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TBR releases exclusive webinar content from September 2021

Technology Business Research, Inc. (TBR) announces on-demand availability of its September 2021 webinars. September webinars featured best practices developing in the cloud space and how and why webscales are disrupting the telecom industry.

How ecosystems turn cloud technology into solutions

Principal Analyst Allan Krans and Senior Analyst Evan Woollacott discuss the evolving ecosystem among cloud platforms, independent software vendors (ISVs) and professional services firms as well as the role ISVs have in platform programs and how these programs are encouraging partner buy-in.

Webscales encroach on telecom sector to realize value of digital economy

Principal Analyst Chris Antlitz sheds light on the overarching growth strategy of webscales as well as why webscales need to disrupt the telecom industry and what this means for incumbent operators and vendors in the telecom sector.

TBR webinars are typically held Wednesdays at 1 p.m. EST and include a 15-minute Q&A following the main presentation. To find out what we are discussing next month, check out the Webinars page of our website.

Interested in a one-on-one discussion with one of the above subject-matter experts or a private webinar with one or more of our teams?

Contact us today for more information on our free 60-day trial

Webscales are simultaneously moving into multiple trillion-dollar industries, including telecom

Webscales need to enter and disrupt trillion-dollar industries to maintain growth trajectories and sustain stock valuations

Transportation (e.g., connected vehicles), logistics, financial services, healthcare, telecom and other sectors each represent at least a trillion dollars in economic value globally, and webscales are targeting each of these industries for disruption.

Webscales need to rapidly scale their presence in these industries to add billions of dollars in top-line revenue to their respective income statements each year to sustain their stock valuations.

Telecom is a unique market to disrupt because it represents around $2 trillion in current economic value and provides foundational infrastructure to drive disruptive initiatives across other industries. Intelligent connectivity transcends all industries in a digital economy and is the foundational medium for data transmission and the conveyance of cyber-physical exchange that fuels digital transformation. Moves by Microsoft to acquire Affirmed Networks and Metaswitch underscore the strategic imperative for webscales to disrupt the telecom sector.

Webscales will ensure the Fourth Industrial Revolution becomes a reality

The Big Nine webscales are investing over $300 billion annually collectively (R&D and capex), and this amount is growing rapidly, on world-changing endeavors, such as building virtual worlds, truly autonomous vehicles, conversational voice AI, quantum computers, and frictionless, intelligent and ubiquitous connectivity. These initiatives will push the rollout of ICT infrastructure at scale and get governments and businesses aligned to ensure they are digitally transforming.

Webscales are standardizing industrial digitalization to bring enterprises into their ecosystems, and over time the webscales will enhance and broaden the capabilities they offer to enterprises en route to full realization of Industry 4.0.

TBR believes the world’s largest webscales will likely own and control key platforms and ecosystems pertaining to the realization of Industry 4.0 and will garner an outsized portion of the value that is created from the digital economy.

The next major device category is AR/VR

AR/VR represents a relatively new, trillion-dollar market category that could eclipse the market impact smartphones have had on the global economy since the inception of the iPhone in 2007. Microsoft’s up to 10-year, $21.9 billion contract with the U.S. Army for HoloLens-based solutions exemplifies the potential of this market.

All of the Big Nine webscales are investing in AR and VR devices and/or applications as they aim to capitalize on this market.

As with the smartphone era, AR/VR will put enormous requirements on global networks as uptake of new devices occurs. Webscales are learning from prior issues and are actively exploring connectivity options to mitigate the high bandwidth/low latency requirements of AR/VR devices to ensure user experience is acceptable.

TBR has revamped its original Webscale ICT Market Landscape starting with the 1H21 publication. As part of this revamp, the report name has been changed to Webscale Digital Ecosystem Market Landscape. Though this report still covers the end-to-end digital ecosystem endeavors of the major webscales at a holistic level, the content of this report will focus on webscales’ disruption of the telecom industry. The 1H21 publication of the report specifically focuses on webscales’ disruption of the network intelligence-layer technologies domain. TBR’s next edition, expected to publish in January 2022, will focus on the connectivity infrastructure and connectivity business model disruption endeavors of the webscales and what this means for telcos and vendors.

Webscales aim to exploit the value created from the nexus of distributed computing and intelligent connectivity

Webscales aim to exploit the value created from the nexus of distributed computing and intelligent connectivity

TBR has revamped its original Webscale ICT Market Landscape starting with the 1H21 publication. As part of this revamp, the report name has been changed to Webscale Digital Ecosystem Market Landscape. Though this report still covers the end-to-end digital ecosystem endeavors of the major webscales at a holistic level, the content of this report will focus on webscales’ disruption of the telecom industry. The 1H21 publication of the report specifically focuses on webscales’ disruption of the network intelligence-layer technologies domain. TBR’s next edition, expected to publish in January 2022, will focus on the connectivity infrastructure and connectivity business model disruption endeavors of the webscales and what this means for telcos and vendors.

