Microsoft
’s
MSFT
recent slew of developments pertaining to enhancements of 5G networking capabilities to transform cloud and edge computing, seems to be gaining traction already.
England-based telecommunications and internet service provider, Three UK, recently deployed Evolving Systems’
EVOL
Total Number Management (or TNM) solution on Microsoft Azure.
With this deployment, Three UK becomes part of the growing list of communications service providers (or CSPs) implementing a cloud-first strategy on Azure.
Cloud computing capabilities of Azure will aid CSPs like Three UK to enhance operational efficiency and reduce costs and improve Operational Support Systems (OSS) and Business Support Systems (BSS) infrastructures.
In fact, the Three UK deal is a big win for Azure as it bodes well for growing clout in Europe. Markedly, “Three UK has 10 million customers and is part of the CK Hutchison Holdings Ltd group of companies which has mobile operations in 11 countries.”
Azure will enable Three UK to leverage TNM solution to securely manage SIMs, telephone numbers, and related resources, all via a unified data repository.
Increasing popularity of Azure among telco players, challenges the competitive prowess of Amazon’s
AMZN
Amazon Web Services, Alphabet’s
GOOGL
Google Cloud Platform (or GCP), and International Business Machines Corporation’s
IBM
IBM Cloud.
Growing Stance to Lure Telcos Remains Noteworthy
Microsoft Azure, on edge or in the cloud, and AI and machine learning (ML) capabilities assists telco operators to automate business processes and create service differentiation.
The company is working in collaboration with the telecommunications industry to develop a carrier-grade platform for edge and cloud –– Azure for Operators. The introduction of Azure for Operators is anticipated to aid Azure in providing customers with robust 5G edge computing offerings, which is the need of the hour.
The company also aims to support operators to evolve infrastructure and operations by leveraging software-defined networking, network function virtualization, and service-based architecture technologies.
Besides, synergies from Metaswitch and Affirmed Networks buyouts combined with capabilities of Azure Cognitive Services, Azure Machine Learning, Azure IoT Central and Azure IoT will enable operators in simplifying operations, designing new services to monetize the network, and obtaining greater insights and mapping evolving customer preferences.
Moreover, Microsoft raised the bar with the launch of Azure Communications Services platform at the Ignite conference, taking the fight to Twilio
TWLO
. Per the company, this platform will make it simpler for developers to insert voice/video calling, chat, and SMS features to various devices like smartphones, PCs and even websites by writing a few lines of code.
The tech giant recently joined forces with Viasat Inc. to offer Azure customers with the latter’s Real-Time Earth (RTE) services. The availability of this hybrid space and ground network, which brings affordability and reduced latency to the earth observation and remote sensing applications, is likely to be a boon for Microsoft’s cloud customers. This service will be made available for Microsoft Orbital ecosystem — a new service introduced by Microsoft to provide satellite operators with direct access to Azure through owned and partner antennas.
These initiatives are expected to generate incremental adoption of Azure among telecom companies, which augurs well for Microsoft. Notably, the company currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Alluring Telecom Cloud Market Prospects
Telcos are looking for digitizing their businesses and tap on evolving Internet demand triggered by accelerated deployment of 5G. Meanwhile, cloud stalwarts stand to gain from the huge amount of data they can gain control over, which is the pathway to driving ad revenues, e-commerce, and adoption of other kinds of technologies.
Markedly, the coronavirus crisis has led to remote working wave. Moreover, shelter-in-place guidelines induced self-isolation and social distancing is driving demand for networking at the edge and data center.
These factors are expected to trigger growth in the telecom cloud market, which per
Mordor Intelligence data
, is set to hit $50.77 billion by 2025 from $17.15 billion in 2019, at a CAGR of 20.89% between 2020 and 2025.
Year-to-Date Price Performance
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Competitive Scenario
AWS, the dominant cloud player, is gaining from growing clout of AWS Wavelength, which is a combination of AWS compute and storage services and cutting edge 5G networks.
AWS Wavelength is an infrastructure offering that has been optimized for mobile edge computing applications. In fact, Verizon Communications (VZ), together with AWS, recently added three more 5G mobile edge computing (MEC) cities — Atlanta, New York City and Washington, DC — bringing the total to five. Last month, the companies introduced the MEC platform in Boston and San Francisco Bay Area, and are committed to covering more cities by the end of 2020.
This partnership will aid Amazon, currently carrying a Zacks Rank #3 (Hold), in making AWS Wavelength available across the United States. Additionally, the company has teamed up with Vodafone, SK Telecom, and KDDI to make the service available in Europe, South Korea, and Japan by 2020.
Also, strength in related offerings like AWS Machine Learning for Telecommunication, hold promise. Moreover, in August, AWS and Bharti Airtel inked multi-year deal to accelerate digital transformation of business in India. Further, Ribbon
RBBN
recently tapped AWS to deploy its SBC SWe Lite platform for flexible and cost-efficient public cloud deployments.
Meanwhile, Google Cloud rolled out Anthos for Telecom solution in early March, in a bid to enhance presence in the 5G edge computing space. The aim is to aid telecom companies in monetizing their 5G network services by leveraging the edge computing capabilities of the Google Cloud platform.
Moreover, its strategic alliance with AT&T remains noteworthy. Google Cloud intends to leverage AT&T’s 5G network to build a suite of business products, which will offer low latency and strong security to the companies.
Likewise, Vodafone has selected Google Cloud to run its strategic cloud platform for data analytics, business intelligence, and machine learning, called Neuron. Alphabet currently carries a Zacks Rank #3.
IBM is trying to pull up socks and up the game with Red Hat synergies. The company is leveraging Red Hat’s OpenShift platform to develop solutions like IBM Telco Network Cloud Manager, which will aid telecom operators in modernizing their networks and improve efficiency.
IBM, currently carrying a Zacks Rank #3, is also collaborating with telecom operator M1 to develop and test Industry 4.0 solutions utilizing 5G and edge computing for Singapore’s Infocomm Media Development Authority (IMDA).
Notably, per
Synergy Research Group’s data on second-quarter 2020
,
IBM’s market share of 5%
in cloud infrastructure services market, trails Amazon’s 33%, Microsoft’s 18%, and Google’s 9%.
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