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What is telco cloud?

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Telco cloud is a software-defined, highly resilient cloud infrastructure that allows telcos to add services more quickly, respond faster to changes in demand, and centrally manage their resources more efficiently. It is one of the key foundational components for transforming a telecommunications company into a digital service provider.

Early telco clouds applied virtualization concepts from the datacenter into the network. With the advent of 5G, telco clouds building upon newer technologies like containers and microservices, as well as hybrid cloud architectures. As they are deployed into telco clouds, containers and microservices will have to coexist with older virtualized network functions (VNFs), like EPC, SD-WAN and security technologies, that are running today.

Network function virtualization (NFV) and software-defined networking (SDN) lowered costs in early telco clouds with a "lift and shift" of appliance-based network elements (like routers, firewalls, and load balancers) to software-based equivalents. Services were packaged as virtual machines (VMs) on commodity hardware, which allowed service providers to run their network without the expense of proprietary hardware.

However, the NFV infrastructure often still ran in vertically integrated stacks, providing the simplicity of working and resolving problems with a single vendor, but similar to proprietary appliances these limited operators to that vendor’s agenda and roadmaps. Telcos and cloud service providers deployed a number of virtual network functions, but over time found that VNFs delivered in vertically integrated stacks alone didn’t deliver the expected benefits of agility and lower costs.

Today, telco cloud has evolved to embrace an open, horizontal, hybrid approach to cloud infrastructure that increases flexibility and vendor independence. Operators currently deploy both horizontally and vertically integrated stacks, but the industry is recognizing that the open, horizontal approach leads to faster innovation, improved performance, and increased agility, as well as significantly reduced total cost of ownership.

Newer technologies like containers, microservices, and Kubernetes, and methodologies like Agile and DevOps, provide the speed, agility, and scalability to add services quickly and efficiently, as well as to centrally manage and orchestrate resources. Containers make it easy to move applications between environments (dev, test, production, core, edge, etc.) while retaining full functionality. They also make it possible to build and run scalable applications across public, private, and hybrid clouds. 

The high level of abstraction that containerization provides reduces the complexity of managing the underlying infrastructure so developers can focus on writing code while operations teams focus on the infrastructure. For telcos though, not every workload can run in a container. As second generation telco cloud infrastructures evolve they still need to support VNFs. 

Microservices decompose network functions and apps into loosely coupled systems that are resilient, manageable, and observable. They are also granular, lightweight, and able to be shared across multiple network functions and apps. When combined with robust automation, microservices allow operators to make changes to network functions and infrastructure more frequently, predictably, and with minimal effort and impact.

Microservices-based apps are created using smaller, standalone components. New features and fixes for microservices can be quickly developed, tested, and deployed using best practices (like Agile, iterative DevOps cycles, and CI/CD) without impacting other components of the application.

Microservices also allow for a high level of automation for scaling, lifecycle management, and running containers on bare metal. This makes them suitable to run in hybrid (private/public) cloud environments where they provide a common platform for cloud-native OSS/BSS platforms and other mission critical apps.

Enterprise clouds run internal, administrative functions and can have customer-facing portals, all delivered in a mix of public, private, and hybrid configurations. Telco clouds are typically private clouds today focused on running more restrictive network functions and mission-critical business apps that require much higher levels of observability, control, fault tolerance, and availability. For example, virtual radio access networks (vRAN) and open RAN require a real-time environment that extends out to the edge of the network and meets stringent throughput, latency, and resiliency requirements that are beyond the capabilities of the typical enterprise cloud. 

The telco cloud can extend to access resources outside of the operators’ own private clouds to take advantage of public cloud capabilities and build a hybrid cloud environment. While datacenters have fixed physical and logical boundaries, telco clouds logically cross datacenters, central offices, and even edge locations. With a telco cloud, network functions (e.g., IoT, 5G, SD-WAN, VNFs) and other workloads are run wherever they can be best optimized for parameters like efficiency, performance, latency, and customer experience.

For telco applications that do not have critical real-time or low latency requirements, public and hybrid cloud deployments can be ideal as they take advantage of scale on demand and pay per use capabilities.