Webscales will capture the majority of economic value of telecom edge compute market

Webscales have various initiatives underway that will disrupt aspects of telcos’ business model, posing a direct threat to their connectivity businesses and ability to capitalize on new value created from 5G and edge computing. Webscales’ rapidly expanding presence in the edge compute space and keen focus on private cellular networks — particularly in the U.S. — are prime examples of this trend.

Though webscales are posturing like they want to partner with telcos on new opportunities, edge compute partnerships involving a webscale and telco to date are more exploitative than cooperative in nature. Arguably, the highest profile agreement to date is between Amazon Web Services (AWS) (Nasdaq: AMZN) and Verizon (NYSE: VZ), and while Verizon has touted the monetization opportunities, it is providing little more than site access and network connectivity, while AWS’ intelligent edge capabilities provide the bulk of the customer value. In this relationship, AWS doles out a cut of the revenue to Verizon while holding on to the customer relationship and most of the value that emanates from the use of its platform.

The end state of this competitive dynamic will see telcos capturing even less value as they increasingly offload towers and other sites to towercos and data center real estate investment trusts (REITs), and as webscales own greater portions of the network.

Webscales and data center players invest in India to capitalize on the nascent digitalization opportunity

India has become the epicenter of webscales’ focus and investment among emerging markets due to the country’s large population and growth prospects. Alphabet (Nasdaq: GOOGL), Amazon, Microsoft (Nasdaq: MSFT) and Facebook (Nasdaq: FB) are all investing billions of dollars in equity stakes, infrastructure build-out, applications and platforms customized to meet the needs of the Indian market, and setting up business model structures. Reliance Jio, Bharti Airtel and Vodafone Idea are partnering with these webscales on various projects to realize this digitalization opportunity in India.

TBR’s Telecom Edge Compute Market Landscape, which is global in scope, deep dives into the edge compute-related initiatives of stakeholders in the telecom market, including telecom operators, cable operators, webscales and vendors that supply the telecom market. The research includes key findings, market size, regional summary, technology trends, use cases, operator and vendor positioning and strategies, and acquisition and alliance strategies and opportunities.

Nascent trends in edge compute market should worry telcos as webscales disrupt incumbents’ business models

Key insights

Webscales will leverage their own infrastructure, platforms and ecosystems to disrupt vendors and relegate incumbent operators to providing site access and backhaul services.

Though webscales are posturing like they want to partner with telcos on new opportunities, edge compute partnerships between webscales and telcos to date are more exploitative than cooperative in nature.

The end state of this competitive dynamic will see telcos capturing even less value as they increasingly offload towers and other sites to towercos and data center REITs, and as webscales gain ownership of greater portions of the network.

TBR’s Telecom Edge Compute Market Landscape, which is global in scope, deep dives into the edge compute-related initiatives of stakeholders in the telecom market, including telecom operators, cable operators, webscales and vendors that supply the telecom market. The research includes key findings, market size, regional summary, technology trends, use cases, operator and vendor positioning and strategies, and acquisition and alliance strategies and opportunities.

Webscales will ultimately become more like competitors than partners to operators to capitalize on 5G-era opportunities

Webscales are not the telco’s friend

The Big Nine have various initiatives underway that will disrupt aspects of the telecom business model and pose a direct threat to operators’ existing connectivity businesses and their ability to capitalize on new value created from 5G.

Though webscales are posturing like they want to partner with telcos on new opportunities, they actually need to disrupt telcos’ core business (i.e., providing connectivity) to realize their digital ecosystem goals.

Webscales ultimately need to become more like competitors, rather than partners, of telcos because they need access to new types of data, and realizing their digital lifestyle goals will require them to take control over the network rather than be beholden to telcos. Both of these needs are satisfied by owning greater portions of the network.

Webscales already own significant portions of long-haul transport, cloud data centers, SD-WAN and communications platforms globally, and TBR believes the next step will be for webscales to take over the mobile core and the last mile of the network. This is already occurring in the enterprise network domain, but TBR expects webscales will increasingly delve into the consumer domain as spectrum is increasingly democratized and key technological advancements make it much easier, faster and cheaper to build and operate greenfield networks.

The webscale companies (hyperscalers or internet content providers) covered in TBR’s Webscale ICT Market Landscape invest in ICT and related digital infrastructure to drive their core businesses, which can include, but are not limited to, advertising, cloud services, e-commerce, financial services and media. In some cases, webscale companies will also invest in and provide telecommunications services, such as broadband access, to accelerate their digital businesses. This report focuses on the nine webscales (the Big Nine — Alibaba, Alphabet, Amazon, Apple, Baidu, Facebook, Microsoft, Rakuten, Tencent) that TBR believes will own the largest, most comprehensive end-to-end digital ecosystems in the digital era. Additionally, the report includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities.

