I’ve worked with telcos for decades, consulting with them, cooperating on international standards bodies, and sharing meals and drinks with many of their executives and planning staffs. There’s a lot of good things you can say about them, but even I have to admit that they have a tendency to take root and become trees. That’s one reason why I have to wonder about a story (quoting an analyst study) that says that each big telco will spend $1 billion on cloud network transformation. The other is that I’m hearing nothing from operators to support the statement.
This story suggests a huge boom in cloud usage as part of the telco network, one that will generate enormous investment and necessarily generate even more enormous benefits to justify that spending. This, at a time when enterprises, who have way longer and broader experience with public cloud services than telcos do, have decided that cloud cost overruns are often crippling and some companies (Basecamp, for example) have saved millions moving higher-level features off the public cloud and into the data center. So are telcos behind the enterprises in recognizing that the cloud’s savings are often illusory, or are they ahead of their usual pace in accepting new technologies?
The devil, they say, is in the details, and it’s not just this general prediction I have a problem with. According to the article, “46% of telco network capacity will be entirely cloud native in the next three to five years.” There is simply no way that’s going to happen, unless somebody proposes that we redefine both “cloud-native” and “cloud”. I don’t know a single telco who plans to do anything like that. Network capacity is based on routers and optical paths. A big Tier One in the US told me over a decade ago that they’d looked at hosted router capabilities to save money, not in the cloud but in their own facilities, and had determined that they couldn’t perform as the task required. To host virtual routers in the cloud, as a “virtual network function”, has also been examined and rejected.
I talked to a telco CTO on this point two weeks ago, obviously not relating to the story/study but to the question of transport evolution. They were excited about “convergence” on more optical capacity, but they were not excited about the use of VNFs for traffic. The problem was cost. Cloud providers charge for traffic, and so about the silliest thing you can do in the cloud is push a lot of featureless bits through it. “We ran the numbers on a carrier Ethernet business connection, and the cost of VNFs even providing security was outlandish.”
The comments cast doubt on the benefits of hosting real network elements in the cloud. According to the article, early adopters, defined as companies with “a comprehensive telco cloud strategy with well-defined goals and timelines; advanced players in terms of the proportion of network functions that have been virtualized; and those that expect more than 50 percent of their network capacity be on cloud”, will recover 47% of their investment in three to five years. Let me get this straight. These people are going to go to their CFO with a project that won’t pay back even half its cost within three to five years? I don’t know any CFOs who wouldn’t throw them out of the office with that story.
Finally, we have the notion that a BT project that’s saving them a lot of money with the cloud. The problem is that it’s not using the cloud to push bits, but to host what are really OSS/BSS applications now run on mainframes. Cloud network transformation doesn’t happen because somebody moves record-keeping on customers or assets to the cloud. None of that has anything to do with network capacity. To move network capacity to the cloud, you’d have to move service data plane handling to the cloud, and there is absolutely no operator I’ve talked with that’s looking to do that. Even if, contrary to my CTO comment, virtual functions might support business point-of-connection services, NFV’s support of those is focused on universal CPE (uCPE), meaning open white-box devices on the customer premises and not in the cloud. And the initial NFV “Call for Action” white paper made it clear that routers and big iron traffic-handlers were not targets of NFV.
That doesn’t even get to the point about “cloud-native”. Like a lot of concepts that get good ink, the term is smeared across a bunch of things it rightfully shouldn’t be applied to. I believe that “cloud-native” means “created from stateless microservices”, and that structure is reasonable for GUIs but totally unreasonable for data-plane handling for the simple reason that there’s too much message traffic between components.
The story introduces comments about 5G and Open RAN, which suggest that all this is moving traffic to the cloud, but the majority of virtual-function usage defined in 5G relates to control-plane rather than data-plane behavior, and while O-RAN does define data-plane elements as hosted functions, operators are interested in this more as a means of opening up the implementation to white boxes and local servers, not pushing the functions to the cloud. RAN is an edge function, and you can’t backhaul a data plane to a cloud hosting point.
The story, and apparently the study, also talk about 5G and Open RAN as sources of “potentially lucrative services and use cases”, but where are they? We’ve had 5G discussions for five years, and there have been no new lucrative services, only continued speculation. Yes, there are still operators (and 5G vendors) who believe in these new services and use cases, but there’s also plenty of people who believe in elves and the tooth fairy, and some who think the earth is flat. Wishing won’t make it so.
I think that the main problem here is conflation. People think of telcos as network operators, as though all they operated were networks. A big telco has the same business management issues as any other big company. They have, hire, fire, and pay employees, manage real estate, file tax reports, handle their stock activity, and so forth. All this stuff is lumped into “OSS/BSS”, and while things even relating to the network are only a small part of that, even OSS/BSS gets lumped into “network”. The problem with this particular story/report is that it says that “46% of telco network capacity will be entirely cloud native in the next three to five years.” As I said earlier, there is simply no way that’s going to happen and I don’t know any real telco operations type who believes otherwise.
Another conflation problem is treating virtualization and hosting of features as being the same as public cloud hosting. The NFV ISG didn’t propose to move features to the public cloud. The initial work focused on deploying features on carrier cloud hosting. My own work with the ISG was directed at making virtual functions compatible with the platform software used to build clouds, so as to take advantage of the capabilities being developed there. I’m not suggesting that there was, and is, no value in public cloud hosting of some functions, only that saying that VNFs make up things like 5G doesn’t mean that they’re hosted in public clouds. A “cloud” VNF isn’t necessarily a public cloud VNF, and that connection is made way too often.
I don’t have access to the report the article cites, so I can’t say whether it’s responsible for the claims, whether it has been summarized inaccurately by somebody, or whether the reporter didn’t understand the details. In a sense, I’m surprised, but in another sense maybe not. Is this another example of pushing hype? If so, it would be really disappointing.