The merger of telecom operators and cloud giants is underway. The latest example is striking. On Monday, the British giant Vodafone announced a considerable extension of its partnership with Google Cloud, the subsidiary of the Mountain View group in charge of the rental of storage and remote computing capacities.
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 an infrastructure hosting all of the operator’s data, in the twenty or so countries where it is present, and analyzing this precious information.
The gigantic warehouse, called “Nucleus”, will be able to process 50 terabytes per day, or the equivalent of 25,000 hours of high definition video, according to the statement from the two groups.
The platform will also embed a system called “Dynamo” to circulate data more quickly – and in a secure manner thanks to encryption and anonymization – throughout Vodafone’s network. This functionality should enable the operator to offer new, personalized services to its general public or professional customers, such as a one-off speed-up of speeds.
The first interest for Vodafone is to reduce its operational costs, while gaining in efficiency. For example, the operator will be able to run machine learning algorithms to predict and solve network problems before they affect its customers. It will also set up a “digital twin” of all its infrastructures to optimize their operation. Finally, the entire internal SAP environment will switch to Google servers.
Vodafone has not quantified the expected gains. But since his arrival at the head of the operator in 2018, Nick Read wants to save money – through the sale of assets such as telecom towers, but also digitization – to reduce the group’s enormous debt. The objective is to reduce operational costs by 1.2 billion euros per year.
Flirt between Gafa and telecoms
The merger also aims to open up new markets. Vodafone and Google do not hide, for example, that they would like to provide assistance services to governments in the fight against the pandemic, thanks to the anonymized data of the operator analyzed by Google algorithms. By taking the turn early enough, the two partners even 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 the two worlds – operators and Gafa – each of which understands its interest: telecoms have mountains of data coming from their infrastructures or from the uses of their customers; the US cloud giants have the analytics capabilities.
In recent months, Amazon, Microsoft and Google have also flirted openly with the large operators – who to provide them with servers, integrate local data centers as part of 5G, or purely and simply host all the IT networks. mobile, as the American Dish has just done with AWS.
Google, which despite its cloud business revenue up 43% in the last quarter, to $ 4 billion, remains well behind Amazon and Microsoft – is not the last to bet on partnerships with telecoms. By doing business with the second largest operator in the world, he scores a solid point.