Public cloud is also a good fit for applications that perform well on standard CPUs and have no unique network dependencies, such as service assurance , billing, and charging. In addition, public cloud is well suited for supporting innovation incubation and pilot projects. With its elasticity and pay-as-you go pricing, it is also an excellent source of standby infrastructure for elastic capacity scaling and redundancy for critical services failover.

Private cloud provides telcos with the cost efficiency and improved control needed to support applications with stringent requirements for low latency, large amounts of storage, specialized compute resources, such as virtualized network functions, radio area networks, and edge apps and services. Private cloud is also sometimes required for compliance with geopolitical, government, and industry regulations. In addition, private cloud is also well suited for applications and services with consistent demand and 24x7 operations, like IPTV and live streaming video, as well workloads that would drive high consumption costs on public clouds.

Combining private and public clouds into a hybrid cloud allows telcos to optimize the operations of a variety of workloads with different demand patterns. Hybrid cloud infrastructure can be highly elastic, agile, and resilient for network services and applications. When managed with a container platform like Red Hat OpenShift, it can also provide interoperability and portability horizontally across private and public clouds, as well as uniform consistent interfaces for easier development, operations, and life-cycle management.

The primary business benefits of telco cloud are improved customer satisfaction, greater business agility, and cost reduction. CapEx and OpEx are lowered through the use of standard compute hardware and automation.

Telcos today are using telco cloud to:

  • Create differentiation through new services and capabilities that cannot easily be replicated by competitors. Cloud-native architecture and app dev methodologies like Agile and DevOps allow telcos to dramatically reduce time-to-deploy and improve time-to-revenue by quickly integrating cloud-based apps and features targeted to specific customer segments.

  • Deliver new customized B2B solutions. Telcos can quickly and economically bring highly customized enterprise solutions to market. Telco cloud makes it easy to co-create with enterprise service partners using public cloud services’ anytime, anywhere, any device access.

  • Build new 5G revenue streams. This is a strategic imperative for most mobile operators. Effectively monetizing 5G network capabilities requires the new core and edge network capabilities that telco cloud provides.

  • Protect customers and margins from competitors. Telco cloud allows operators to quickly adapt business models to pilot innovations like new products, services, and pricing plans. It also streamlines the process of standing up new customer experiences and communications channels. In addition, telco cloud’s reduced CapEX and OpEX requirements, improved service resilience, and ability to quickly respond to faults and demand fluctuations allows operators to maintain service  levels and competitive pricing. The impact of these benefits is reduced customer churn.

  • Build stronger digital relationships with customers. Operators with hybrid telco cloud deployments can take advantage of best-in-class data analytics and artificial intelligence available in the public cloud domain to better meet and predict customers’ preferences and requirements. They can also centralize their customer data in the cloud to eliminate siloed databases, create a 360-degree view of the customer, and deliver an engaging omni-channel customer experience.

OSS and BSS play a key role in customer relationships and experience. When they are cloud native, OSS and BSS apps can react much faster than in the legacy monolithic apps. In addition, cloud-native OSS/BSS apps built on microservices running in a telco cloud can dramatically improve time-to-market by reducing the cost and complexity of onboarding new features and services. Telco cloud also reduces network operations complexity with cloud-native analytics and AI-driven automation that reduce OpEx and free IT staff for activities focused on the core business. This increases operational and business agility to help operators enhance customer experience and maintain a competitive edge.

Telco clouds scale elastically. Applications and services can be spun up and down when needed, allocating available compute and storage capacity as needed. It is not necessary to provision for peak capacity. In addition, with a telco cloud extended logically across datacenters, central offices, public cloud, and even edge locations, there is almost limitless capacity in a hybrid environment. Workloads can be quickly moved to handle traffic spikes, work around faults, accommodate additional remote workers, onboard new customers, etc. In addition, when managed at the service level, all these elements—provisioning, deploying workloads, increasing capacity, security, compliance, etc.—can be automated, reducing OpEx and freeing IT staff for more strategic or revenue-generating activities.

