Edge Industry Review’s latest Fireside Chat interview talks about the fraught relationship between hyperscaler cloud providers and carriers with IBM VP of Edge and Cloud Bill Lambertson.
There is a complex relationship between hyperscalers and carriers such as AT&T, Verizon, BT, Orange and the like. The market has already seen lots of partnering with hyperscalers; Microsoft Azure and AT&T, AWS and Verizon, Bell Canada and Google Cloud are but a few examples of existing partnerships.
Carriers aren’t shying away from partnering for edge cloud services even though they will also be competing in areas such as private 5G networks. Why? Building out cloud infrastructure is expensive, and carriers don’t have the money to invest in developing cloud software.
A recent survey from TM Forum conducted as part of the report showed that 34 percent of CSP respondents said it was “essential” to invest a significant proportion of revenues in R&D. However, the analysts conclude that CSPs will never catch up to hyperscalers on R&D.
The finding: hyperscalers overwhelm the telecom operators, with a cumulative total of nearly $1 trillion on R&D made in the last decade. That figure is 70 times the R&D spending of the four telecom operators. The R&D per revenue gap is also enormous, with Amazon spending 23 percent versus 3.4 percent for BT.
EdgeIR asked Lambertson for his perspective thoughts on the telco market and what carriers should be thinking about when these relationships likely become competitive. Among the topics covered:
- If the companies CSPs have traditionally relied on for technology innovation are also unable to match hyperscaler R&D what are the implications for CSP strategy?
- When competing against hyperscaler companies who are also increasing salary and stock compensation, is it realistic to try and hire lots of developers to become a “techco?”
- How should companies be addressing the balancing act between CSPs as competitors and partners?
- Thoughts on federated edge compute services after Deutsche Telecom sold MobiledgeX to Google.
Lambertson concludes by talking about the IBM and RedHat approach to the telco market as being a cloud and carrier-neutral vendor.
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