How BT, M1 & Verizon are approaching cloud native IT operations

M1 and Verizon are two of the most aggressive telco adopters of public cloud, while BT is a cloud-native enthusiast that continues to evaluate the benefits of public cloud.

M1, which used a greenfield strategy, is now 90% cloud-native. The company has outsourced all its legacy software to its systems integration partner, Infosys.

Verizon embraced a hybrid cloud strategy, and was able to retire nearly a quarter of workloads.

BT decided to build a componentized platform first and then address customer experience, and more specifically digital experience, as a second priority.

While M1 and Verizon are two of the most aggressive adopters of public cloud technology, BT is a cloud-native enthusiast that continues to evaluate the benefits of public cloud. Mark Newman explores their different approaches in this excerpt from his recent report ‘Lessons learned on the journey to cloud native'.

M1 goes all in on public cloud

Nathan Bell, Chief Digital Officer of Singaporean telecoms operator M1, is the most passionate public cloud evangelist we spoke to as part of our research. “I am an avid supporter of the cloud and of its ability to deliver in terms of volumes and types of applications,” he says. M1’s journey to the public cloud began in 2019 after a companywide assessment that identified 100 initiatives necessary to take the business to the next level in terms of costs, revenue generation and diversification.

The overall goal of the transformation project was the ability to offer instant, hyper-personalized, made-to-measure services for customers. To drive this vision M1 decided to become a cloud-enabled digital services provider. For the company’s IT teams this required a different way of thinking about architecture, culture and spending.

“In the past everything was looked at in terms of incremental cost,” Bell explains. “This is fine for a single $200k project, but when it is repeated 30, 40 or 50 times, it becomes clear that this is not cost effective. The business starts to ask itself the question: ‘Why is my support cost going up so much?’ There was a realization that something needed to be done.”

The transformation of the consumer mobile business (the largest proportion of M1’s revenues are from consumer mobile) got underway in early 2019. The transformation involved shifting almost everything except physical network assets into the cloud. Prior to the shift, around 10% to 15% of M1’s business processes were in the cloud.

Now, the company is 90% cloud native. M1 opted for a greenfield strategy in going cloud native, building a brand-new “house” next to the existing one. The company has outsourced all its legacy software to its systems integration partner, Infosys. This allowed M1 to focus on building its new digital platform in the cloud, from the apps down to rating, charging and the network-as-a-service layer.

Bell says there are 25 components all built into the cloud. Putting the right approach in place for procurement and ownership of the technology roadmap was essential for successful transformation, according to Bell.

“We need to own this – it can’t be pushed on us by a technology partner,” he said in early 2020. As such, M1 leveraged the TM Forum Open Digital Architecture so that it could make its vendor partners accountable and simplify the systems integration process.

No vendor was allowed to bid for more than 50% of the total value of the contract. The transformation of the consumer business was completed in early 2021, allowing M1 to launch a new brand, new services and new ways of interacting with its customers. This includes enabling customers to manage their products and services online holistically and in real time, rather than waiting days for services to be provisioned.

“The sort of hyper-personalization we built on our website means we can technically have six million combinations of plans that can be built with the slide of a finger,” says M1 CEO Manjot Singh Mann. “Technically we can have a plan for each Singaporean. And we haven’t even yet started on other services we plan to build onto this platform to give a far more holistic experience to customers going forward.”

Verizon adopts hybrid strategy

US telecoms giant Verizon embarked on a five-year IT ecosystem transformation project in 2017 with three main goals: driving efficiencies and CapEx gains, accelerating time to market and driving innovation.

The key to the success, according to Verizon Global CIO Shankar Arumugavelu and Chief Cloud Architect Nanda Kumar, was taking a holistic view of the potential benefits of transformation. It was not only about cloud migration and reducing the number of on-premises solutions; the project also required an assessment of Verizon’s operating model, software stack, and the time and resources spent managing the company’s data center operations.

As a result of the migration, Verizon embraced a hybrid cloud strategy, and was able to retire nearly a quarter of workloads. The company was able to migrate a significant number of applications to the public cloud, while maintaining the rest on premise.

