Is a hybrid cloud approach more of a band-aid than a future-proofed strategy? Is single vendor lock-in a trap lying in wait? And are there any discernible benefits to mothballing legacy systems?
As telcos take to the clouds, balancing cloud-native ambitions with more grounded legacy system obligations is no small feat. The potential rewards are high, but the obstacles in reaching such an altitude can be equally imposing.
The advent of 5G has compelled industry players to adopt cloud technology alongside the enduring complexity – and costliness – of managing legacy networks.
This evolution from physical infrastructures to private clouds underscores the critical decisions to be taken regarding proprietary versus open standards, and whether to adopt a fully cloud-native or hybrid architecture.
Meanwhile, collaborations with hyperscalers for service orchestration and edge computing further shape future competitiveness, while key roles are also to be played by automation, AI-driven analytics, and virtualisation.
In the pursuit of sustainable growth, innovation, and
operational efficiency, what do telco leaders need to ask
themselves to effectively manage their legacy systems and
accelerating cloud capabilities?
1. "What architecture is right for my
business?"
Telcos face a pivotal choice: go fully cloud-native or opt for a
hybrid model.
Cloud-native solutions offer agility and streamline operations but
involve extensive overhauls and high upfront costs. A hybrid
approach, integrating existing infrastructure, may reduce initial
expenses and risks but this can complicate operations, potentially
slowing innovation.
As cloud-native technologies mature, hybrid models continue to
dominate due to their ability to juggle workloads and foster
gradual transitions. Utilising public clouds for non-critical tasks
while keeping core operations private can strike a solid balance
between innovation and stability.
However, the shift towards all-encompassing cloud-native
deployments is gaining traction as telcos harness these
solutions' efficiencies. It is therefore vital to balance this
technological migration while focusing intensely on customer
experience. By leading customers towards new cloud-based services,
telcos can nurture loyalty and spur growth, ensuring minimal
disruption to their existing systems. Ultimately, the successful
migration of customers to new offerings will be key to sustaining a
competitive advantage.
2. "Should I work with a single vendor or blend
best-of-breed solutions?"
Telcos must choose wisely between a single-vendor solution or a
best-of-breed strategy.
Single-vendor solutions offer simplicity and seamless operations
but often trap companies in vendor lock-in, stifling flexibility
and innovation. Meanwhile, a best-of-breed approach allows telcos
to cherry-pick top-tier technology for individual functions, though
it can spawn integration hurdles and operational
complexities.
These critical decisions transcend technology stacks and influence
broader business strategies. For instance, larger telcos usually
retain control over core functions such as billing and customer
management while outsourcing edge functions like network management
and data analysis. This not only fosters innovation and ensures
stability but also mitigates vendor lock-in risks.
Clarity in demarcating core and edge services is vital to avoid
fragmented architectures. Moreover, while a best-of-breed model
might suit an operator with $100 billion in revenue, smaller
players with revenues below $2 billion might steer clear due to the
complexity of this approach.
3. "How will my business model need to
change?"
The transition to cloud-based operations requires a fundamental
overhaul of a telco's business model.
Traditionally rooted in hierarchical, process-driven methodologies,
telcos must pivot to a more flexible and agile framework rooted in
DevOps principles. This transition affects not just operational
processes but also financial strategies, shifting from
capital-heavy investments in infrastructure to a model based on
operational expenditures with usage-based pricing.
While this OPEX model introduces flexibility, it demands rigorous
cost-control mechanisms to prevent unforeseen expenses and truly
capitalise on cloud-enabled efficiencies. Inspired by the
nimbleness of tech giants like Netflix and Amazon, telcos are
implementing practices such as DevOps and CI/CD to streamline
operations and hasten service delivery.
The integration of automation and AI-powered analytics is
revolutionising network management, decreasing manual tasks and
boosting performance. This evolution goes hand in hand with an
organisational culture shift – one that involves staff
retraining, role redefinitions, and new process adoptions. Without
these essential changes, the full advantages of an agile
operational model will remain elusive, undermining the potential
gains of cloud adoption.
4. "What should I do with my legacy
systems?"
A significant hurdle for telcos is the management of their
extensive legacy infrastructure.
While moving to the cloud presents undeniable advantages –
such as heightened performance, reduced maintenance expenses, and
seamless integration with new applications – the path to
cloud migration is fraught with complexity. Migration can extend
the life of legacy systems and enhance their integration with
modern cloud-based applications, but it also requires careful
planning and significant resources.
Conversely, completely decommissioning these systems may initially
appear cost-effective, but this can quickly spiral into operational
inefficiencies, stifling innovation and adaptability.
As migration tools improve and associated costs decrease, telcos
are increasingly poised to relocate more of their legacy frameworks
to the cloud. This considered yet gradual migration not only
ensures future-readiness but also paves the way for innovative,
cloud-native solutions.
5. "Which hyperscaler is right for my
business?"
Not all hyperscalers are alike, and telcos need to judiciously
assess each provider's offerings.
The critical components of cost, capability, support, and alignment
with telco-specific needs are paramount to this evaluation. Every
hyperscaler, be it AWS, Google Cloud, or Azure, brings unique
strengths and weaknesses to the table, so making the right choice
will be a key success factor for telco cloud strategies.
This is about more than just the lowest cost or the widest array of
features; it is about aligning a hyperscaler's strengths with a
telco's strategic objectives. Missteps here can result in
diminished performance and inflated costs, complicating
scalability.
Moreover, the choice directly influences how a telco can
differentiate itself, an imperative in a landscape where agility
and innovation reign supreme. By leveraging multiple hyperscaler
strengths, telcos can optimise costs and performance, mitigating
vendor dependency risks.
A multi-cloud approach also offers the dexterity to align specific
workloads with the most fitting provider, thus ensuring robust
performance, scalability, and security. As hyperscalers innovate
with telco-centric solutions, closer partnerships between operators
and cloud providers promise to supercharge service delivery and
foster further innovation.
A cautionary conclusion...
There are many pivotal choices that will impact telcos' competitive edge in a cloud-enabled era. Missteps or misunderstandings could come at a significant financial cost.
By way of example, managing existing data centres is crucial.
Many operators are burdened by sizeable legacy infrastructure costs, so assessing total cost of ownership (TCO) is vital to avoid spiralling expenses. Effective strategies involve deciding which centres to retain, repurpose, or shut down as workloads migrate. Consolidating or terminating excess facilities can reduce costs and modernise infrastructure, concentrating on fewer, more efficient data centres.
However, cloud costs are often underestimated, too; migration can lead to unexpected expenses due to cloud complexity and inefficiencies. Telcos must implement strong financial and operational models to control costs and establish governance, ensuring cloud investments are sustainable. This approach enables a competitive, agile operational framework aligned with long-term objectives.
All told, striking the right balance between legacy system strategy and cloud-native innovation is essential, ultimately delivering flexible, scalable solutions to improve service, manage costs, and enhance agility. Mastery here can position them as leaders for the 5G era and beyond.
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