Telcos opt for a hybrid, multicloud approach to BSS/OSS

Research for our recent report Digital Transformation Tracker 8: Cloud Adoption Accelerates reveals a rapid acceleration of cloud adoption by telecoms operators. It also shows communications service providers (CSPs) favoring a hybrid and multi-cloud strategy as they seek to maximize functionality and prevent vendor lock in.

A survey for the report, which drew 226 responses from 118 operators worldwide, illustrates how respondents are approaching cloud deployment for OSS/BSS, as well as network workloads. The chart below shows the percentage of respondents overall, with comparison data from 2021 for OSS/BSS.

This graphic shows 2024 data broken out by size of company:

Hybrid cloud is the winner for every size of company when it comes to approaches to OSS/ BSS, and for small and medium sized operators hybrid is also the top choice for network workloads.

But somewhat surprisingly, the results show hybrid and multicloud becoming slightly less important for OSS/ BSS from 2021 to now. Here, we believe the large number of respondents from small CSPs this year to our annual digital transformation tracker survey probably has affected the overall results.

Smaller operators have a nearly equal preference for private cloud, most likely because public cloud services are not available in many regions of the world, particularly in developing countries. But our additional research and conversations with CSP executives indicate that hybrid and multicloud approaches are both becoming more important.

Multicloud reality

India’s Jio is a good example of a company embracing both a hybrid and multicloud approach. Jio is a young company, but it is also a large operator serving nearly 500 million mobile subscribers. And it is “growing at a fierce pace”, according to Dr. Sudhir Mittal, EVP & Chief Architect, Jio Platforms.

“Hybrid and multicloud is the reality because for anything which is to be tried out – maybe for certain functionality or new concepts – the hyperscalers’ clouds are best for that,” Mittal says. “But anything which goes at scale, then for CSPs the private cloud becomes an economic option. That is the reality.”

He adds: “And with various hyperscalers having excelled in their own certain areas, it is important that for a particular functionality we utilize that hyperscaler’s feature or expertise. Then, it becomes an imperative to have multicloud and hybrid cloud.”

Multicloud is an important focus of TM Forum’s ODA Canvas. “When we say we want multicloud, of course the hyperscalers could ignore it and try to lock us in,” says Sigrid Braun, an Enterprise IT Architect at Deutsche Telekom who is participating in development of the Canvas. “And if it’s only one, single telco that says that, then it’s difficult. But when we all say, ‘This is how we want to do it and let’s work on it together to define how,’ then it becomes an opportunity for the hyperscalers.”

Vodafone’s multicloud strategy is deliberate. When the company began implementing a public cloud-first strategy for IT workloads (Vodafone’s network functions run in private clouds), most new applications were deployed in the Amazon Web Services (AWS) cloud, while the group’s in-house DevOps tooling and office IT were running on Microsoft Azure.

Then in 2019, Vodafone entered a partnership with Google to develop its big data analytics platform, Ocean, and a custom AI model. Today, that model is being extended with Microsoft. “The Vodafone AI platform, which we call AI Booster, is now actually a Google and Microsoft platform,” Lester Thomas, Head of Digital & IT New Technologies & Innovation, Vodafone, explains. “So, people can get access in a controlled way to all of the GenAI models: Google, Microsoft and open source.”

BSS then OSS

Our survey finds that the percentage of respondents whose companies have a public cloud-first approach for OSS/BSS is growing, especially among midsized and large operators. And although the numbers are still small, the percentage of respondents who say they’ve moved at least 50% of OSS/BSS workloads to the public cloud (17%) has more than doubled since 2021 when it was just 8% of respondents (see graphic above).

Most telcos move BSS applications to the cloud first, especially those focusing on customer engagement and care. This has been a big focus of digital transformation overall: giving customers a cloud-like experience with immediate access to personalized products and services and the ability to interact digitally.

Our survey data reinforces this trend, with the highest percentages of respondents reporting that they have already moved customer experience and relationship management workloads to the cloud.

The data is also consistent with the results of a previous survey on cloud BSS, which found that about half of respondents had already moved functions such as chatbots to the cloud. That survey was analyzed in the cloud economics report and another report focusing on BSS for B2B.

“It’s primarily BSS that’s driving a lot of public cloud deployment from what we’re seeing,” says Matt Anderson, Head of Telecom Solutions at Google Cloud. “But there are more and more discussions around what on the OSS side can CSPs throw into the mix without running afoul of regulatory requirements or data security standards internally.”

Often, the decisions about which workloads to move first come down to vendors’ adoption of cloud-native technology in their products and services. This can be an especially important driver for smaller telcos. Telia Sweden is a good example. Although it is part of the larger Telia Company, which serves 27 million subscribers in the Nordic and Baltic region, the operating company has just 8 million mobile subscribers and 1.25 million broadband subscribers.

“We are not really pushing a cloud-native shift per se, but we embrace it as it comes through our vendors’ product roadmaps – especially on the IT side,” says Ida La Spisa, CIO Telia Sweden.

Download Digital Transformation Tracker 8: Cloud Adoption Accelerates to find out more.