Cloudification of Telecom Technologies and Equipment

Price: Starting at USD 3,000
Publish Date: 15 Mar 2022
Code: AN-5279
Research Type: Research Report
Pages: 30
Cloudification of Telecom Technologies and Equipment
RELATED SERVICE: 5G & 6G Cloud-Native Systems
Actionable Benefits

Actionable Benefits

  • Identify key challenges and opportunities that result from the convergence of telephony and Internet (cloud) architectures.
  • Understand commercial and economic specifics that are associated with CAPEX and OPEX models.
  • Develop a deeper understanding of the challenges that cloudification of telecom technology raises particularly for system integration services.
Critical Questions Answered

Critical Questions Answered

  • Why is there an important requirement for telecoms industry to complement its CAPEX-centric models with OPEX-centric commercial models?
  • What are some of the key attributes and economic features of cloud and software?
  • What new capabilities and monetization models do Network Equipment Vendors need to succeed in a 5G world?
  • What are some fundamental commercial differences between manufacturing and selling network equipment and selling software?
  • How do the dynamics of technology ownership, control and ability to integrate change with ongoing cloudification of telco technologies and equipment?
Research Highlights

Research Highlights

  • Analysis of CAPEX commercial arrangements versus OPEX purchase pattern.
  • An overview of software and service economics and the impact that they will have on the existing model of telecom equipment manufacturing.
  • Analysis of how telecom suppliers can go about pricing - and designing commercial models - for equipment and services?
  • Analysis of how a services-led model stands to unlock new value in the telecoms industry.
  • An overview of four deep technological trends and how they are disrupting the modus operandi in telecoms.
  • An overview of the implications that come for the industry from the departure of ‘technology ownership that CSPs purchase’ to ‘technology access that CSPs subscribe to’.
Who Should Read This?

Who Should Read This?

  • Technologist and key decision makers for cloud and software commercial strategies.
  • Innovation leaders and Strategy Executives who need to understand how cloud impact existing commercial models in telecoms.
  • C-level executives who need to understand the fundamental differences between the manufacturing model and services.

Table of Contents




3.1. Convergence of Telephony and Internet Architectures
3.2. Existing Monetization Models


4.1. CAPEX Commercial Models
4.2. CAPEX Purchase Pattern


5.1. Economic Features of Cloud Software
5.2. OPEX Commercial Models
5.3. OPEX Purchase Pattern


6.1. Value-Based Engagements
6.2. Equipment Economics versus Service Ecomonics
6.3. System Integration Services
6.4. A Services-Led Model


7.1. Deep Technological Trends
7.2. Control and Integration
7.3. Understand and Manage Risk
7.4. Service Convergence



9.1. Network Equipment Vendors
9.2. Hyperscaler Profiles

Learn More About Cloudification of Telecom Technologies and Equipment

What Does Telecom Cloudification Mean?

In telecom, cloudification refers to the process of transitioning to new business models in which cloud-based software is the name of the game. Virtual networks replace physical ones in the cloudification process, providing greater flexibility and scalability for telcos and customers alike. In the age of 5G and cloud dominance in the telecom industry, operators must focus more on being enterprise, government, and industry services-led than past generations. To be more specific, it’s expected that CSPs will branch off from standardized products and deliver application and industry-specific services.

Going forward, CSPs will have to allocate the time and resources to profoundly understand how revenue and profitability are generated in enterprise verticals. Only then can product planning and design be handled in a way that aligns with desired business outcomes.

Building Blocks of 5G Cloudification

Cloudification requires CSPs to either build their own private cloud platform or leverage existing public cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, to name a few. And there’s also the option to use a hybrid approach. In some cases, network providers will start out using the public cloud while developing their own cloud infrastructure, and before eventually migrating to the in-house solution. Interoperability is a crucial point to stress when it comes to cloud platforms, as multi-vendor solutions are a preferred option.

Some of the key ingredients to a telco cloud are Network Functions Virtualization (NFV), Software Defined Network (SDN), automation, and Artificial Intelligence (AI). One of the key benefits of this new software-centric ecosystem is that hardware is phased out in favor of virtual machines. As a result, service providers no longer need to purchase expensive hardware or take the time to install new devices. Plus, a virtualized network enables operators to make modifications or add new services on-demand because additional hardware is not required.

Changes in Store for Vendors Too

As telcos work on cloudifying, they will seek out Network Equipment Vendors (NEVs) that take full ownership of the technology, from building applications and defining architectures to managing some of their workloads. Now, with the cloudification of telecom equipment, NEVs need to look at the commercial model in terms of dematerialization. In other words, NEVs should view their inventory less in terms of a limited supply of tangible products to a software approach in which supply is no concern and recurring revenue becomes a mainstay.

Finally, as CSPs have a steep learning curve in cloudifying their operations, there’s also an excellent opportunity for vendors and System Integrators (Sis) to provide consulting services. For example, Nokia Cloud Transformation Consulting guides CSPs through the process of migrating to the cloud by laying out a cloud technology strategy, helping mitigate risks, choosing the best cloud option (public, private, hybrid), deciding to use either an engineered approach or best-of-breed approach, ensuring security compliance, and more.