In contrast to Dish, whose partnership with AWS I covered in my last column, Nokia has chosen to spread its bet and partner with all three of the top public cloud titans. Announcing the partnerships back in March, Nokia reveals an approach whereby some aspects of the engagements are similar and others are unique to one partner. (See Nokia announces cloud partnerships with Google, Amazon, Microsoft and A better mousetrap, or just a trap? Questions about Dish and AWS using the public cloud for 5G.)
Everyone is focused on the 5G opportunity and all three could providers offer robust edge platforms, but as I'll discuss below, each also brings something unique. Few companies are in a position to engage at this level, but examining Nokia's strategy may help other companies trying to find their way in a dynamic competitive environment. The vendors, the providers, the technologies, the customers, the services – all are changing at the same time and try as we might, no one can predict who will be left standing and where or when the music stops.
Here's my take on Nokia's strategy and an informed guess as to why they're doing what they're doing.
Leverage what each cloud provider does best. I won't claim to have done a detailed architectural comparison between AWS, Google and Microsoft, but here's how I tend to view them:
- AWS: Dominant market share, solid relationships with the development community.
- Google: Cutting edge technology, aggressive.
- Microsoft: Traditional strength with enterprises, building comprehensive telecom portfolio.
These characteristics seem relevant when we look at some of the talking points at the top of each release:
- AWS will be used "to extend the reach of Cloud RAN and Open RAN technology."
- "Google's edge computing platform" will combine with Nokia's RAN, Open RAN and Cloud RAN solutions.
- Microsoft will be used to develop "cloud solutions for the enterprise."
Maintain relevance with enterprise customers. I see two aspects to this. Nokia may be trying to placate its enterprise customers by giving them the choice of the cloud provider and associated ecosystem. Like Nokia, its enterprise customers recognize that each cloud provider has unique selling propositions and won't want to be forced to use one over another. Nokia may also be trying to head off cloud providers taking over the relationship with enterprises. While the cloud providers are adamant that they aren't trying to be network operators (as an example, see Microsoft's reasoning here), the same can't be said about delivering applications to enterprises. Once network functionality is available in the cloud, what's to keep the cloud providers from bundling it with other services and applications and selling directly to the enterprise?
Establish position as cloud hardware supplier. Disaggregating the software from the hardware has transformed the infrastructure market from a vertical one to a horizontal one. Nokia wants to ensure it does not get pushed aside by generic high-volume, IT servers at the network edge. The releases show each cloud provider engaging with Nokia's AirFrame Open Edge server in different ways: Microsoft will "explore further opportunities to incorporate" it "as part of its telco edge strategy;" Nokia will "certify" it "with Anthos (Google's edge application platform); and "Nokia will run AWS EKS Anywhere" on it.
I was critical of Dish for putting all of its eggs in AWS's basket, so it would be hypocritical of me to be critical of Nokia for doing the opposite. Still, Nokia's approach isn't without risk. Nokia has to devote teams to support each partner – is that sustainable in the long term? Will they/should they ultimately go with only one? I don't foresee any reason why cloud architectures would harmonize – at least not in the near term, which I think means Nokia will have to maintain variants for each (I'm happy to be proven wrong if I've assumed incorrectly). Five years ago I would have wondered about how CSPs would react to Nokia supplying cloud providers who could offer competitive services. Today, it seems more that some CSPs will be happy to let the cloud providers pay for the infrastructure – the reverse of what happened in the early days of mobile data when internet players rode on the infrastructure purchased by the CSPs.
One should also consider what's in it for the cloud providers? With Huawei still on the outside looking in, options are pretty limited, so it's almost a no-brainer to throw their lot in with Nokia. They, too, have non-exclusive deals on both ends – with CSPs and vendors. They want to make their clouds and platforms as attractive as possible to the largest number of potential clients – CSPs and enterprises – as possible, so the more boxes they can tick and the more options they can offer, the better. And has been mentioned often, once a client deploys on one cloud, it is likely to stay there because of the exorbitant financial and operational switching costs.
I estimate we're only in the bottom of the second inning or so. We'll see which partnerships, if any, knock it out of the park.
— Roz Roseboro is a former Heavy Reading analyst who covered the telecom market for nearly 20 years. She's currently a Graduate Teaching Assistant at Northern Michigan University.