Questions remain about which network or support system components should move to the cloud, but it's clear that a relevant strategy is critical for communications service providers (CSPs). Public cloud in particular plays a key role in helping them significantly reduce costs and efficiently store and use data. Cloud also reduces latency for media & entertainment and other industry vertical applications, and it powers edge computing services.

It is safe to assume that all eyes will be on AT&T to see how its “public cloud first” strategy, announced in July 2019, is taking shape and how many other CSPs are following its lead – or not. Public cloud environments such as Amazon Web Services, Google Cloud and Microsoft Azure aren’t the only solution for operators. Many CSPs also are implementing or evaluating strategies using private and hybrid cloud (a mix of public and private).

This is an excerpt from our report Key Themes for 2020 which explores in-depth what CSPs and their suppliers are doing to keep advancing toward an unknown digital future. Download the report now for the full insight.

Cloud’s evolution

Until recently, public cloud environments contained too many unknowns for CSPs regarding security, performance, true cost of operation, interoperability, and control of customer data and network connectivity. Operators are growing more comfortable with public cloud environments, but they still have concerns about how to integrate cloud operations with traditional telco processes, practices and standards. Much work remains to join the two models.

To date, CSPs have leveraged cloud for storage and some nonessential productivity applications. They have been reticent to move their key operational and business support systems (OSS/BSS) to the public cloud either in a “liftandshift” mode, which does little to enhance the solution, or in a cloud-native mode, which increases agility significantly.

Our recent research finds that less than 5% percent of operations software is deployed in the public cloud (see below) – at a time when investment in new support solutions should be on the rise in preparation for 5G. If CSPs are hesitant to put their own workloads into a public cloud environment, potential enterprise customers are justified in asking why they should have confidence in the cloud services CSPs will be trying to sell them.

The barriers

BSS migration to the cloud is faring better than OSS, but even so CSPs have been slow to embrace it fully. In 2017, 44% of the CSPs we surveyed believed they would have more than half of their BSS in the cloud by this year, but they haven’t come close.

AT&T’s blockbuster $2 billion, multiyear deal to move all non-network workloads to the Microsoft Azure public cloud should mark a major turning point for CSPs’ use of public cloud. However, AT&T and Microsoft as well as other CSPs and hyperscale cloud providers will have to collaborate to overcome some significant barriers, such as:

Physical security – preventing unauthorized access to servers and systems has been a difficult challenge for cloud providers, but they are taking steps to improve physical security. Google, for example, has adopted stringent identity and access management restrictions.

Investment costs – the cost of changing providers and moving data that has been stored with one cloud provider to another, sometimes called egress, can be significant, as can transactional costs associated with continually accessing data and managing analytics.

Lack of control – similar to physical security concerns, CSPs are not comfortable giving up operational control during times of outage, performance degradation, feature rollout, etc.

Unreliability – although it is an outdated figure, 99.1% availability it is still often cited as the norm for cloud-based systems, which is a far cry from the ‘five nines’ reliability CSPs are used to.

GDPR & data security – when it comes to customers’ privacy and data security, CSPs have a good reputation to protect. They also are heavily regulated and do not feel comfortable trusting data stored in the cloud. This is especially true in countries with strict data residency rules such as the EU’s General Data Protection Regulation.

The benefits

If CSPs can overcome the barriers, they stand to realize significant benefits, including:

Automation – with 5G deployment underway, automation is the top attribute CSPs are looking for in nextgeneration support solutions.

Scalability – the ability to scale applications economically on demand is critical and lies at the heart of CSPs’ efforts to automate operations and optimize networks for realtime response and reporting.

Total cost of ownership – Rakuten CTO Tareq Amin claims that operating a cloud environment costs 45% less than running a traditional network. Time will tell if this is true, but the assumption is that moving applications there lowers operating expenses. The amount of savings likely will depend on the level of managed services provided and the complexity and size of the network.

Time to market – despite years of process automation and improvement, CSPs still are unable to create services as quickly as internet-based companies, but they believe cloud will help level the playing field by speeding service design and testing.

Predictive maintenance – CSPs believe cloud deployments, particularly managed services, could allow them to perform maintenance tasks without taking components out of service.

Expertise – by partnering, CSPs get access to cloud talent they don’t have internally.