AWS, Google Cloud, and Microsoft Azure—What’s Been Happening with Hyperscalers and Private Networks?

Subscribe To Download This Insight

By Leo Gergs | 3Q 2022 | IN-6654

The big three hyperscalers—Amazon Web Services (AWS), Google Cloud, and Microsoft—all have made new announcements on their private network portfolio over the summer of 2022. This ABI Insight summarizes current developments and analyzes their impact on the private network value chain.

Registered users can unlock up to five pieces of premium content each month.

Log in or register to unlock this Insight.


Major Hyperscalers Announced Their Private Network Strategies during the Summer


Earlier in August, Amazon Web Services (AWS) announced the commercial availability of its Private 5G solution, ending the month-long trial phase of the offering. For shortest time to market, AWS makes this available in three of its existing regions in the United States—US East (Ohio), US East (N. Virginia), and US West (Oregon). The envisioned pricing strategy behind this offering is straight forward as it charges US$10 for each hour of operation per radio (with a minimum of 60 days of continuous operation). While this will ensure that enterprises are charged exactly for what they use in terms of cellular network, it also gives them a way to precisely predict their networking expenses, which is important, especially as increasing costs of production will challenge enterprise profitability, further limiting their investment capabilities.

Google announced its private network portfolio earlier in June, relying on an extensive partnership network. Together with Betacom, Boingo Wireless, Celona, Crown Castle, and Kajeet, Google aims to offer turnkey private 5G with the option to run network management, control, and user plane functions in the cloud-cloud and the edge-cloud on-site. While commercial specifics have yet to be announced, the offering will initially target deployments in the United States, the United Kingdom, Germany, Japan, and South Korea, where respective regulators have made spectrum available to enterprises directly (see ABI Research’s Shared Spectrum & Private Networks Tracker for details).

Microsoft, despite having acquired telco infrastructure expertise by taking over Affirmed Networks and Metaswitch in 2020, still concentrates its enterprise aspirations on providing its Azure platform to Communication Service Providers (CSPs) to strengthen their enterprise digitization capabilities.

Hyperscalers Are Manifesting Their Place in the Private Network Supply Chain


The different announcements throughout the summer proved one of ABI Research’s key expectations for the year 2022 to be right: hyperscalers have accelerated their advancements into private cellular for enterprises and are on track to manifest their position within the value chain. This development is aided by a few cellular network trends playing into the hands of hyperscalers.

Telco networks are becoming more virtualized and software based, which will change requirements for the necessary supporting infrastructure. So far, telco CSPs have been operating proprietary telco cloud solutions, so the ability to offer cloud-native network functions inside containers makes public cloud infrastructure a viable, more cost-efficient alternative for delivering telco services, also using existing hyperscaler infrastructure.

From an enterprise point of view, the cloud is already emerging as an important place not only for telco network data, but also Operational Technology (OT)-related data. Companies like AWS, Google, and Microsoft will, therefore, become increasingly important enterprise partners from an OT angle, as a private network could use some of the already existing infrastructure resources.

Moreover, the overall amount of generated data will increase, as enterprises digitize their operations further. This, in turn, requires a network infrastructure that is robust enough and capable of processing large amounts of data concurrently. To ensure smooth enterprise operations in the wake of increasing data generation, edge computing will be an integral part of successful private network provision. Furthermore, public network infrastructure might be a more critical asset in this context. Many enterprises will require connectivity beyond their premises. While a range of new entrants try to provide this by partnering with satellite companies (Rakuten, for example, partnering with Ligado Networks), these partnerships have not yet generated noticeable market traction, relying on satellite costs significantly more than using terrestrial infrastructure.

Hyperscalers Are Unlikely to Provide Private Networks Directly to Enterprises


While hyperscalers certainly have emerged as potent players for providing private cellular networks, ABI Research expects channel partners to continue to play an important role, particularly when it comes to customizing offerings to meet specific enterprise requirements.

Google Cloud and Microsoft outspokenly rely on partners for system integration. Google has partnered with traditional System Integrators (SIs) like Betacom, and Kajeet to deliver this. Similarly, Microsoft leaves customization of system integration in the hands of other channel partners. By providing its Azure platforms to operators, the hyperscaler effectively hands any interaction with the implementing enterprise over to the CSP.

AWS does not expressly mention relying on partners, but ABI Research expects that the commercial reality will bring forward an indirect go-to-market strategy as the most successful commercially viable option. Enterprise environments are enormously complex, so each deployment will require a different level of customization. Implementing enterprises have limited networking technology expertise and are, therefore, looking toward a third party to take over any integration and customization work. At the same time, hyperscalers like AWS have no interest in diversifying too thinly and engaging in customizing their solution to every single deployment, as building up these capabilities would require significant investment in terms of both personnel and time. Therefore, the growing popularity of hyperscalers will also increase the importance and popularity of (vertically specialized) SIs for private network deployments.

Resulting from this, both implementing enterprises and private network technology suppliers should look for system integrator partners to create a go-to-market path that is as efficient as possible. Small and medium-sized SIs, in particular, will become interesting partners to look at, as they will be most receptive to the market access and increased visibility that hyperscalers have to offer. Large SIs like Accenture, Capgemini, or NTT, on the contrary, have their own private network offerings with dedicated go-to-market strategies in place already. As discussed in earlier ABI Insights, the window of opportunity for enterprise cellular is closing, which makes a fast time to market even more important.

To offer a guide through this partnership selection, ABI Research has ranked different global SIs and their private 5G offerings in a recent Competitive Assessment in terms of their innovation and implementation capabilities.