The merger of telecom operators and cloud giants is going on. The fresh example is striking. On Monday, British giant Vodafone announced the considerable expansion of its partnership with Google Cloud, a subsidiary of the Mountain View group in charge of renting storage and remote computing capacity.
Under this new six-year agreement, 1,000 employees from both groups will be mobilized in the United Kingdom, Spain and the United States. They will manage the infrastructure hosting all of the operator’s data, in twenty or so countries where it exists, and analyzing this precious information.
According to the statement of the two groups, the giant warehouse, called “Nucleus”, will be able to process 50 terabytes per day or the equivalent of 25,000 hours of high-definition video.
The platform will also embed a system called “Dynamo” to transmit data more quickly – and in a secure way for encryption and anonymization – to Vodafone’s network. This functionality should enable operators to offer new, personalized services to their general public or professional customers, such as one-off speeds.
The first interest for Vodafone is to reduce its operating costs while increasing efficiency. For example, the operator will be able to run machine learning algorithms to predict and solve network problems before they affect their customers. It will also install a “digital twin” of all its infrastructure to optimize its operation. Finally, the entire internal SAP environment will change to Google Server.
Vodafone has not determined the expected profit. But since the arrival of the head of the operator in 2018, Nick Reid has wanted to save money through the sale of assets such as telecom towers – but also digitization – to reduce the group’s huge debt. It aims to reduce operating costs by 1.2 billion euros per year.
Flirt between gafa and telecom
The merger also aims to open new markets. For example, Vodafone and Google do not hide, that they would like to provide support services to governments in the fight against the epidemic, thanks to the anonymous data of the operator analyzed by the Google algorithm. By completing this turn quickly, both partners also hope that their collaboration will serve as an example and that they will be able to sell consulting services to international organizations or companies.
This partnership is symptomatic of a merger of two worlds – operators and gafas – each of which realizes its interest: telecommunications have mountains of data that come from their infrastructure or the use of their customers; The American cloud giants have analytics capabilities.
In recent months, Amazon, Microsoft and Google have openly flirted with large operators – providing them with servers, integrating local data centers as part of 5G, or purely and all IT hosts the network. Mobile, as American Dish. Just done with AWS.
Google, which, despite a 43% increase in revenue of its cloud business from $ 4 billion in the previous quarter, is still far behind Amazon and Microsoft – is not the last to place bets on partnerships with telecommunications. By trading with the world’s second largest operator, he scores a solid point.