A couple years back, you might have heard analysts proclaim 2020 as “Year of the Cloud.” Others said the same about 2021. Still others are saying it now about 2022. Regardless of how you award the title, you have to appreciate the underlying trend: cloud remains a pervasive, disruptive force, transforming practically all aspects of business IT. But one area cloud has not yet transformed, is telecommunications.
Now, that’s about to change. And I’m making a bold prediction: 2022 will officially be the year of the telco cloud. That is, in the next 12 months, service providers will operate more of their networks - and more of their business - in the cloud.
You might be surprised at this proclamation. Haven’t service providers been promoting telco cloud for a few years? Yes. But here’s something we’ve learned in our role helping the world’s largest operators test their equipment: Talk is great, but it’s when companies start actually testing new technology that interesting ideas are confirmed as production-ready. Based on our engagement with operators, vendors, and systems integrators, here are the five biggest telco cloud trends coming in 2022.
#1: Operators will fully embrace telco cloud
There’s a reason that service providers have been talking up telco cloud. Migrating network operations from a model focused on network appliances to one based on cloud-native software brings huge advantages. Cloudifying your network can improve agility, lower operating costs, accelerate time to market for new services, and more. And on a practical level, it’s no longer really optional. The 5G architecture is built upon the Telco Cloud. Enabling edge applications, network slicing, and IoT are contingent upon cloud- infrastructure. While service providers have been planning this evolution for years, 2022 is the year telco cloud architectures leaps to the forefront for networks moving ahead.
#2: Service providers will embrace partnerships with public cloud providers - with reservations
After years of struggling to advance their own Telco cloud initiatives, operators have reluctantly adopted the notion, “if you can’t beat ‘em, join ‘em.” In 2022, expect operators to lean into public cloud partnerships as a key part of their business - albeit while keeping these sometime partners/sometime competitors at a distance. Expect more operators to enter into prominent cloud partnerships, especially with the “Big Three” (Amazon Web Services, Microsoft Azure, and Google Cloud Platform), both to host operators’ own cloud-native network functions and bring new applications to customers. This trend will work the other way too as cloud providers inch towards delivering telecommunications capabilities of their own with services like AWS Outpost.
As the lines between cloud and service provider networks blur, the differences between the way service providers have traditionally operated, and the way cloud providers do, will become more glaring. Operators will face mounting pressure to shift from “telco time” to “cloud time”—to accelerate qualification of new software, new services rollout, troubleshooting problems, and everything else. Being able to understand and validate the behavior of increasingly complex and dynamic virtualized resources will become a core business requirement.
#3: Enterprise security services will move out of the data center and into the cloud
This transition began in 2019, when Gartner defined emerging secure access service edge (SASE) architecture that migrate cloud security functions into the cloud. That combination appeals to enterprises who’ve been struggling to serve an increasingly distributed workforce, and an increasingly cloud-based application stack, and connect to multiple cloud services. This problem got more urgent the last couple years, when massive unanticipated shifts to work-from-home redefined the traditional enterprise security perimeter for good.
With networking and security revamped by the cloud, you’d expect SASE to be tearing through the marketplace. But while 2021 was characterized by evaluations, pilots, and tire-kicking, 2022 will be the year SASE moves into production. Which means businesses will need new methodologies and tools to validate SASE-based Cloud Security Functions and the mix of business-critical services they support.
Just as SASE itself converges the worlds of networking and security, expect to see the broader industry follow suit. Look for SD-WAN providers to evolve into security vendors increasingly serving operators who are themselves becoming managed security service providers.
#4: The 5G-enabled cloud edge will unlock Industry 4.0
The marketplace has long anticipated 5G, where low-latency edge services, tremendous bandwidth, and unprecedented connectivity will take industrial automation and digitalization to new levels. Debut of new edge computing capabilities are the cornerstone of operator plans to monetize 5G investments and make inroads into more lucrative enterprise-facing services. In 2022, mobile edge computing and edge cloud services start moving out of the lab and into the manufacturing, government, agriculture, mining, healthcare to name a few vertical markets that will be disrupted by the cloud.
#5: Telco cloudification will permeate the enterprise premises
Telecom has long been a box economy where customer premises equipment (CPEs) specialized for different applications are required. Operators have long sought a more versatile model, which is essential for digital transformation. Universal CPE (uCPE) delivers a wider range of telco-enabled services to enterprises. In 2022, uCPEs finally start to be widely deployed, as virtualized network functions replace embedded appliance in the customer premises. Universal uCPEs will host SD-WAN services, security services, test probes, to greatly improve service agility while driving down Total Cost of Ownership (TCO). They will also be a platform for cloud partnerships offering new enterprise services.
To succeed, operators and their customers will need new tools to optimize availability and quality of experience that are hosted on uCPE and edge cloud resources. After all, conventional public cloud resources can seem practically infinite. But when you’re running business-critical cloud services from a resource-constrained uCPE on premises, you better understand how they’re behaving.
Welcome to the telco cloud
Which year is the real “Year of the Cloud?” By now, so many have stacked up, we might as well call it a decade. But if you’ve been waiting for service providers to jump into cloud transformation with both feet, the wait is over. This year, the industry finally goes from talking about telco cloud to actually delivering it.
