Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      China’s car factories run cold as price war masks deep overcapacity

      19 June 2025

      Yellow Card, Visa in deal to hasten stablecoin uptake in Africa

      19 June 2025

      Jaltech backs solar firm Wetility in R500-million capital raise

      18 June 2025

      MTN CEO edges Vodacom rival in pay stakes – but just barely

      18 June 2025

      Stolen phone? Samsung now buys you an hour to lock it down

      18 June 2025
    • World

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025

      Yahoo tries to make its mail service relevant again

      13 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » In-depth » Cloud giants live on the edge, and telcos should tremble

    Cloud giants live on the edge, and telcos should tremble

    By Agency Staff21 June 2019
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    5G networks will allow vast gobs of data to be transmitted at great speeds. And more data usually means more money for mobile carriers like Deutsche Telekom and AT&T. But there’s a hitch. Cloud giants such as Amazon.com, Alphabet and Microsoft are lurking.

    The new tech enables ever more computational decision-making to be carried out by powerful processors sitting in the cloud. But when even a few milliseconds of lag can be a problem — as might be the case with high-frequency trading or connected factories — it’s worth trying to slash the time it takes to reach a cloud server.

    That’s why the cloud giants are pushing what’s known as edge computing: where cloud functions run on servers that are physically closer to the end user, thereby cutting the distance to a computer making a given decision. They’re at the “edge” of the network. It’s a feature of the distributed cloud, where different functions are distributed across different parts of a network.

    The main cloud providers have a head-start when it comes to exploiting these opportunities

    For telecoms firms that could be a problem. They’re terrified of spending hundreds of billions of dollars on upgrading their networks, only to become the providers of dumb pipes exploited by technology behemoths, and miss the most profitable opportunities the investments could generate. They don’t want a repeat of WhatsApp, whose free messaging platform gobbled up carriers’ SMS revenues.

    The main cloud providers — Amazon Web Services, Microsoft Azure, Google Cloud and Alibaba Group — have a head-start when it comes to exploiting these opportunities. They have huge customer bases and developer ecosystems, in addition to their existing hordes of servers. In short, they have scale.

    It would therefore be foolish for a telco to try to build a cloud offering to rival that scale, according to Nick McQuire, head of enterprise research at CCS Insight. They seem to recognise this, and are instead trying to ensure they’re the gatekeepers for their customers’ relationships with the cloud operators. Unfortunately for the network firms, the lock they have on those relationships can be tenuous.

    An opportunity

    There are different ways carriers can try to control them. Just this month, Spain’s Telefonica announced it would sell Google Cloud solutions globally. Alone, that’s unlikely to generate much profit. But by inserting themselves into the transaction, they hope to be in prime position to offer additional lucrative services that run on a third party’s cloud. And when it comes to small- and medium-sized enterprises, network firms’ extensive local teams can offer comprehensive solutions. It’s less scaleable than what the cloud operators do, but it’s still an opportunity.

    Others such as France’s Orange think that owning the cybersecurity layer is the best way to manage the process. That encryption key ensures they control enterprise customers’ cloud access, also making it easier to sell value-added services.

    Both approaches are a gamble. Cloud providers have their own cybersecurity solutions, for one. Convincing customers that a carrier can do it better might be tough.

    Increasingly, the operators have little choice. The likes of Amazon and Google are proactive in creating demand for their products. Their customers then turn to their telecoms providers and request the cloud giants’ services. That all but forces them to play along.

    Consider Google’s new Netflix for games, Stadia. For a subscription fee, starting in November users can access a bevy of titles running on cloud servers rather than their own computers. They’ll be able to play on a computer more than twice as powerful as Sony ’s PlayStation 4 console using just a cellphone, which becomes little more than a screen and a controller. And since the data is never exposed to the public internet, carriers’ importance is diminished.

    A carrier who can boast about Stadia’s performance on its network might use it as a tool to win customers. The best gaming experience will have no perceptible lag, so the closer Stadia’s servers are to the user, the better.

    The race to the edge really does risk turning the network operators into providers of dumb pipes

    Amazon and Microsoft’s gambits, which are called AWS Outposts and Azure Stack respectively, have similar placement goals. While not yet widely available, they comprise server boxes which sit on customers’ premises — factories, oil rigs or offices — and provide a hybrid of local and cloud computing.

    The race to the edge really does risk turning the network operators into providers of dumb pipes: enterprise customers’ data enter the network via AWS Outpost at one end, and travel to and from centralised servers without being exposed to the public Internet, remaining on a private network. It raises carriers’ risk of disintermediation — that they get all but shut out of the most lucrative parts of the cloud business.

    Stadia is unlikely to eat the world any time soon, and Google is behind rivals Azure and AWS in many enterprise applications, which is where the real money lies. We’re in the very early days of this struggle.

    But edge computing could turn into something of a Trojan horse for other cloud services. Carriers have a real challenge on their hands.  — Reported by Alex Webb, (c) 2019 Bloomberg LP



    Amazon Google Microsoft top
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleSpectrum policy direction within 30 days: Ramaphosa
    Next Article EOH strengthens board with new hires

    Related Posts

    Stolen phone? Samsung now buys you an hour to lock it down

    18 June 2025

    Major rift opens between Microsoft and OpenAI

    17 June 2025

    Meta bets $72-billion on AI – and investors love it

    17 June 2025
    Company News

    Disrupt first, ask questions later – the uncomfortable truth about incident response

    18 June 2025

    Sage brings together HR leaders to explore the future of payroll and people management

    18 June 2025

    Altron: a brand journey, a birthday celebration and a bet on Joburg’s future

    17 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.