Telco cloudification poses a huge systemic risk

Telcos these days supposedly detest single-vendor deals. It's hardly a surprise – if something happens to that vendor, the network could fail. Trapped in the bear hug of a big supplier, an operator can be squeezed on payments and as shabbily treated as a Ryanair passenger with no escape. All this is a problem because many telcos – besides grumbling about "lock-in" and poor vendor diversity – also want to virtualize or cloudify their networks. And one reason for that is to have a single platform for managing all workloads.

The industry is very far from this today. Another complaint made by the likes of Laurent Leboucher, the group chief technology officer for Orange, is that networks are littered with silos and management systems. Take Nokia, for instance. The Finnish vendor has two cloud-management platforms, Nokia Container Services (NCS) and Nokia Cloudband Infrastructure Software (CBIS), designed largely to support its own applications. That is not what telcos are now demanding, as Nokia itself recognized back in June.

"For a long time, what our customers have been doing is essentially building vertical – albeit, yes, virtualized and cloud-native – but they've been building virtual instances or stacks for the different network functions," said Fran Heeran, Nokia's general manager of core networks, cloud and network services, during a call with reporters.

"We're seeing a change in that market now where customers increasingly want to build a horizontal solution, so a standard architecture, standard cloud infrastructure, for all applications coming from all suppliers into their network," he continued. "And that's not a market that Nokia was pursuing."

It is jacking in NCS and CBIS (clearly preferred to the more logical NCIS abbreviation to avoid a mix-up with the crime series about US naval investigators) and instead betting on Red Hat, an IBM subsidiary. Around 350 Nokia employees were transferred to Red Hat as part of the deal announced in June. Henceforth, Red Hat is Nokia's cloud platform of choice, and it goes much further than the core network that Heeran looks after. The radio access network (RAN) was identified as a big opportunity in June by Darrell Jordan-Smith, Red Hat's senior vice president of telecom, media, entertainment and edge. Today, Nokia announced a cloud RAN trial with Elisa, Finland's biggest telco, where Red Hat's platform is used.

Get off of my cloud

This does not mean Nokia can't or won't accommodate other platforms. AnyRAN, the strategy it announced at this year's Mobile World Congress, is all about showing its RAN software can sit anywhere. That includes other platforms typically associated with private clouds, such as VMware and Wind River, as well as the systems developed by the big public clouds. "The hyperscalers are merging into this space as well," Heeran previously noted.

The point is that an operator must go all-in with a single horizontal platform for this to add up. Talk of "hybrid clouds" or the "multicloud" is usually a nonsense. Retaining more than one negates the benefits of this cloudification and means an operator still has silos. And it does not bring redundancy because each platform looks after a separate domain.

A solution is to ensure applications and workloads can be easily and quickly ported to another platform. If it lives up to its name, anyRAN should allow this. But operators are clearly unhappy. Just last month, the NGMN, a club of operators, issued a manifesto calling for more cloud interoperability.

Extricating IT systems from a public cloud is widely recognized to be fiendish. For years, Snapchat, a one-time messaging favorite for tweenies, has complained about its dependence on AWS and Google Cloud for different things. "Any transition of the cloud services currently provided by either Google Cloud or AWS to the other platform or to another cloud provider would be difficult to implement and would cause us to incur significant time and expense," it said in its last annual filing with the US Securities and Exchange Commission. If there were disruption to either provider, Snapchat would be "seriously harmed," it concluded.

In the telecom sector, Vodafone Group CTO Scott Petty was making similar noises as recently as August. "The goal of multicloud easy interoperability still has some way to go," he said at a press conference. The engineering work required to move workloads between different environments is "significant," he went on to complain.

Pick your poison

What should a telco do? For Danielle Royston, who runs a developer of telco charging software Totogi, the benefits of a deal with a public cloud far outweigh the negatives of lock-in. And besides lacking the range of services offered by a public cloud, the private cloud alternatives do not guarantee more freedom, she told Light Reading at the recent Digital Transformation World event in Copenhagen.

"The container system is 20 choices and the orchestration system is another 20 – you are picking all these things and you have to manage each vendor and manage the roadmap," she said. "What if that business, if their trajectory slows down? This is lock-in to 1,000 tiny decisions that your technical team is making. Measure that against your hyperscaler that is growing like crazy and not going out of business. Pick your poison."

Another option is to build an in-house platform that acts as a kind of abstraction layer between clouds. Vodafone highlighted such an initiative, dubbed Telecom-as-a-Service (TaaS), in October 2021. But it is hiring thousands of software engineers to support its development ambitions. Relatively few big telcos will have the resources to do likewise. And Petty's complaints about portability came nearly two years after that initiative was first unveiled.

In Japan, NTT Docomo is considering a different RAN workaround that would involve its service management and orchestration (SMO) platform. Also developed internally, that is compatible with any RAN vendor's products, unlike most vendor platforms, said Sadayuki Abeta, the operator's global head of open RAN solutions. A vendor-agnostic SMO platform might alleviate concerns about the use of multiple clouds by improving the economic case.

As arcane as all this may sound, policymakers should be as worried as telcos. Big Tech firms headquartered in the US remain on the worldwide march in telecom and numerous other sectors. They have recently invaded the on-premises space occupied by the likes of Red Hat, VMware and Wind River, none of which looks well equipped to compete in artificial intelligence and other fields. A western world of cloud cores and RANs managed by a few giant firms sounds like a huge systemic risk.