Can Anyone Catch AWS in the Telco Cloud Race?

Amazon Web Services (AWS) is an outlier in the telco cloud space. The cloud presents mobile network operators with a broad matrix of choices, and AWS is almost always in the mix.

It faces competition from the same companies it battles in cloud computing at large, most notably Microsoft and Google. The telco opportunity is broad. It spans internal IT operations like collaboration software suites for employees, emerging mobile edge computing services, and mission-critical network infrastructure with everything in between.

There is no consensus among analysts about the extent to which the global cloud leader is running away with the market, but there is broad agreement that AWS got into the market early and has a lot of wind in its sails.

“I think AWS is certainly in the driver’s seat at the moment of this market without question,” Nick McQuire, chief of enterprise research at CCS Insight, told SDxCentral in a phone interview.

AWS Takes ‘Holistic View of the Network’

AWS’s heritage in the cloud industry and the manner in which it’s attacking the market with what he described as a “holistic view of the network,” is helping it build upon early strengths and wins in the mobile edge computing space.

AWS Outposts, which landed in late 2019, was a “big game changer,” McQuire said. The fully managed service, which targets on-premises workloads and resources, reaches thousands of enterprises now, and has been adopted to varying extents by multiple global operators including Verizon, KDDI, SK Telecom, and Telefónica, among others.

AWS has also assembled a very strong telco community, a broadening ecosystem of global operators, independent software vendors (ISV), a deep bench of committed developers, and many third-party vendors in radio access network (RAN), network functions, and telco-centric services, McQuire said.

Neither Microsoft Azure or Google Cloud have assembled a suite of services and functionalities as robust, or all encompassing, as AWS thus far, he said.

Other industry analysts are less effusive in their praise of AWS, and not yet willing to call it the undisputed market leader. The telco cloud opportunity is still young and relatively unproven at grand scale, which means there’s plenty of room for strong competitors to emerge and battle for deals with network operators.

Analysts Expect Stronger Competition from Microsoft, Google

“I don’t believe AWS has established itself as the de facto leader in the telco cloud. However, they have made strong strides in this space with their launch of Wavelength,” which is based on its distributed cloud AWS Outpost offering, said Sid Nag, VP of cloud services and technology at Gartner.

Patrick Filkins, senior analyst at IDC, takes a similar view. “I would not say AWS is running away with the telco cloud market, yet,” he said.

“I do think AWS has a significant opportunity to prove its Outpost and Local Zones are up to the task for running 5G network applications, particularly radio access network (RAN) functions. It’s still too early to call it a success though,” Filkins explained.

AWS has been aggressive in the telco space and has effectively aligned its portfolio with the unique needs of service providers, according to Zeus Kerravala, founder and principal analyst at ZK Research.

“AWS has been very customer centric,” he said. “They built their services by working backwards from a telco’s problems utilizing a telco ISV partner ecosystem to provide meaningful solutions that meet the stringent telco demands.”

The company is deeply invested in the telco space and “virtually all the major telco providers now use AWS in a significant way and also partner with them for a variety of solutions,” Kerravala added.

AWS Earns Praise for ‘Builders Mentality’

Because AWS has approached the telco ecosystem with a “builders mentality,” network operators that build service on AWS can utilize a programming model that extends across AWS’s edge continuum, he added.

“Telco applications like 5G cores and operations and business support systems (OSS/BSS) are deployed and scaled across AWS regions and edge services like Outposts, Wavelength, and Local Zones,” Kerravala explained, adding that infrastructure ubiquity is critical.

AWS, Microsoft Azure, and Google Cloud are all cultivated edge infrastructure models for public and private workloads, Filkins noted. “Where the cloud providers will look to differentiate is how they manage cloud-native network workloads, or containerized network functions (CNFs),” he said.

“AWS had first-mover advantage in the telco cloud, but Microsoft Azure and Google are fast followers and a significant threat to AWS,” said Patrick Kelly, founder and principal analyst at Appledore Research. “Azure is better positioned in the mid and large enterprise market to capture share. Google is better for artificial intelligence and analytics, and has a solid strategy for capturing the edge market.”

Kelly views Google as “the wildcard player” in the telco cloud market, and highlighted Google’s agreements with AT&T, Telefónica, Telus, Telecom Italia Mobile, Orange, and Vodafone, as evidence of its strength.

“It may be that AWS does start to run away with the network stack for standalone 5G, although the marker for me will be when you see a traditional operator really kind of double down there,” McQuire said.

Pointing to the U.S. market, Nag said “AWS seems to be ahead although Microsoft, Google, and IBM have made similar announcements with AT&T and Verizon.”