5G: The Next Battleground For Microsoft And Google
The 5G market has finally started to live up to its hype as carriers across the globe began to roll out services in select cities. 5G promises to deliver high-speed wireless connectivity with low latency. These network attributes enable better connectivity for consumer services, such as video streaming and high-performance gaming. The combination of high bandwidth, low latency and ability to support a larger number of connections means 5G networks also enable new business use cases, such as smart cities, smart supply chain and intelligent manufacturing . However, the 5G market is in its infancy with telecom operators struggling to scale infrastructure coverage after spending billions on wireless spectrum.
5G represents the next wave of multi-billion dollar infrastructure spend. Cloud computing providers, recognizing the opportunity have rushed into the market with offerings to aid service providers in their digital transformation and 5G efforts. (Note: There are many names for wireless service providers including telcos, communications service providers, wireless carriers, and operators.) In the past two months, we've seen both Google Cloud and Microsoft's Azure division make big announcements in the telecom space.
Microsoft strengthens its edge computing for 5G
Microsoft recently snapped up Affirmed Networks, deepening its edge computing strategy by layering in 5G products. The acquisition offers numerous benefits to Microsoft, including telecom industry knowledge, specialized telecom technology and a portfolio of customers. Affirmed Networks has over 100 deployments in over 76 countries with existing telecom clients such as AT&T, Orange, TELUS and Turkcell.
Affirmed Networks offers a virtual Evolved Packet Core (vEPC) and the newer service called the Affirmed UnityCloud 5g core (5gc). The UnityCloud 5G is a cloud-native solution that enables mobile operators to reduce 5G network operating costs by simplifying and automating network functions. UnityCloud converges 2G, 3G, 4G, 5G core networks, and wireline core, onto one unified platform to simplify the overall network architecture. The goal for Microsoft is to provide solutions tailored to the unique needs of operators, including managing their network workloads in the cloud.
For years the networking and data center market have been moving from on-premise hardware and special-purpose equipment to virtual hardware running on off-the-shelf commodity equipment. The 5G network will be no different in this regard.
In previous wireless infrastructure deployments, telecom operators had to purchase proprietary hardware that was costly and locked the operators into purchasing upgrades from a specific vendor. Today, there's an opportunity to shift this paradigm with virtualization software that allows operators to build networks with a mix of commodity hardware and custom solutions.
There's evidence that even the largest telecom equipment vendors will participate in this trend. For example, Ericsson, a well-established telecom vendor, announced it's collaborating with NVIDIA to build a virtualized 5G radio access networks (vRAN) using NVIDIA's GPUs and software. The radio access network (RAN) is a critical component of wireless network infrastructure that provides radio access and coordinates the management of resources across the radio sites.
It makes sense that Microsoft would purchase Affirmed Networks given the trend to modernize telecom's IT infrastructure and deliver new services. The acquisition gives telecom operators another reason to look to partner with Microsoft for their hybrid environments.
Google extends Anthos to support telecom
Telecom and 5G product announcements gradually filtered into the market despite the cancellation of the Mobile World Congress trade show. Google Cloud took the opportunity to announce a new product and strategy for supporting the telecom market. Google Cloud initially launched a service called Anthos for its enterprise customers in 2019.
Anthos is a hybrid and multi-cloud application platform that enables firms to modernize their existing applications, build new ones, and run them anywhere. It's built on open source technologies, including Kubernetes, Istio, and Knativ. The goal of Anthos is to enable consistency between on-premises and cloud environments and help securely accelerate application development.
In early March of 2020, Google Cloud announced Anthos for Telco. This version adds a set of capabilities that are catered specifically for the telco environment. Anthos for telco is part of the larger Google Cloud's Global Mobile Edge Cloud (GMEC) strategy, which will deliver a portfolio and marketplace of 5G solutions built jointly with telecommunications companies. GMEC aims to provide an open cloud platform for developing network-centric applications and a globally distributed edge for optimally deploying these solutions.
Google Cloud said it sees the opportunity to work with telecom companies as a cloud computing vendor, a technology collaborator, and a go-to-market partner. While telcos networks have specific requirements, in other ways, the group mirrors the concerns and issues of any large enterprise IT organization. For example, telecom providers desperately need to modernize their existing data center capabilities and build a consistent platform for service creation.
Anthos for telco provides a highly scalable and globally distributed version of Anthos that allows service providers to run workloads in any environment including the telco and customer edge. In addition to helping telecom providers modernized data centers, Google also wants to provide telecom operators, and their customers, a set of artificial intelligence-driven analytics services such as document processing image processing and vision recognition services.
As part of the strategy announcement, Google Cloud shared that it was collaborating with AT&T. Together they are developing 5G solutions for industries like retail, manufacturing, and transportation using AT&T's 5G network and Google Cloud's capabilities such as AI/ML, analytics, Kubernetes, and networking.
Will telco business bolster cloud computing sales in 2020?
While the enterprise cloud computing market continues to grow, it's becoming increasingly difficult for any cloud computing provider to gain primary supplier position. In recent months, cloud computing providers have turned their sights to the telecom industry because edge computing is a fast emerging market opportunity. Every enterprise needs an edge computing strategy to support processing data closer to where the information gets created. The question is who will provide that edge and what types of services will be part of it.
The timing is right for cloud computing providers to offer telecom-specific services as wireless carriers launch full-scale efforts to deploy 5G and offer data centers closer to the edge. It's unknown whether enterprise cloud computing spend will stagnate in the coming months. However, it's clear that telecom operators need to scale rapidly to make the most of the billions spent on 5G wireless spectrum licenses.
Microsoft and Google are both excellent choices for helping telecom providers build infrastructure. Both companies have substantial financial and employee resources to dedicate to telecom offerings. The wild card in all of this is Amazon's AWS. It also has a stake in the telecom game, but it will need to up the ante as Microsoft and Google enter the space in a meaningful way. Telecom operators will play the field and partner with more than one cloud provider. Expect cloud providers to seek out acquisitions to bolster edge computing offerings.