While greenfield operators can build a completely cloud-native environment from the ground up, established operators must build their telco cloud to interoperate with legacy network environments. Legacy and cloud-native networks need to co-exist for some period, allowing operators to migrate network functions, services, and apps in a way and at a time that makes the most sense for their businesses.

When migrating to a cloud-native architecture, a holistic approach is key. The migration might be implemented one network function or service at a time, but the process should start with a comprehensive cloud readiness assessment that encompases infrastructure, apps and service portfolios, organization, and processes. 

Other considerations include: 

  • Doing everything internally, building a partner ecosystem, working with an overarching systems integrator, or a combination of the three

  • Acceptable levels of up-front investment, risk, and time-to-market 

  • Best KPIs for success

A cloud readiness assessment guides operators through key decisions:

  • VNF migration strategyDefines which network functions may need to remain as VMs and which can be re-architected as cloud-native microservices. 

  • App migration strategyDefines which apps can be migrated to cloud-native infrastructure and re-architected as microservices.

  • Management and automation strategy. Details tools to be used to orchestrate and manage the environment efficiently and tools for automation. Defines priorities and plans for automating processes.

  • Private/public cloud mix. Defines the cloud mix based on parameters like ecosystem strategy, economics, operational capacity and capability, architecture, and time-to-market requirements, as well as how these things may change over time.

  • Ecosystem partners. Defining a pool of potential partners to be selected and used in the execution phase based on the quality of their products, services, and support, as well as their ability to collaborate quickly, efficiently, and effectively. In addition, a strategy for partner engagement needs to recognize that certain partners might be or later become competitors in some geographies or product and service categories.

Building a telco cloud on open source software delivers a wide range of benefits. Development teams innovate faster because open source makes it easy to mix and match industry-leading solutions from a wide variety of vendors to add new network functions, features, and technologies. In addition, open source support for containers and methodologies like Agile, DevOps, and CI/CD dramatically reduces time-to-market and lifecycle management intervals. 

Open source opens up a large partner ecosystem with less risk of vendor lock-in. A broader ecosystem, combined with eases of swapping microservice components, helps future proof the network. Building a hybrid telco cloud gives operators the ability to burst capacity beyond private cloud into the public cloud, allowing almost unlimited scalability. Containerized apps can be migrated from private to public cloud when appropriate without the need for resource-consuming integrations. Multiple public clouds can be used to increase the capacity available for resiliency if resources beyond the capacity of a single cloud service provider are required. Applications that do not produce greater value or are poorly supported in a public cloud environment can be easily migrated back to the private cloud or datacenter.

Open source delivers the benefit of faster innovation and problem resolution because entire communities are focused on solving the challenges of the future. Choosing open source means that telcos can avoid lock-in to a specific vendor’s technologies and roadmap. Red Hat provides feature-rich distributions of open source projects with value-added hardening and integration to improve usability and automate administrative functions and to increase security. Red Hat customers benefit from the company’s industry expertise and knowledge gained  from serving telecommunications and other customers around the globe.

Red Hat’s telco cloud solution provides telco-grade cloud platforms that support virtual and cloud-native network functions. OpenStack has become the open source NFV infrastructure de facto standard, and Red Hat® OpenStack® Platform is the leading commercial distribution. Kubernetes is the dominant container infrastructure orchestration technology, and Red Hat® OpenShift® is the leading commercial Kubernetes solution. Red Hat OpenStack and Red Hat OpenShift can help service providers achieve their next-generation telco cloud infrastructures. These Red Hat platforms build upon a Red Hat Enterprise Linux (the leading commercial Linux distribution) foundation, so the security, reliability, performance, ecosystem, and other benefits of Red Hat Enterprise Linux apply up through the entire stack.

Operators and the vendors they work with need the efficiency of creating solutions once and then choosing the best cloud infrastructure for running each of them. This simplifies the use of hybrid cloud infrastructure by making it possible to run workloads on multiple clouds without modification. Red Hat OpenShift can help operators establish a consistent development, CI/CD pipeline, and operational environment with better security for applications and services.

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