Hyperscalers Accelerate the 5G Edge

Microsoft ups the ante in cloud and 5G-enabled edge computing

While the world faces the ongoing Covid-19 pandemic, the pace of convergence in cloud computing, the network edge and 5G continues at pace, following several important announcements from Microsoft over the past week.

On 26 March, Microsoft announced it was acquiring Affirmed Networks, a leader in fully virtualized cloud-native mobile network solutions with a focus on 5G and edge computing. This week, the company built on this announcement by launching three new edge computing products in Azure, aimed at low-latency computing: Azure Edge Zones, Azure Edge Zones with Carrier and Azure Private Edge Zones.

Altogether, the moves represent a significant expansion of Microsoft’s hybrid cloud strategy and are one of the biggest statements yet by a hyperscale cloud provider on the opportunities for transformation in 5G and the telecom operator arenas. Let’s take a closer look at the news and discuss what it means for a rapidly converging and competitive cloud market.

Microsoft Buys into Operator Transformation

Founded in 2010, Affirmed Networks builds virtual networks for telecom operators to meet the growing demand for 5G technology by drawing on cloud-native infrastructure. The company’s main product, Affirmed UnityCloud, provides tools for managing wireless operator networks from the cloud, such as increasing and decreasing capacity on demand. The platform also offers network slicing capabilities, a flagship feature of 5G tech that lets providers set parameters for different kinds of traffic on their networks.

Affirmed Networks’ vision is to help operators orchestrate and run 5G networks, including 5G core technology and edge infrastructure, as software running in the cloud. This approach, often described as software-defined networking, differs significantly from the virtual machine or purpose-built hardware-based environments that many of the previous generations of wireless infrastructure run on. It allows operators to deploy and maintain 5G networks more efficiently and cost-effectively, using cost models based on operating expenditure, and at a greater scale than they are now.

The terms of the deal weren’t disclosed, but Affirmed Networks raised a total of $155 million before this acquisition, and counts more than 100 telecom operators globally as customers including AT&T, Orange and Vodafone. Many of them are already well into their journey to transform their core networks. For example, AT&T is targeting 75% of core network functions to be virtualized by the end of 2020.

What the Acquisition Means for Microsoft and the Cloud Market

Microsoft is essentially capturing the 5G opportunity from two sides. With Affirmed Networks, it’s positioning itself at the heart of the transformation of mobile networks, which are moving away from fixed-function hardware to a more agile and cloud-like architecture. Microsoft is also taking steps to ensure that Azure remains competitive as more processing and intelligence shifts to the edge of the network.

The deal is important for Microsoft and its cloud business. The company can now target operator networks as a major workload in Azure and enlist Affirmed Networks’ software to help pitch to mobile operators on deploying 5G core networks based on virtualized network functions in the Azure cloud. Microsoft will need to overcome challenges with trust among operators that may be fearful of its long-term intentions with the move and worried about handing over their network crown jewels to a single cloud provider. Additionally, other suppliers of the technology such as Nokia and Mavenir, which have been demonstrating their solutions on rival Amazon Web Services (AWS) for more than a year, will also be wary of Microsoft’s move.

Microsoft will naturally make the Affirmed Networks software stack part of the Azure family and morph the technology into a service tailored specifically for telecom operators in the future. It maintains that its focus is strictly on 5G core technology and that it has no desire to push into other areas of operator infrastructure such as the radio access network and billing, where it has several important partnerships with suppliers.

The Shift to Ultralow-Latency Edge Computing

Affirmed Networks compliments a significant investment Microsoft has made in hybrid cloud, edge computing and Internet of things (IoT) products over the past few years, including Azure Stack, Azure Stack HCI, Azure Stack Edge and its IoT solutions.

This week, Microsoft added to this family of solutions by launching in preview mode several new products designed for ultralow-latency computing. Azure Edge Zones and Azure Private Edge Zones are a set of services in Azure that enable the development and management of distributed applications on cloud, on-premises and edge environments including 5G using the same Azure Portal, APIs and security tools. The data ingestion and processing capabilities tap into Microsoft’s global cloud network and points of presence, and a variant of the product, Azure Edge Zones with Carriers, will connect Azure services directly to 5G networks in an operator’s data centre. Its operator services are based on Microsoft’s work with AT&T; in 2019, it announced the first public cloud to integrate 5G in Dallas in the US (see Microsoft and AT&T Team Up for Cloud, AI and 5G).

