“We recognize the impact of 5G, not just for service providers, but across all industries. It’s revolutionizing the way businesses and people interact – and the best is yet to come.”
- Honoré LaBourdette, Vice President, Global Partner EcoSystem Success
There’s a new benchmark for corporate performance – and only a fraction of global firms are achieving superior growth because they’re “future built.” That’s according to recent research[1] from Boston Consulting Group (BCG), whose data reveals that only 6% of worldwide enterprises surveyed have successfully embedded transformative technologies and are redefining corporate advantage. In fact, over the last five years, advanced or future built enterprises are responsible for $9.3 trillion (nearly 50%) of the S&P 1200 index’s value creation – and the growth gap is getting wider.
Tech-powered firms including telcos are blazing a trail thanks to the ability to harness constant innovation across 5G, artificial intelligence and cloud infrastructure. Furthermore, Gartner® predicts that by 2027 “Cloud computing will not only be a technological approach for delivering applications, but will also serve as the key driver of business innovation.”[2]
For the telco industry - heavily reliant on cloud - what does real enterprise advantage look like? And what does it take to be a future built service provider that embraces innovation and sustains long-term growth?
THE ADVANTAGES OF MOVING TO MULTI-CLOUD
The signs are clear: rapid adoption of cloud innovation is a must. But so is having a robust cloud strategy with long-term partners that understand an industry move to multi-cloud solutions. According to Pluralsight’s 2023 State of Cloud report,[3] 65% of worldwide organizations are now multi-cloud. Why? Simple: to keep up with customers’ changing demands. Like most tech-savvy customer bases, telco customers demand speed to market, flexibility, agility and seamless 5G enablement. This also means rapid identification of AI, ML and GenAI best use cases (to boost real time analytics, customer experience, network rollout) and increased cloud interoperability. In a 2023 Omdia survey (sector: communications providers), telco respondents project a choice of network solutions over the next five years: telco private cloud (49%), centralized public cloud (33%) and on-premise cloud (23%).[4] Red Hat, the world’s leading provider of open source technologies is also crystal clear: “The time of a single cloud for telco is over, and the need for maximum flexibility and workload portability is vital. The present and future of telco cloud is one that runs natively and efficiently in both multi-cloud and hybrid cloud environments.”[5] It’s a stance shared by other leading providers, as Red Hat’s Honoré LaBourdette, Vice President, Global Partner EcoSystem Success, reveals: “We recognize the impact of 5G, not just for service providers, but across all industries. 5G is revolutionizing the way businesses and people interact – and the best developments are yet to come.”
In June 2023, Red Hat announced a strategic partnership with Nokia to be the primary platform for Nokia’s Core Network applications. The move not only recognizes Red Hat’s best-in-class OpenShift and OpenStack products – but it also accelerates the customer transition to cloud-native, future-ready applications. Nokia’s Fran Heeran, Senior VP and General Manager, Core Networks’ Business, says: “As providers move towards continued expansion of opportunities with 5G including the Core Network, Open RAN and multi-access edge, they will require even greater flexibility and choice in where and how applications and services are deployed. This means flexibility, interoperability, and interchangeability across the ecosystem will be critical. Red Hat will assume responsibility for the ongoing evolution and provide full support to Nokia for the continuity of our cloud infrastructure business.”
As technology advances, and customers need to harness new opportunities, a major benefit of the Nokia and Red Hat partnership is flexibility.
FLEXIBILITY OPENS UP LIMITLESS POTENTIAL
Fact: enterprises achieving significant growth are increasingly moving to open-source solutions. According to International Data Corporation (IDC), as open source becomes the foundation for more applications, including generative AI-driven applications, it will be “increasingly difficult to retain restrictive positions of closed, proprietary software.”[6] The ideal scenario? Interoperability and end-to-end integrated solutions that create flexibility and simplicity across the cloud vendor ecosystem. TBR analysts Michael Soper and Jordan Fleming note that “The unification of Nokia and Red Hat offers customers a single common layer to run workloads on multiple cloud environments, including Amazon Web Services (AWS), Google Cloud, Microsoft Azure and private clouds. In theory, the partnership will result in delivering a horizontal, simplified cloud platform for customers.”[7] Omdia’s Inderpreet Kaur, Senior Analyst, Telco Cloud and Network Automation says, “With this deal, Nokia selected Red Hat’s Kubernetes-based CaaS platform, OpenShift, for delivering the vendor’s core network functions. OpenStack and OpenShift are already among the most deployed platforms to host telco IT and other enterprise workloads on a telco’s private cloud. Red Hat’s OpenShift allows the provisioning and management of OpenShift clusters across the public and private cloud through a single control plane.”[8]
Nokia’s Heeran says, “As we head towards further deployment of 5G, the evolution to advanced 5G and on to 6G, our customers stand to benefit [from our combined world-class solutions]. Our partnership is a reaction to the way the market is going – customers tell us they want openness. It’s a smart move and our competition is probably privately kicking itself it didn’t think of it before we did.”
FUTURE BUILT AND THE CUTTING EDGE
As the rapid pace of cloud innovation continues, so do the business opportunities: megatrends include the proliferation of self-service IT,[9] Machine Learning as a Service (MLaaS), and edge computing – predicted to grow from $15.96 billion in 2023 to $139.58 billion by 2030 (CAGR of over 36%).[10] Enterprises that generate and sustain long term growth are the ones able embrace ongoing change as edge computing grows.
Red Hat’s LaBourdette concludes: “An open hybrid cloud vision means customers can transform their network infrastructures and applications to be cloud native and future ready – this is vital as the industry accelerates towards edge.” The future is not only bright, but also open, flexible, simple, and hybrid – at least for those future-built enterprises redefining corporate performance.
[1] https://www.bcg.com/publications/2023/the-new-blueprint-for-corporate-performance
[2] Gartner, “The Future of Cloud Computing in 2027: From Technology to Business Innovation”, David Smith, Dennis Smith, 5 Oct 2022. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
[3] https://learn.pluralsight.com/resource/offers/2023/state-of-cloud
[4] Omdia, ‘Red Hat and Nokia come together to simplify telco cloud ambitions’, Inderpreet Kaur, 19 July 2023.
[5] https://www.redhat.com/en/topics/cloud-computing/what-is-telco-cloud
[6] IDC, “Nokia and Red Hat’s Alliance Enables Sharper Focus for Nokia and Comms SP Expansion Opportunities for Red Hat”, Document #lcUS51019423, July 2023.
[7] TBR, “Initial Response: Nokia, Second Quarter 2023”, Michael Soper and Jordan Fleming, July 2023.
[8] Omdia, ‘Red Hat and Nokia come together to simplify telco cloud ambitions’, Inderpreet Kaur, 19 July 2023.
[9] https://www.cio.com/article/649911/6-trends-fueling-the-rise-of-self-service-it.html
[10] https://www.fortunebusinessinsights.com/edge-computing-market-