I was scheduled to speak at MWC Barcelona this past February on an exceptional panel featuring Amazon Web Services (AWS), China Mobile, Corning, Digital Colony, my company MATRIXX Software, and moderated by McKinsey. The topic was “Must a 5G-Era Telco Own Physical Infrastructure?” with an enticing opportunity for discussion as more service providers than ever are exploring options to shed infrastructure costs and investment risks. New strategies are becoming viable, as unifying best practices emerge for harnessing virtual networks, cloud solutions evolve to become viable on premise, and ecosystem players step up to focus on critical components of the supply chain.
Tragically, MWC was canceled this year due to the risk of the coronavirus, which even now remains a global threat. However, the GSMA suggested an alternative forum and hosted our panel - despite the time differences - in a spirited online discussion that hotly debated the promises and pitfalls of virtual cloud versus physical assets. At the conclusion of the session, everyone agreed it was an outstanding discussion on an extremely timely subject. Just 24 hours later we discovered the video recording had been corrupted during transfer using a popular online cloud video conferencing software package.
The irony of this cannot possibly be lost upon the reader - unlike our data, apparently.
There are many different kinds of “telecom infrastructure,” so the discussion ranged quite widely from the topic of radio towers, to the 5G packet core, and to critical hardware on which a telco’s network and business applications must run.
The early part of the debate was reminiscent of the challenge: should railroad companies own the train tracks? The tracks are critical to the smooth transport of people and goods. And yet, passengers don’t notice the tracks when they work. They notice the timeliness of the trains, the cleanliness of the cars, the services such as food and beverage or sleeping cars. Freight companies care about the timeliness and cost-effectiveness of delivery services. No one thinks about the rails until something goes wrong.
Similarly, as 5G radio tower and network infrastructure is built out, there will be an expectation that services will work well and as advertised. Service differentiation will focus as always on speed and cost. Speed-to-market will also be important as telcos must react with new business plans and capabilities tailored to emerging needs, which are quite distinct from old telecommunications patterns, given the rise of wearables, AR/VR/MR, and an explosion of connected devices from the Internet of Things (IoT), alongside ubiquitous digital services and smartphones.
Two major initiatives have made “cloud” an attractive proposition for service providers as 5G emerges.
First, a significant advance is the widespread telco adoption of cloud-native technologies and best practices from the Linux Foundation. These concepts are critical for 5G and enable distributed systems to be managed elegantly through open source rather than proprietary methods, making it possible to implement network slices, multi-access edge computing, and coordinate elastic and resilient networks.
Second, the rise of AWS Outposts, Azure Stack and Google Anthos as hybrid cloud options enables workload on premise - such as in the telco data center - harnessing public cloud vendor tools and coordinating with centralized public cloud resources. This allows a third party to manage capital and operational considerations for on-site infrastructure. These options are game-changing for telcos.
At the heart of the debate is a central question: should telcos focus on infrastructure as a core resource or as a commodity - enabling them to focus on their business and not merely on costs?
The dangers of ignoring or trivializing the importance of infrastructure are obvious. No one wants to experience a service impact or lose their data. These needs are imperative to running a business.
Beyond this however, a business must focus on delighting its customers, not merely serving them. Is 5G the opportunity telcos have been waiting for to accomplish this tricky feat? And, can they do so by spending more of their time and capital on addressing their customers’ widely varying needs if there are options for reliable infrastructure?
5G may be our industry’s best opportunity to harness ecosystem partners that can provide essential service level agreement (SLA) guarantees, enabling a return to business fundamentals and a focus on services.
This is the hope for many with 5G: that telcos can rise above commodity status, focus on service innovation and differentiate through pricing models that evolve beyond capacity pricing. It requires flexible applications that can support dynamic scaling and yes, reliability. Well-designed solutions can, and must, support both of these for us to take the next steps with 5G. Some applications are better suited than others for reliability in the cloud. This is at the heart of what it means to be cloud native, supporting elasticity and resilience to varying degrees, tunable for on-demand service level agreements and supporting the most stringent service level agreements, even on virtualized cloud infrastructure.
That’s what you might have heard if our panel had been successfully recorded. I am grateful nevertheless for the opportunity to participate in such a spirited discussion. I wish everyone the best at this challenging time, and hope global recovery is near.
And if you haven’t done so lately, backup your data.
