viswanathan saw in 6G a “sixth sense”, for example using real-time analytics of sensor data by AI, Ericsson’s Prytz believed that the holistic solution of hardware-based security, trusted computing, and secured enclave will form the base of the future computing networks.

When it comes to the timing, the speakers had a consensus that it would be around 2030 when 6G will start commercialisation. ZTE believed 3GPP will start more concrete 6G specification work in R22, which the company expects to see in 2029. See the chart below for ZTE’s detailed prediction for the timeline from 5G to Beyond 5G (B5G) and 6G.

In general, the speakers at the Summit look to have much more in common with their views on what they expect 6G to look like than a year ago, as well as sharing an understanding on what key research areas will be in the years to come. While there is no guarantee these predictions will turn out to be correct, Nokia Bell Lab’s Viswanathan put it best when he said, “We have 10 years to be proved wrong, and now can have fun predicting the future.”

Source: 6G Wireless Summit 2020, ZTE Keynote

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.

Cisco and Microsoft partner on cloud IoT stuff

US tech giants Cisco and Microsoft are combining their cloud IoT offerings, with a focus on the industrial sector.

The move was announced in a Microsoft blog, which somehow resisted the urge to use the term ‘end-to-end’ a lot. The thinking is that Microsoft’s Azure IoT platform is great at the datacenter end of things and Cisco is pretty hot at the edge. Industries increasingly want a bit of both from their IoT so this partnership has been created to provide that.

Using software-based intelligence pre-loaded onto Cisco IoT network devices, telemetry data pipelines from industry-standard protocols like OPC-Unified Architecture (OPC-UA) and Modbus can be easily established using a friendly UI directly into Azure IoT Hub,” explains the blog,

“Additional telemetry processing is also supported by Cisco through local scripts developed in Microsoft Visual Studio, where filtered data can also be uploaded directly into Azure IoT Hub. This collaboration provides customers with a fully integrated solution that will give access to powerful design tools, global connectivity, advance analytics, and cognitive services for analyzing IoT data.”

“This partnership between Cisco and Azure IoT will significantly simplify customer deployments,” said Vikas Butaney, Cisco IoT VP of Product Management. “Customers can now securely connect their assets, and simply ingest and send IoT data to the cloud. Our IoT Gateways will now be pre-integrated to take advantage of the latest in cloud technology from Azure.”

Microsoft might want to keep a close eye on this partnership as Cisco’s recent track record on such things isn’t great. A few years ago a partnership with Ericsson was announced to much fanfare, but after producing approximately nothing it has been allowed to wither on the vine and is presumably still a source of private embarrassment to both. Having said that, expect to see a lot more IoT partnerships as the clamour for end-to-end solutions intensifies.

Four operators take the lead on GSMA edge initiative

Last week, the GSMA announced an initiative to standardise the edge, with Telefónica, KT, China Unicom and Telstra the first to step up to lead the way.

In signing a Memorandum of Understanding (MoU), the four telcos the aim will be to test Edge Computing functionality and interconnection capability, as well as verifying the ease and simplicity of a MEC platform for application developers to leverage.

“Together with these Tier 1 operators, we are making available to the industry the means to build and deliver a global telco-based Edge Cloud service, providing the necessary mechanisms that complement current MEC standards to enable the federation of operator’s edge computing platforms,” said Juan Carlos García, SVP Technology and Ecosystem at Telefónica.

“With this, telcos will be able to deliver a universal Edge Computing service that will facilitate application developers and Enterprises the deployment of their services globally through a simple and single interface.”

The aim of the GSMA initiative is to standardise platforms for edge computing, ultimately driving towards interoperability in the telco community. Although standards might not be the most exciting part of the industry, they are critical to ensure smooth progress and also realising the telco rank in the pecking order.

The collaboration will take place over four phases:

  • Phase One: development of basic Edge Computing capabilities such as interconnection of MEC platforms, smart edge discovery and smart resource allocation
  • Phase Two: enabling mobility features
  • Phase Three: service availability to roamers, to enable the use of edge when customers moves from their home network and visit a different network
  • Phase Four: federation capabilities

Ultimately the aim is to create global consistency, a telco platform without the need to develop custom integrations for each and every market. Such interoperability and consistency is critical to ensure the effective development of a sustainable edge ecosystem. It also provides confidence to customers to deploy applications in any data centre, with policies designed for privacy, security and enhanced performance.

“Through our partnership with Telefonica, Telstra and China Unicom, all from different regions across the world, we set out to explore the most effective way to build a globally federated edge platform and tap into the full potential of telco-based Edge Computing,” said Jongsik Lee, SVP & Head of Infra R&D at KT.

“Leveraging MEC standards and key technologies, we aim to provide a reference model the industry can build on and developers and enterprises can take advantage of.”