The Big 9 will own and control the value chain in the digital era

The Big 9 will own and control the value chain in the digital era

Drivers and Investments

The Big Nine’s underlying goal is to provide a seamless, end-to-end digital experience to end users that will maximize webscales’ value capture in the digital era.

Webscales already own significant portions of long-haul transport, cloud data centers, SD-WAN and communications platforms globally, and TBR believes the next step will be for webscales to move into the mobile core and last mile of the network.

Webscales need access to network data, which they will obtain through partnerships with telcos or outright ownership of the network.

The webscale companies (hyperscalers or internet content providers) covered in TBR’s Webscale ICT Market Landscape invest in ICT and related digital infrastructure to drive their core businesses, which can include, but are not limited to, advertising, cloud services, e-commerce, financial services and media. In some cases, webscale companies will also invest in and provide telecommunications services, such as broadband access, to accelerate their digital businesses. This report focuses on the nine webscales (the Big Nine — Alibaba, Alphabet, Amazon, Apple, Baidu, Facebook, Microsoft, Rakuten, Tencent) that TBR believes will own the largest, most comprehensive end-to-end digital ecosystems in the digital era. Additionally, the report includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities.

Edge computing is a cross-industry revolution that will reshape every industry

The edge computing market spans a spectrum of use cases that meet various customer needs, including sensitivity for latency and analytics. According to TBR’s 1Q20 Enterprise Edge Compute Market Landscape, while the edge is not new, its use for low-latency-dependent applications and close-to-the-data computing has increased and will continue to do so to support connected devices, emerging workloads such as IoT, and faster time-to-insight. For example, in-store robots can interact with customers to create a customized shopping experience on the floor and use data around purchases to help restock inventory.

TBR predicts a rapid increase in enterprise edge spend through 2024. The dynamics within the webscale space   include a desire by managed service providers to run their offerings on bare metal hardware and ODMs with the ability to provide this bare metal hardware at lower price points than OEM peers. These dynamics will be a key driver behind the upswing in enterprise edge revenue through 2024 as webscales capture opportunities typically fulfilled by OEMs.

Nearly all webscales and some telcos utilize ODM hardware, and most enterprises are expected to use OEM gear for their edge environments

ODMs have perhaps the largest opportunity at the enterprise edge. White-box hardware is of rising interest to major service providers, and the low-margin, high-volume play that ODMs embrace is an excellent fit for the enterprise edge market.

ICT hardware continuum graphic

TBR’s Enterprise Edge Compute Market Landscape, which is global in scope, details edge compute trends among vendors and their customers. Vendor coverage includes Amazon Web Services, Atos, Cisco, Dell Technologies, Digital Realty, Equinix, Hewlett Packard Enterprise, Huawei, IBM, Lenovo and Microsoft. This research includes current-year market sizing and a five-year forecast. Interested in hearing more of TBR’s analysis on the emerging and rapidly evolving opportunity in the enterprise edge market? Check out the replay of our recent webinar, The emerging and evolving landscape of enterprise edge computing.

Leading CSPs and webscales implement new ICT architecture to fully capitalize on digital era

Insights from TBR’s 2020 Telecom Predictions

Key technologies, most notably cloud, virtualization, 5G, edge computing, AI and machine learning (ML), are coalescing to usher in a new era, commonly referred to as the digital era, but also referred to as the 5G era or the fourth industrial revolution (Industry 4.0). It is widely expected that during this era, industries will be fundamentally transformed, people’s lives will be greatly enhanced, and productivity will enter a new phase of sustained growth, all of which will contribute to an economic boom and improved standard of living. Communication service providers (CSPs) have a golden opportunity to play a critical role in the digital era by providing not only ubiquitous, intelligent connectivity but also value-added services that participate in and enable this economic development.

TBR’s research suggests 2020 will be a springboard year for the telecom industry’s development of the new architecture, with spend in the key markets of 5G, network virtualization and edge computing poised to ramp up significantly through the middle of the next decade. TBR also anticipates that systems integrators will play a much broader and key role in helping CSPs transform their businesses and networks and that webscales will increasingly encroach on CSP turf as they concurrently pursue new value created from the aforementioned technologies.

Join Principal Analyst Chris Antlitz on Feb. 12 as he provides leading-edge analysis on where the telecom industry is heading and how the digital era will impact stakeholders in the telecom ecosystem.

Don’t miss topics including:

  • Why webscales are building out the edge
  • How the open RAN and vRAN markets are developing
  • Why systems integrators will play a key role in CSP transformations

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].