Sunday, March 13, 2022

Connectivity and Cloud Computing are Merging: Danger for Connectivity Providers

One big strategic change in the era of distributed, competitive, virtualized computing and networking is that the demarcation between industry participants is becoming more porous. That is to say, formerly-distinct roles are becoming less distinct. 


To put it another way, firms that once were not direct competitors now are emerging in such roles. This is not a new theme in the connectivity business. Encroachment has been happening for close to 20 years,  

according to Michael Porter.


To be sure, product demand also has shifted. People prefer to use mobile networks and devices for voice and messaging. But voice over IP also has destroyed the gross revenue and profit margin of international calling. App messaging has replaced carrier-sold text messaging. 

 

And now mobile platforms are being leveraged for private networking. Non-carrier 5G and networking offerings are gaining momentum, says Dan Bieler, Forrester principal analyst. 


“All major hyperscalers showcased (at Mobile World Congress) how they are getting more heavily involved in the networking  arena,” says Bieler. 


Google is working on network slicing on Android 12 for providing access to Google Cloud. 


Microsoft’s Azure for operators is a 5G overlay on Azure cloud WAN where Microsoft’s internet backbone carries the customers’ traffic.


Amazon Web Services is offering  private 5G solutions and cloud WAN and edge application offerings. 


“A new threat for telcos is on the horizon,” says Bieler. Importantly, “the lines are blurring between cloud computing and networking.”


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