When it came to deciding which applications and workloads could move to the cloud, the first assessment was whether they would benefit from the elasticity provided by the public cloud. For example, applications that support short bursts in traffic and demand, such as the launch of a new mobile phone model or online shopping on Black Friday, were obvious candidates.

Cost considerations were not just based on hardware. “When you look at the total cost of an application, the software license weighs into the equation as heavily, if not more so, as the cost of buying and maintaining the hardware,” says Arumugavelu.

In deciding which applications to move to the public cloud, Verizon broke its entire IT landscape into categories:

• Systems of engagement (for customers and front-line employees)
• Systems of record (customer profile)
• Systems of insights (analytics)

Systems of engagement represented the “low hanging fruit” in terms of public cloud migration, while a more selective approach was required across systems of record and systems of insight.

Verizon has a public cloud-first strategy with exceptions, specifically applications that require low latency (mainly the network), security systems and applications that support government data. Verizon also retains some applications on mainframes.

BT’s journey to cloud native

BT’s most recent cloud journey started in 2016, says Group Chief Architect Neil McRae. “Knowing what I knew about where we were going with 5G and future networks, what was clear to me was that we needed to radically rethink our variety of platforms,” he says.

“The IT that we had was shaped to our organizational boundaries. We had a consumer business stack, a wholesale stack, an Openreach stack, a BT Global stack. In effect, we had 50-plus stacks and hundreds of applications and it was really difficult to get anything done. And not only that, we were facing the pressure of maintaining the complexity of those stacks, in a world where compliance and security and all sorts of nonfunctional things were driving costs to an insane level.”

Simplifying the stacks was central to this transformation process. “Why do we need five or six big stacks for each business unit, when each business unit is launching more or less the same thing?” asks McRae.

When McRae went to the business with his vision for a new approach to IT he made the case for a radical change. He presented the idea of a three-layer platform with core infrastructure as the bottom layer, network-as-a-service sitting above it, and on the top layer new use cases such as telecoms in healthcare or taking telecoms into drones.

“This top layer was really more about what we could offer as a solution,” says McRae. The vision that McRae had for the business was to migrate to a more “webscale” type of IT based on the idea of metadata, and with data all ideally in one place but at the very least in fewer places. This involved migrating to a workflow-based platform using microservices and “with a much bigger focus on capabilities and reusable capabilities”, McRae adds.

In terms of prioritization, BT took the decision to build this componentized platform first and then to address customers’ experience, and more specifically their digital experience, as a second priority. In this first phase, one of the company’s biggest challenges was identifying vendors that could provide them with the individual components, particularly in the areas of catalog and inventory.

BT also decided, around this time, to invest in its own platform based on a microservices architecture. Rather than starting with easy wins, BT’s approach has been to start with those parts of the business that were causing it most pain.

The biggest single issue that BT had, according to McRae, was “sales agility” – being able to go from having a product it wants to sell to making it available and then constantly updating it in terms of, for example, pricing and bundling.

Throughout the whole transformation process, BT has sought to align the IT function with the interests of the lines of business. While the IT function was prepared to make provision for the differing requirements of the various lines of business, in practice there was very little difference between them, says McRae.

When it comes to cloud migration, McRae makes a distinction between those parts of the business where BT is seeking to differentiate itself and those where it is not. “We see a definite opportunity for putting more of our BSS in the cloud, or SaaS [software as a service],” he says.

The network, on the other hand, is a differentiator. BT has consistently said that its strategy is to have the best network. “So from that perspective, we want a lot more control and visibility of the network,” says McRae.

In terms of the benefits of public cloud migration, McRae is skeptical of the claims that are being made about cost savings. “We had all these systems integration companies come to us and say you could save millions if you move to the cloud, but we measured it…[and] we just couldn’t see it.”

Rather than lifting and shifting applications into the cloud, BT’s approach has been to build “cloud-style apps” that are optimized for the cloud. One area where BT is currently evaluating its options relates to the storage of data. BT wants to move all its data to a single location, but is not sure whether this should be on-premise or in the cloud. One of its concerns about putting it into the cloud is whether, at a future date, it wants to move it back out or into another cloud, or clouds. “Building stuff in the cloud is really easy, but extracting it once you build in the cloud is hard,” says McRae.

Read the report ‘Lessons learned on the journey to cloud native’.