The Public Cloud and Telcos - Reinventing Communications together: Sameer Vuyyuru, Amazon Web Services

The cloud does not exist without the connectivity that telcos provide. Telcos should benefit from revenue growth, better capital structure, and better profitability from the investments that they're making.

During the recently concluded Voice&Data Telecom Leadership Forum 5G conference, held in New Delhi on September 13, 2022, Sameer Vuyyuru, Head of WW Business Development for Communication Service Providers, Amazon Web Services (AWS), gave an industry keynote talk on public cloud.

From Telco to Tech-Co

Based on his experience, Mr Vuyyuru shared his observations, trends in telco, how cloud evolved, and most importantly, how AWS and telcos can work together. “There's a financial issue we have to solve, which is revenue growth, and capital for investment. That's where we think we can play a role. There is cost reduction. One of the biggest asks of every board member, every C level, every VP at our telcos is, help us move from a Telco to a Tech-Co,” he said.

“My role, basically, is very simple. I serve the telco customers of Amazon Web Services worldwide. My job is to go sit in front of the thought leaders at the telcos, shut up and listen. Then execute quickly on the needs of our telco customers. The big privilege of my role is I get to see across 1500 telcos worldwide, what's working, what's not working.”

Getting into figures, Mr Vuyyuru said that when AWS deploys into an enterprise, the total connectivity value of that enterprise workload is between 5-10%. This is the value that telcos- for all their investment – are capturing from the industry today.

Public Cloud and sustainability

“Our role at AWS is to help telcos capture 20, 30, 40, up to 100%. 5G is happening. But one of the things to consider is, how are telcos going to address these B2B companies? Mr Vuyyuru went onto to emphasise that b2b businesses are already on the cloud. “Your customers are already on the cloud, already using hyper scaler tools. But the procurement process of connectivity, is abysmal, it takes months. Our enterprise customers want to click a button and get connected in seconds.”

Why do we need to go through tenders for enterprises or governments? Why isn't the network as consumable as compute has been, as storage has been, as databases have been, as analytics have been? Why aren't we billing the network in one-cent increments to the enterprise customers?, he asked. “There is growing demand from private networks across the world, but that is being led by fixed wireless, and what we recently have observed is that sustainability issues are moving to the top of the agenda. Anecdotally, we were working with an operator in another continent. And they see their electricity bill, their energy bill skyrocket from 50 million to over 300 million in the space of six months. That's just not sustainable.”

Cloud Proximity

What has the cloud done? The cloud has gotten close to the business, to the developers and to the end users. If you're watching Netflix or Prime Video on your phone, the end user is using the cloud, the developers are developing on the cloud, the businesses are running their applications on the cloud. “So the constant refrain from our enterprise customers to us is get me to the cloud as quickly, cheaply and programmatically as possible. I want to go on a portal and I want to buy connectivity. Security first. Faster, scalable, and more predictable. That is all cloud,” he said.

AWS is now going to market together with telcos with industry-specific bundles. “We go to market now with telcos and I'll show you a few use cases where we bundle the connectivity in. We talked about the carbon intelligent network. I'll show you figures of how much savings in both energy cost, and carbon cost we are able to achieve by moving to the public cloud.”

 “We are starting to see those truly cloud-native companies start serving through a marketplace where you enter your user ID and password as the enterprise and you start consuming SAS as and when you need it. With that one cent increment that they're talking about.”

Cloud Native Challenges

But to be cloud native has its challenges. The network equipment providers’ (NEPS) modernization is very slow. Price is another litmus test. “If anyone comes and says we are truly cloud-native, ask them how big their container is. If it's more than a few kilobytes, it's not cloud-native,” he said.

