Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Sarah Mills, CRO of Neos Networks, looks at how the telecoms industry can best adapt to the hyperscaler era.
The so-called Hyperscalers – companies such as Amazon, Google and Microsoft – are continuing to revolutionise global digital service provision. The evolution of these companies has been electric. All have established themselves as global infrastructure providers offering an array of platforms, software solutions, and services.
More recently these Hyperscalers have set their sights on the telecoms market with ambitions to use their global reach as well as their global brand to support traditional operators but also challenge them for market share.
At MWC Barcelona, held in February of this year, we heard just how integral embracing collaboration with cloud providers, including the Hyperscalers, would be to MNO success in a new frontier of network cloudification in the 5G and 6G eras.
Global demand for cloud computing (public cloud hosting), cloud-native mobile networks and network disaggregation, the rise of Software as a Service (SaaS), emerging e-commerce platforms, cloud gaming, and video streaming services have all fuelled this exponential demand for high capacity fibre and datacentre connectivity.
In the case of the Hyperscalers, they are quite literally buying capacity from telcos and co-location providers on an ‘as much as you can spare’ basis. This unquenchable demand from cloud platforms for limitless capacity is simply not sustainable with current traditional networks.
As a result, this demand is driving ongoing investment in fibre backbone deployment. Indeed, the Hyperscalers are looking to deploy some of their own infrastructure. Nevertheless, the bulk of this demand will be met by established providers of lit and unlit fibre backhaul – providing high quality, high bandwidth capacity to meet the short to medium term need. The question is, how does the UK’s fibre infrastructure match up to the task of coping with that increased pressure – and how ready is it to meet longer term requirements?
A fibre gold rush
We’re a long way from the supply and availability of fibre outstripping demand, and reaching capacity levels capable of quenching the thirst of the Hyperscalers and other service providers. Of course, while this demand for service represents a significant opportunity for telecoms companies, those network providers with the ability to offer flexibility and high capacity, low latency, resilient services look set to prosper.
In fact, what will be fundamental to truly meeting Hyperscaler demand isn’t the lit services that incumbent businesses focus on – they simply won’t provide the economies of scale. Rather, it’s delivering extended high capacity network reach (like Dark Fibre) to provide resilient and diverse network services with scalability and economics that can lessen the reliance on new builds.
Some fibre players share the view that this hunger for capacity is a sign that the Hyperscalers will eventually become everyone’s competitors. That certainly might be their strategy and it’s also possible that they will look to build their own capacity, but that won’t be easy. While deploying fibre in a duct or subduct may be simple enough, digs are disruptive and costly, and the baseline infrastructure needed to house some of those fibre cables needs to be particularly unique. The cost of maintenance of those networks also mounts, both physically and in terms of the different levels of security and software needed to manage them in the longer term.
Embracing cloud collaboration
On top of that, the Hyperscalers aren’t the only ones demanding high capacity services. The availability of a wholesale fibre backbone will be critical for business connectivity and 5G backhaul. Service providers will need high bandwidth transport networks to manage the huge data loads of 5G networks that will be increasingly defined by the specialist services they will support.
Of course, in many cases, those 5G deployment strategies will also involve the Hyperscalers. To maintain their market position service providers must now develop 5G-enabled services, portals, digital marketplaces and Networks as a Service (NaaS) solutions they can market, manage and maintain. This requires greater ecosystem collaboration, including the agile development that cloud providers can offer mobile operators through their platforms.
A cloud native approach to mobile network deployment offers service providers the best opportunity to build meaningful alliances and relationships with the Hyperscalers. To take advantage of their audience reach and scale, while at the same time maximising the return on investment from their infrastructure. An open approach to infrastructure does this far better, and with much faster economic returns, than a more traditional method.
Therefore, if the UK’s infrastructure is to meet the capacity requirements of Hyperscalers, operators and those service provision partnerships, aggregating and delivering a new fibre supply chain will be critical.
Investment in fibre backhaul will of course play a vital role, but so too will levelling the playing field as not all fibre infrastructure suppliers are treated equally by existing planning legislation. Some network operators have permitted development rights, for example, while smaller suppliers are required to self-validate orders when aggregating connectivity, which adds both additional time and increased cost to the process and therefore stifles the progress of gigabit network roll-out.
Fundamentally, capacity demands will only continue to grow, and in time, technology will make certain current connectivity solutions obsolete. Building networks to be future proofed, with near limitless capacity that aggregates the Dark Fibre supply chain, is the only way to meet capacity demands well into the future, securing the economic benefits for the businesses and communities that digital services are transforming.
Sarah Mills is Chief Revenue Officer at Neos Networks. She is responsible for strategy across the sales division, ensuring that Neos Networks’ customers and partners are well supported and that the company is reaching its ambitious growth targets. Sarah has over 15 years of experience, having worked at O2 for eight years, followed by seven years with Telefonica Global Solutions, leading business development and strategy across Latin America, China and Europe.