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Cloud

Cloud

Telcos could still edge it in the cloud

Nick Wood
By Nick Wood

Jun 25, 2019

via Flickr © John Liu (CC BY 2.0)

via Flickr © John Liu (CC BY 2.0)

  • Edge compute demand might open new doors for DSPs
  • Telcos could be a safe haven for data during uncertain times...
  • ...but these are still only niche market opportunities

Edge compute, data sovereignty and compliance offer new opportunities for telcos in the cloud, but these will only ever represent a small niche of the overall market.

This is according to Philip Laidler, partner and consulting director at STL Partners, who gave his views to TelecomTV following the news that Swisscom has decided to withdraw its SME cloud storage service, Storebox.

"I think what Swisscom did made absolute sense," he said.

Launched in 2012, Storebox was pitched as a standalone alternative to Dropbox for Swiss SMEs intent on storing corporate data in Switzerland. Three tiers are available, starting at five users for CHF41.70 per month, up to 50 users for CHF232.80 per month. Times change though, and rather than siloed services, companies are more interested in bundles that can be integrated into their internal IT systems.

Laidler posited that the only reason Swisscom attempted in the first place to charge small businesses a subscription to what is essentially a consumer service is because Swiss companies are obsessed with knowing where their data is stored.

However, uncertainty about global trade, and fears about censorship, spreading misinformation, and using the Internet to interfere with the politics of other countries, have pushed issues like data sovereignty back under the spotlight. While that doesn't mean premium enterprise cloud storage services are suddenly about to become de rigueur, it might offer new avenues for telcos.

"The current US trade policy isn't conducive to supporting a global flow of data. It's quite the opposite," Laidler said.

"Globalisation is in retreat and I think a lot of companies are very nervous. They're worried the hyperscalers (AWS, Microsoft and Google) will be vulnerable to [US] government intervention, so they are looking for partners that can give them more confidence around compliance and sovereignty."

This is where operators come in.

"Operators, by nature, fall within the jurisdiction of the local countries in which they operate," he said. This will appeal to local companies that don't want to surrender their corporate data to a superpower with a bee in its bonnet.

Earn a living on the edge

It's not just storing data on one particular side of a border that could yield opportunities for telcos. The industry is also in a strong position to capitalise on enterprise demand for edge computing.

"More and more companies are recognising that cloud can't fulfil some of their requirements, so they're looking for more distributed cloud and for more localised cloud," Laidler said. "Operators are building small data centres to support their virtualised networks and therefore they essentially are going to have an environment that they can use to offer edge compute, whether it's the complete stack, or some of the stack, or if it's NFVi, or it's entirely separate physical infrastructure that just sits alongside it in a different cabinet."

The virtualisation and distribution of core network functions throughout the network also puts telcos at an advantage.

"It's not just that they've got a physical facility they can share, it's also that those facilities represent an entry point in the network for edge compute," Laidler said "So it's also logically a good place to put edge compute as well as physically and commercially."

While this all sounds very promising, it's important to not carried away. Data sovereignty and edge compute are not going to turn telcos into the dominant players in cloud.

"We're talking about niche stuff round the edges," said Laidler. "Operators may secure 1-3 percent of the total global market...but they're not going to compete with the hyperscalers."

Related Topics
  • Amazon Web Services,
  • Analysis & Opinion,
  • Announcement,
  • Business Models,
  • Cloud,
  • Digital Platforms & Services,
  • Edge,
  • Enterprise,
  • Global,
  • Google,
  • Microsoft,
  • News,
  • Swisscom,
  • Telco & CSP

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