Microsoft is expected to deliver Azure Edge Zones to more than 10 cities over the next 12 months, starting with Los Angeles, Miami and New York this summer. The company has also announced the preview of Azure Private Edge Zones, a solution that creates a private 5G and LTE network on-premises. This combines with Azure Stack Edge to deliver a low-latency, high-bandwidth secure computing solution for enterprises, with a focus initially on uses in industrial IoT and robotics.

The new offerings are being delivered in conjunction with several operator partners around the globe including AT&T, NTT, Proximus, Rogers, Telefonica, Telstra and Vodafone Business. Their release is timely, as the Covid-19 pandemic has made it essential to have network bandwidth and availability for applications such as remote meetings, online shopping, gaming and smart infrastructure. Developers can continue to build and manage their applications using a consistent architecture and familiar tools in GitHub and Azure, while deploying their applications in a range of computing scenarios that consider location, performance, cost, user experience and security, for example.

Microsoft will need to work with its operator partners more closely to add network and carrier-specific APIs to the services. It should also build some foundational APIs of its own to enable cloud developers to become more educated about and make use of services such as location, quality of service, network slicing in their applications, among others. Microsoft must also add more tools that help developers understand the cost mechanics and trade-offs of managing distributed applications in the public cloud, in hybrid environments, at the edge and over 5G.

Raising the Bar in the Cloud Wars

But Microsoft isn’t the only hyperscaler beefing up its edge, 5G and operator offerings. At re:Invent 2019, AWS made big pushes in supplementing its mega data centre regions with smaller cloud data-processing and storage hubs in local regions as well as on customer premises with the general availability of AWS Outposts and the launch of AWS Local Zones (see Amazon’s AI Leadership Advanced at re:Invent 2019). It also launched AWS Wavelength, a similar service designed to allow developers to build applications with mobile edge computing for 5G mobile devices, through partnerships with KDDI, SK Telekom, Verizon and Vodafone.

Google Cloud has also made recent steps into the telecom market. In March it unveiled its Global Mobile Edge Strategy, along with Anthos for Telecom, a version of its container-based hybrid multicloud management platform optimized for operators.

These developments add up to reveal the significant changes happening in cloud computing. We have long predicted that cloud providers and telecom operators would become bedfellows as 5G arrives to bring commercial cloud services to the network edge for developers and enterprises. Operators need to adapt their networks to become more cloud-like, and need hyperscale cloud infrastructure to move closer to the network edge. Equally, hyperscalers need to expand operator partnerships to move data processing closer to the source.

But for 5G to meet the enormous hype and expectation surrounding it, operators must transform their networks to be more agile and woo cloud developers to create applications that are currently very thin on the ground. The jury is still out on when truly innovative, low-latency, high-throughput 5G-based applications will become widely available for enterprises, but these efforts certainly take the industry a step closer to this goal.

The Final Note: Microsoft Gets Some Much-Needed Operator DNA

Microsoft has upped the ante in the cloud wars, having made one of the biggest statements yet by a hyperscaler on the opportunities in 5G and operator transformation. Affirmed Networks gives Microsoft some much-needed “operator DNA” for a battle that’s not only being defined by the innovative solutions in edge computing available to customers, but also by having the best cloud optimized to help operators transform themselves in 5G.

Above all, the moves give Microsoft a host of deeper operator relationships to maximize the opportunity for its cloud. In this respect, the company gains both a product capability and a channel to market, enabling it to control its own destiny and shape architecturally the market for mobile edge computing. However, this raises questions about whether Microsoft will inevitably look to address the potential of radio access networks. Some of its partners will also rightly question its long-term intentions in this area, given that Microsoft has dipped its toes into the telecom space in the past with products like Microsoft Lync and Skype.

Microsoft’s main rivals, AWS and Google Cloud, which have been slightly earlier to make announcements in these areas, aren’t standing still either. As the pace of convergence accelerates in cloud computing, the network edge and 5G over the next few years, new opportunities will appear in high-availability and low-latency computing for remote meetings, gaming, industrial robotics, for example. You can be sure that AWS and Google Cloud will both fight back with similar capabilities for their own clouds in the near future.

The real winner in all this, of course, is 5G, whose promise has now taken a step closer to reality. It’s going to be fascinating to watch how the market reacts over the next 12 months.