The decision by Nokia to outsource its internal cloud computing requirements to Google Cloud is designed to shift Nokia’s internal information systems from an “on-premises and owned” model to computing as a service.
But that move also illustrates the fuzziness of efforts to characterize “telco cloud” as a distinct market, as well as the impact of virtualization on telco internal information technology architecture.
Virtualization essentially means that computing support can be abstracted from network elements and placed anywhere it makes sense. In Nokia’s case, it seems that “place” is Google Cloud data centers, for business applications that support the business.
It is unclear how much of the computing workload to support Nokia’s service provider or enterprise customers actually will follow, as major connectivity service providers seek to become “cloud native” in their computing operations.
For mobile operators, cloud native is required to support 5G, which uses a software-driven architecture and Network Functions Virtualization.
As often is the case, virtually every major product category (sold or bought) already is counted somewhere, as part of some other “market.” Cloud computing is not different in that regard.
The term might include both internal computing (to support virtualized networks, for example) and cloud computing offered “as a service” to external customers (in the manner of Amazon Web Services, Google Cloud or Microsoft Azure).
Internal computing using cloud mechanisms include support for business operations, such as billing, provisioning, traffic management, marketing, customer support, inventory management, customer relationship management and so forth.
Cloud commuting as a service can be thought of as retail products sold to business customers, and could include computing, storage, platform, infrastructure or software sold “as a service.”
One sometimes sees a market forecast for “telco cloud” that could include both expressions of computing: internal information technology to support the business as well as a retail product sold to customers.
The issue in the former instance is that the “market” in question is already counted as part of the enterprise software and hardware revenue stream. Fulfillment of most software products now is by “cloud” delivery.
The issue in the latter instance is relatively few telcos actually are in the retail cloud computing business as brand-name suppliers, though some revenue might be earned supplying edge computing data center real estate.
There arguably was more optimism about the retail upside a decade ago, before the ecosystem began to stabilize. Not many still believe telcos will be major retail suppliers of cloud computing services to business or consumer end users.
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