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Telcos bank on multicloud and ‘commercial tension’

TM Forum’s latest research for the eighth edition of the Digital Transformation Tracker points to strong support among large operators for a multicloud approach that allows them to exploit what Vodafone Group CTO Scott Petty calls ‘commercial tension’.

Dawn BushausDawn Bushaus
02 Aug 2024
Telcos bank on multicloud and ‘commercial tension’

Telcos bank on multicloud and ‘commercial tension’

A survey for TM Forum’s latest Digital Transformation Tracker, DTT 8, shows that large communications service providers (CSPs) are demanding the ability to mix and match cloud services from multiple cloud platform providers. Indeed, nearly 40% of respondents from operators serving 100,000+ subscribers said they prefer to work with multiple cloud providers when deploying operational and business support system (OSS/BSS) and network workloads in the cloud. None said they prefer to work with just one hyperscaler.

DTT8

During a recent presentation at a Mobile Europe event, Vodafone’s Petty explained why a multicloud strategy that balances deployments across the Amazon Web Services (AWS), Google Cloud and Microsoft Azure cloud platforms is so important.

“It’s easy to assume all cloud costs are the same across the three hyperscalers. They’re not,” Petty said. “It’s true that retail prices or unitary costs are very similar, but the discounts that you can achieve in the way you optimize your usage dictates dramatically what you spend. And if you don’t have that commercial tension and ability to move between different hyperscalers, it’s very difficult for you to eke out the best commercial deal.”

He added: “We’ve found by being roughly one third across all three, we’ve got the right commercial tension – the right willingness from the hyperscalers to invest with us, but also to optimize our prices and our discounts.”

Vodafone came to this realization over time. Initially, the company envisioned working with a single cloud provider (Vodafone began its transition to cloud with AWS). But, according to Petty, it quickly became evident that a distributed approach would result in lower costs and better reliability through diversity.

He shared the slide shown in the screenshot below to illustrate the types of workloads Vodafone now has spread across AWS, Google and Microsoft. Petty noted that Vodafone also has deployments on Oracle Cloud Infrastructure (OCI), but the operator has encouraged Oracle to partner with the big three hyperscalers. Oracle has announced partnerships with Microsoft and Google.

Scott Petty cloud

Talent and FinOps are key

Vodafone’s multicloud approach is part of a three-pronged strategy that also includes hiring software engineers and insourcing technology. Indeed, talent is a critical aspect of making the multicloud strategy work, as is FinOps, which is short for financial operations. Vodafone trains engineers to work in multiple cloud environments so that it’s easier to move workloads between clouds, while use of FinOps practices makes engineers accountable for the cloud resources they consume.

Read this report to learn more about FinOps.

“This concept of FinOps in cloud is super important,” said Petty. “Originally, we thought that was a finance function. So, we’d get finance people to run the numbers on our contracts with our hyperscale partners, and we didn't really make a lot of progress. We then realized, actually, we needed to make the engineers responsible for that.”

Vodafone’s engineers needed to understand how many cloud resources they were consuming, and they needed to be incentivized to consume less, he explained, adding that once they did the company saw “a massive drop” in consumption.

Vodafone found further cloud savings recently as the result of a hackathon. The winning use case used GenAI to look for potential savings across all the company’s contracts and deployments with hyperscalers.

“They found more than 300K of savings because the environment was configured incorrectly,” Petty said.

An added benefit of using FinOps and training engineers to work in multiple cloud environments is that the approach is creating a better value proposition for employees, according to Petty.

“Our engineers are multi-skilled, and they want to stay with Vodafone rather than go and work for the hyperscaler themselves or someone that’s betting on one technology,” he said. “So, in the round, we think it’s a better strategy.”

Read the DTT 8 report to find out how TM Forum’s Open Digital Architecture (ODA)
supports multicloud strategies