The rise of big cloud and operator partnerships

This week, Google cemented its place as a main partner to the telecoms sector, with multiple partnership agreements for Google Cloud and the launch of its new strategy – the telecoms industry strategy – designed to enable telcos to tap into the opportunities presented to them as a result of the digital transformation.

It was operators from Europe that got the ball rolling. TIM was the first to sign an official technology collaboration agreement with Google Cloud. Both companies will partner to build public and private hybrid cloud services. This will inevitably boost TIM’s position in both cloud and edge computing in the market.

TIM anticipated that the collaboration will enable it to boost revenues from technology services to €1 billion by 2024, generating a further €400 million in earnings.

Cloud services, security, IT and other B2B services are categorised under ICT services on TIM’s financial report and all generated €618 million in revenues in the first nine months of 2019. The operator is expected to release its full-year report next week.

Deals with other European operators are definitely an advantage for Google, as it seeks to enhance its credentials as a cloud provider in the sphere of telecoms, much like competitors Microsoft and Amazon have done before it. This looked even more achievable when German Telco T-Systems signed a deal with Google Cloud that is reflective of the TIM agreement.

T-Systems said that their intention is to provide their business customers with better digitization and to enable better processes with the cloud. T-Systems intends to set up a Google Cloud competence centre that will focus on mass-scale workload migrations to the cloud, SAP application modernization, development of new AI (Artificial Intelligence) and ML (Machine Learning) solutions, solutions for data warehouse and data analytics in the cloud. The main industries targeted will be manufacturing, automotive, logistics and the public sector.

As we know, operators do not have to use an expert like Google. They could go it alone without their big cloud providers as the GSMA’s recently unveiled Telco Edge Cloud Platform has shown. This is partly designed to help operators expand their geographic reach. However, as partnership deals with the big Web firms come in quickly, the GSMA will have to work fast if it is to gain traction.

Big cloud providers are not likely to move slowly and on Thursday, Google Cloud announced their strategy for the telecoms industry, highlighting the pressure on operators to embrace the digital transformation. Its three-pronged strategy covers the monetization of 5G; customer engagement through data-driven experiences and improving operational efficiencies.

Google Cloud also said it will work with telcos to develop 5G solutions, and intends to create an open cloud platform for developing network-centric applications and a global distributed edge for deploying these solutions. It also announced a partnership with AT&T that will bring together the telco’s network capabilities at the edge, including 5G, with Google Cloud’s tech capabilities, including AI/ML and edge computing. The telcos and the big cloud companies really appear to be on the edge of something here. Expect the partnership announcements to keep coming.