Core to cloud: the next phase in telco cloud adoption

CSPs must evaluate how they can innovate to create and monetize new services and experiences, without increasing prices, lengthening time to market or compromising the efficiency of their existing offerings.

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Steve Ellis, Division President and General Manager

Amdocs Cloud

21 Jul 2023

Core to cloud: the next phase in telco cloud adoption

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Our world is driven by the connectivity that communications service providers (CSPs) deliver to both people and businesses.

As our demands for connectivity evolve due to the introduction of technologies such as 5G, virtual reality, augmented reality, mixed reality, IoT and Generative AI, CSPs must evaluate how they can innovate to create and monetize new services and experiences, without increasing prices, lengthening time to market or compromising the efficiency of their existing offerings. How can they achieve this? Undoubtedly, one key pillar of the strategy is adopting cloud.

The cloud brings benefits that CSPs simply can’t access when hosting their core systems on-premise. From enhanced agility, scalability and network resilience to rapid innovation and improved security and regulatory compliance, the cloud is key for telecoms companies looking to up-level their offerings and provide amazing experiences. Cloud will also enable them to adopt enhanced analytics and AI-driven solutions, giving them greater cost control and more, all of which will result in more compelling and personalized experiences for their customers.

Where are we now?

Research from Capgemini recently reported that telcos will invest an average of over $1 billion in telco cloud over the next three to five years to support their mobile networks. So, while we know that many CSPs are a considerable distance along their paths to the cloud already, significant investment is still being pumped into this technology, which needs to be directed towards the areas that will give them the greatest advantage. But before looking ahead, let’s evaluate where we currently stand. 

So far, much of the telco cloud investment has been focused on the initial steps and ‘low-hanging fruit’ of a cloud adoption program. This includes strategy, establishing partnerships with the leading cloud providers, the creation of cloud ‘Centers of Excellence’ and building out knowledge and cloud capabilities. When it comes to migration, most of the work done has been with non-critical workloads as a way to trial and initiate the move without putting too much on the line. However, we’re quickly approaching the point where telcos will have to address the question of how to migrate their mission-critical core systems to the cloud – and that layers in a new level of complexity.

Core system migration is a significant undertaking as it touches the lifeblood of the organization. Any glitches in the migration could impact levels of service, customer experience and revenue streams – so extra care is needed. But as the industry powers ahead with new technologies and business opportunities, telcos must not allow themselves to fall behind the competition or miss the early mover opportunity. They need the power and scale of cloud in their core system capabilities to remain competitive, offer innovative services and avoid losing customers. ‘Core to cloud’ migrations are taking place now and will be completed within the next three to five years, so the time to act is now.

Finding the right path

To fully realize the benefits of core to cloud migration, telcos should design a custom strategy that will address their unique needs and situation, taking into account factors such as their business priorities, staff skill sets, existing data center strategies, funding and resources. For example, their cloud migration timeline may be designed to address a number of compelling events and dovetail with data center closedown, hardware and software refresh cycles or end of life, plans for skills acquisition and more. After working through cloud programs with dozens of customers, I can tell you that there are no templates. Each cloud plan is determined for each operator, according to a very specific individual set of needs and priorities.

There are several high-level paths that a cloud migration may follow. For some CSPs, cloud migration is part of a larger digital transformation initiative. For others, it may be more of a ‘migrate and modernize’ approach, driven by cost control, technology or a cloud-first strategy. T-Mobile US and Vodafone Germany, for example, are both deeply engaged in transformations. T-Mobile US has chosen to transform its next-generation hybrid-cloud operations to unlock efficiencies and improve its abilities around 5G. Vodafone Germany is also transforming to a cloud-native environment and adopting a DevOps strategy that will enhance the customer experience it provides.

On the other hand, AT&T Mexico and Vodafone Ireland have adopted a core to cloud approach – migrating their core BSS systems to the public cloud. The former is migrating its database and application workloads to the public cloud to benefit from greater flexibility and capacity, and similarly, the latter is migrating its infrastructure and application workloads to the cloud with the ambition of improving its customer experience and offering 5G services.

Whichever path telcos choose towards cloud adoption, they don’t have to travel it alone. Spending the time to decide which partners they want or need to work with on their journey can go far toward ensuring a smooth route with minimal disruption. This will enable them to seamlessly maintain the experiences their customers are used to receiving, and ensure they have all the skills they need to make it a success. 

Getting ahead with the cloud

As is true with many difficult decisions, delaying will often only make it worse. The time is now ripe for telcos to evaluate what they want to get out of their cloud migration, the type of budget they have to conduct it, and how to go about it. Whether it’s a complete transformation, a core to cloud migration or any other configuration of steps on the journey towards cloud-native, the urgency to start and speed through the journey is growing. My advice for you: don’t delay it further. 


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