Very good article from Moor. The wireless carrier or MNO space is changing. And, with the Open Ran movement there is certainly indications of changes ahead! The big boys are taking hits!
There has been quite a lot of activity lately tied to the public cloud provider push into the telco space. Amazon Web Services launched its Wavelength initiative at the last re:Invent event in December to help operators “supercharge” 5G networks by placing compute and storage resources closer to the network edge. Google Cloud recently announced its telco strategy in March, which includes similar edge investments. Additionally, Google Cloud utilizes artificial intelligence and machine learning to improve analytics and insights into subscriber behavior. All of this activity by the public cloud providers is not surprising given the opportunity to capitalize on the multi-billion-dollar investments being made in enabling 5G services.
Over the last several weeks, Microsoft snapped up two companies in its attempt to add telco-grade depth to its Azure cloud platform. I will examine both announcements and provide insight into what I believe is compelling.
Microsoft announced its intention to acquire Affirmed Networks in March and the transaction closed shortly afterward in April. I believe the acquisition will give Microsoft depth in network functions virtualization, virtualized 5G core, edge and IoT support—with an emphasis on cloud scale that should complement the Azure service. This should strengthen Azure’s ability to support connectivity and service delivery across multiple domains, from the traditional enterprise datacenter, campus, and branch. Furthermore, it should enable Azure to extend even further to the core and edge of mobile cellular networks. COVID-19 has demonstrated the need to keep employees connected across the continuum of wired, Wi-Fi, 4G LTE and 5G topologies. This connectivity is crucial to ensuring business continuity while working from home. Affirmed was Microsoft’s first step to broaden its mobility support.
Second, last week Microsoft announced its intention to acquire Metaswitch Networks. On the surface, this additional purchase may seem redundant. Metaswitch supports the virtualization of communication functions, applications, services, and networking in general. However, Microsoft contends that Metaswitch brings complementary depth and, when combined with Affirmed, should enable a broader range of services for operators. I concur and also believe Microsoft will gain 5G brain power and acumen as a result of both acquisitions. It’s a smart move that I believe will make Azure worthy of operator consideration amongst the more traditional infrastructure telco cloud service offerings from Ericsson and Nokia. Bolstering Azure’s capabilities provides operators with more choice. Additionally, the entry of all three public cloud providers into the telco space should disrupt pricing and spur innovation.Most Popular In: Cloud
The architecture of 5G is inherently more capable of taking advantage of virtualization and cloud-scale than 4G. This should result in new monetization opportunities for operators in the form of network slicing. Network slicing guarantees quality, low latency-intensive services, and applications. Telco cloudification will enhance network scalability to support more users and devices. Additionally, it will enable operators to roll out new 5G services more quickly. Faster time to market is a competitive advantage in any business sector, and I expect Microsoft’s one-two acquisition punch will position Azure well in the telco space.
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Disclosure: My firm, Moor Insights & Strategy, like all research and analyst firms, provides or has provided research, analysis, advising, and/or consulting to many high-tech companies and consortia in the industry, including Amazon Web Services, Google, and Microsoft. I do not hold any equity positions with any companies or organizations cited in this column.