Based on preliminary stats, overall webscalers ended 2020 with just over $1.7 trillion (€1.44 trillion) in revenues, up from $1.45 trillion in 2019.
While the growth is due to several factors – including acquisitions, a
strong digital advertising market and increased cloud spending across
verticals during the pandemic – MTN comments, “Webscalers have been
attacking the telco vertical for several years. Since the close of 4Q20,
over the last three months the webscale sector's efforts to engage
telcos have picked up steam.
“A number of telcos have recently
announced new deals with webscalers in the areas of edge computing,
service development, digital transformation, and workload shift.
“At
the same time, more traditional suppliers to telcos (such as Nokia)
have expanded their own collaboration with the cloud providers who
dominate the webscale market.
“These deals aim to differentiate
[between] traditional telco vendors, prevent webscalers growing too fast
in the market, and save costs for telcos.”
Key developments in Q1
Telefonica engaged IBM to act as a systems integrator for an open RAN trial in Argentina.
TIM
Brasil announced it migrate all its on-premises workloads to the cloud,
using Oracle Cloud Infrastructure (OCI) and Microsoft Azure, including
mission-critical applications. The idea is to optimise and simplify the
management of its IT infrastructure while improving scalability and
agility.
In March, Liberty Global's Belgium unit, Telenet chose Ericsson, Nokia and Google Cloud for 5G deployment.
Nokia in the clouds
Nokia was by far the most active of telco-focused vendors in 1Q21, announcing several collaborations with the webscale sector.
In
January, Nokia announced partnerships with Google Cloud Platform (GCP)
to develop cloud-native 5G core solutions. Nokia is supplying its voice
core, cloud packet core, network exposure function, data management, and
5G core, while GCP's Anthos for Telecom platform will be used t deploy
applications.
In March, Nokia expanded its work with GCP,
announcing it would also partner to develop cloud-based 5G radio
solutions. The collaboration leverages Nokia's RAN, Open RAN, Cloud vRAN
and edge cloud technologies with GCP's edge computing platform and
application ecosystem.
Initial efforts centre around Cloud RAN
and aim at integrating Nokia's 5G virtualized distributed unit and
virtualized centralized unit with Google's edge computing platform
running on Anthos. Nokia aims to certify its AirFrame Open Edge hardware
with Anthos.
At the same time as the March GCP announcement, Nokia announced deals with Microsoft and Amazon.
Playing the field
The Microsoft agreement is intended to develop "new market-ready 4G
and 5G private wireless use cases designed for enterprises", combing
Nokia's Cloud RAN, Open RAN, radio access controller, and multi-access
edge cloud technologies with the Azure Private Edge Zone.
With
Amazon Web Services, Nokia and AWS will conduct joint R&D into
enabling Nokia's RAN, Open RAN, Cloud RAN, and edge solutions to operate
"seamlessly" with AWS Outposts. The goal is to develop new
customer-focused 5G solutions.
Per Nokia, "operators will be
able to simplify the network virtualization and platform layers for the
Core and RAN network functions by leveraging the agility and scalability
of cloud." Ultimately Nokia will be able to leverage Amazon services
like EC2, EKS, Local Zones and others to help automate network functions
and deploy end customer applications.
Intel attacks
MTN points out that Intel, which has attacked the telco market aggressively over the last few quarters, signed a deal with GCP in February to develop "reference architectures and integrated solutions" for telcos to enable 5G and edge network solutions.
The collaboration involves three main aspects: virtualised RAN and
open RAN solution development; a network functions validation lab; and
service delivery to the edge.
Israeli telco vendor
Radcom announced the integration of its 5G assurance solution (ACE) with
Microsoft Azure. Radcom says that the integration of ACE with Azure
"enables operators to assure the quality of 5G services by leveraging AI
and machine learning-driven assurance and automation" ACE runs as a
cloud native function over the Azure Kubernetes Service.
MTN reckons that vendors’ collaborations with webscalers will continue throughout 2021, no doubt.
Mavenir's SVP for Business Development,
John Baker, addressed this trend indirectly in a January interview with SDx Central:
“I really do believe the hyperscalers are going to become the new
telecom providers going forward...Apart from the physical radio that
goes on a tower, everything we’re doing now follows the data center
model, and these guys know how to manage data centers, software, and
applications."
For webscale operators to support all these new
activities requires heavy investment in network infrastructure. The
figure below shows CapEx by type, on an annualized basis, for the total
webscale network operator market since 2016.
