VMware Ups Its Telco Cloud Game

VMware is stepping up in telco cloud. There’s no question that the company is drawing its positioning line in the sand, and there’s no question that it has the market position to make that line into a promise to buyers and a threat to competitors. The only question is how the moves will balance out; how they will direct VMware along what’s become a pretty tangled path. The biggest issues are the fact that “telco cloud” has become more than just hosting network functions, and that partnerships between public cloud providers and telcos threaten whether there’s really any “telco cloud” on the horizon at all. In short, the telco market has been a minefield for cloud vendors, and so VMware has a narrow path to navigate if it wants to succeed.

The most important thing about “telco cloud” is its uncertainty. So far, telcos have shown relatively little interest in deploying their own cloud infrastructure, and many have in fact fobbed off the mission to public cloud partnerships. It’s also clear that vendors like VMware would derive relatively little benefit from a “telco cloud” that was confined to a single application like network function hosting, even if there were independent deployments by telcos. Telco cloud is really edge, and so we have to look at everything that targets it in the light of its impact on (and how it’s impacted by) edge computing.

The key element of the VMware announcement is the VMware-provided Radio/RAN Intelligent Controller or RIC. The RIC is the key component of an O-RAN implementation, the thing that differentiates O-RAN from the more monolithic 3GPP 5G RAN model. For VMware to deploy its own version is a big deal; it gives them not only a differentiator relative to firms who use other RICs, but also an opportunity to tie the RIC, and O-RAN, more tightly to their cloud software. It seems clear, based on this, that VMware sees (correctly) that 5G will be an early driver for deployment of hosting resources at the edge, and thus is likely to be the first credible driver for edge computing deployment.

The thing about O-RAN, though, is that unless it does lead to edge computing, it becomes nothing more than an open model for hosting some arcane 5G RAN elements. If, on the other hand, it could define and jump-start edge deployment, it could be market-changing. Even so, O-RAN-centric positioning is just one of three possible ways of approaching the edge, so let’s look briefly at the other two in order to compare their effects, and see whether other models might threaten VMware.

The second edge model is the cloud-extension model, which says that edge computing is cloud computing hosted at the metro level rather than in regional data centers. The reason for the metro extension is to control latency, so edge computing is low-latency cloud computing based on this model.

The third edge model is the metro fabric model. This is the edge approach that most network equipment vendors give a nod to. Because edge computing is where higher-level network functions are hosted, edge locations need to have a different kind of networking, one less focused on simple aggregation and more on meshing of service components.

While I believe that VMware’s announcement (referenced above) demonstrates that it’s in the 5G-and-virtual-function-hosting camp with regard to the edge, it also seems to work hard to cover the other models. VMware Telco Cloud Platform-Public Cloud provides integration with public cloud services, and Telco Cloud Platform-Edge accommodates the metro-fabric approach by being largely network-agnostic. That makes the third of our models appear to be VMware’s biggest risk, but the biggest risk to VMware and everyone else is that what emerges in the end is a combination of the three models.

Back when Juniper announced its Cloud Metro strategy earlier this year, I blogged about what the future edge/metro should look like (as a prelude to assessing Juniper’s announcement). In effect, it’s a virtual data center made up of metro host points connected in a low-latency mesh, combined with the architectural tools to manage the infrastructure, deploy edge applications based on some architectural framework, and manage the resulting conglomerate. Metro/edge rebuilds networks around the role that metro necessarily plays in enhanced service hosting, and service features. It’s this vision that VMware and others somehow have to support.

You can see the three models of edge emerging in my virtual-data-center definition, and you can also perhaps see why 5G is a complicated driver for edge computing. The vendors like Ericsson and Nokia can offer a complete 5G strategy, but they have to reference external specifications and vendor/product combinations to expand this to edge computing. There are no convincing external specifications, no edge architectures like there is O-RAN for 5G. Vendors like VMware can reference O-RAN and describe edge strategy (as they do in the announcement) but they leave the network piece open, which means that network vendors could directly aim at the VMware position, and that any player could align with a network vendor, or define a metro network model.

What would VMware have to do to defend its Telco Cloud strategy? The VMware blog post I reference above lays out the elements of their strategy fairly well, but it doesn’t position it well, so that would be a good starting point. Most vendors who target the telecom space have a tendency to sell rather than market in their material. There’s nothing about benefits, value propositions. It’s about speeds and feeds, or at least about functional components. This reflects a view that the buyer community (the telcos) are actively seeking the solution the vendor is offering, and only needs to understand the pieces in the offering.

In the case of telco edge computing, I’d argue that events disprove this position. Telcos are actively seeking, at least for the moment, to avoid edge computing in the form of telco cloud deployments. They hope to realize 5G hosting through the public cloud providers, as I’ve already noted. My work with both telcos and enterprises over the years has shown me that successful sales is a matter of managing the trajectory that defines how “suspects” become “prospects” and then “customers” in turn. It’s tough to do that if you don’t address what those “suspects” are actually doing.

It wouldn’t be difficult for VMware to position their stuff right, to manage that critical trajectory, but while I can say that with a fair amount of confidence, I have to admit that the lack of difficulty hasn’t enabled other vendors to do much better. There seems to be a sell-side bias toward under-positioning and failing to consider the suspect-to-customer evolution.

What’s going to be more difficult for VMware is that its credibility depends on platform dominance, and it’s not really articulating an edge platform strategy. 5G hosting could pull through the edge providing that the edge architecture supported both future applications like IoT, and 5G. Right now, VMware is essentially saying that edge hosting is the same as cloud hosting, which if true takes a big step toward invalidating their own value proposition. If it’s not true, then it’s incumbent on VMware to explain what edge hosting really is.

VMware is, IMHO, the best edge-opportunity-positioned of the cloud-software players. They have great assets, and great insights. There’s a big opportunity in the metro/edge space and they seem determined to grab a major piece of it. We’ll watch to see how they do in 2023.