“We're frequently asked to do TCO on single use case, single workload, single piece of infrastructure deployments. But that misses the point of the cloud. The point of the cloud is that it's not single use case. It is not a single piece of infrastructure. It is every single use case you have running at different times or concurrently on the same piece of infrastructure. The other one is security control and privacy perceptions are not always understood. We've publicly announced that the National Security Agency of the United States is using AWS cloud. MI5, MI6 are on AWS public cloud. They know what they're doing. So I think there's a little bit of fear of the unknown about the public cloud, but we have gone through the rigmarole of really critical industries, National, Defense Industries, national security industries, moving to the public cloud. And we've worked with many telcos to do the same. It's a question of understanding what the actual requirements are. Those are the challenges.”

So where is AWS investing? “Our number one investment is going to market together with telcos,” Mr  Vuyyuru said, “The cloud does not really exist without the connectivity that telcos provide. Telcos should benefit from revenue growth, from better capital structure, and better profitability from the investments that they're making. Everything that we do is driven by how we drive revenue for the telcos because if they win, we win. If they are hampered in any way, we do not grow.”

“We really double down on AI/ Ml capabilities in the telco domain. The kind of data that we're bringing to bear, is very non-traditional. The BSS OSS, enterprise IT innovation, working with visionaries and even the established companies who are starting to really come on board. We believe, fundamentally, that the networks should run and run best on a public cloud, specifically AWS. We are building specific services and specific infrastructure. When we talk about the capital investment needed to build a new network, we invest on your behalf. The question I'd like as take away is, why do you need to invest a single dollar in CAPEX? I know that's a bit of an extreme, but I'm stretching a point to make a point. Why not experiment on the public cloud today? See how it performs. Challenge us. And let us invest. That's our whole business model.”

Revenue Growth and Public Cloud

On the revenue growth side, AWS has publicly announced more than $3 billion worth of investment in partnering with telcos across the board. When talking about the different things AWS has done together with telcos worldwide, Mr Vuyyuru said, “Let's start with the consumer, and what you can do today. A lot of telcos today are monetizing Amazon subscriptions. It is built through the telco. It is an ARPU uplift that you can get today. AWS has become the third largest advertising company in the world after the unnamed ones, Google and META, and growing really fast. And I'll tell you why that's important to the telco industry. Unified Communications as a service. This has historically been an over-the-top quality of service issue that we believe we've solved with a few telcos, gaming's been talked about on the b2b side; transport services. If you want to expand into a region where you do not have a pop. You create a virtual pop on AWS. You can do it in five minutes. Instead of going to the national carrier in another country, negotiating terms with that business team, and taking six months to do that, Take six minutes, and create a virtual pop. India is the largest contact center market in the world. You should be all over that, partnering with us. And addressing that with an AI-enabled as a service contact center. IoT API platforms, so on and so forth.”

When talking about Edge, Mr Vuyyuru said that AWS was heavily investing in it. “We invest for the future, we invest in it with a decade longer or higher time zone. And we're really starting to see a lot of traction in CD ends. In TV modernization, as they move from historical cram-based transmission to over-the-top transmission, smart home platforms, where we are vendor agnostic, our platforms run our competitor's devices as well. So you're not locked into a single ecosystem.” He said that Edge, B2B, and private networks rightfully get a lot of press being growth vectors. “We're starting to see SD-WAN as a service. Getting rid of all of the boxes out there, all the head ends, all of the CPE's and just making it a virtual connection. And the computer vision side is absolutely skyrocketing for us. Wireless-enabled cameras, that you can sprinkle around any city any venue, and they auto provision onto your network and you start billing immediately. These are just a few samples of what we're able to do. And have been doing with telcos worldwide, and would love to do here in India as well,” he said. “The underappreciated part of the p&l in a telco when you do the analysis of where the costs are, 30 to 40% of the costs are actually in customer acquisition, retention service. Churn is a big cost at the end of the day. How you actually, intelligently use data to better your cost of customer acquisition and increase customer retention, is low-hanging fruit today. We've been working with companies such as telehealth, T Mobile, and many others that we will announce in the coming months to fundamentally transform that connected customer journey. But that requires data. You have incredible data on your consumers. We've got to figure out how to use it.”