Cloud-Network Convergence Unlocks Intelligent Digital Transformation for Carriers

As 5G penetration increases, so is enterprises' understanding of cloud migration and why it’s important.

Carriers are transforming from telecoms providers to intelligent, integrated information service providers. To do so, they’re leveraging their resources and existing advantages to build technical advantages in cloud-network convergence, including building infrastructure and developing services. This is not only the key to high-quality development of industries, but also the only path for carriers to achieve intelligent digital transformation themselves in the 5G era.

New network challenges from digital operations

The global cloud computing industry has witnessed many innovations in recent years. In China, cloud computing applications are being widely adopted, with more enterprises understanding the capabilities of cloud migration and using cloud to deploy information systems.

A survey of more than 1,000 enterprises revealed that they believe cloud-network integration services are among the most important services. Enterprises require cloud-network portfolios to be one-stop, self-service platforms, private line services that can go live within 1 to 2 days, and cloud and private line resources that can be flexibly adjusted according to service changes.

The cloud and network are the key elements in new information infrastructure, coexisting and complementing each other. Cloud-network convergence is the core driver and essence of this new infrastructure, and thus an inevitable choice for its development. It’s also the result of in-depth network architecture transformation driven by business needs and technological innovation. From a macro perspective, the development of cloud computing services requires strong network capabilities where the optimization of network resources is powered by cloud computing.

As enterprises migrate to the cloud, their network requirements are changing. Quality communication needs to be maintained between the different branches of a company after cloud migration. A network that merely ensures large bandwidth and low latency is insufficient for the complex requirements of cloud migration, which involves multiple systems, multiple scenarios, and multiple services.

From a technical perspective, cloud computing is a new type of IT service resource for which networks can provide intelligent and flexible connections. The key to cloud-network convergence is to converge the basic resource layers of the cloud and networks. A new type of simple, agile, open, convergent, secure, and intelligent information infrastructure can be built through virtualized or cloud-based integrated technical architecture.

As cloud computing services continue to be deployed, network infrastructure doesn't need to just adapt to cloud-network convergence requirements, network structures must also be optimized to ensure network flexibility, intelligence, and O&M.

For carriers, private lines for enterprise cloud migration are a new driving force for business growth alongside conventional private lines for enterprise interconnectivity. Therefore, cloud-network convergence will present opportunities while accelerating intelligent digital transformation.

The key to intelligent digital transformation

Communications networks traditionally support B2C services such as voice calls, SMS, and data traffic. However, Internet companies and other organizations are creating new requirements for communications networks, including Network as a Service (NaaS).

Traditional networks focused on construction and O&M, but today's network products and services require more innovation. 5G and information infrastructure are accompanied by cloud-network convergence, enabling greater interconnectivity between everything.

There are two possible tracks of cloud-network convergence. If the cloud is at the core, cloud computing needs to be supported by strong network capabilities to realize interconnectivity between clouds. If networks are at the core, the cloud and networks need to be mutually supported. 

Carriers’ conventional business is unfortunately declining. The competition in the telecom industry's installed base market remains fierce, as user size and revenue growth reach their limits. However, cloud computing has been widely used in many verticals such as government services, finance, industry, transportation, and logistics. The combination of 5G and cloud computing will better support vertical applications.

These changes create new opportunities for carriers. Telecom carriers have valuable spectrum, number, and access resources fueled by huge user bases and complete, reliable user information. Their nationwide networks and large numbers of IDCs consolidate bandwidth, computing, and storage resources.

The three major carriers in China are implementing cloud-network convergence with the aim of overcoming conflicts between standardization, personalization, and customization. The access capabilities with 5G broadband, low latency, and wide connectivity meet requirements for flexibly configuring different applications in various industries.

China Telecom's approach to promoting cloud-network convergence involves networks as the foundation and cloud as the core, where networks are adapted to and  integrated with cloud. The aim is to achieve intelligent connectivity, intelligent computing, digital platforms, and security by design.

In February 2021, the construction of China Telecom's Beijing-Tianjin-Hebei Big Data Base began and in March, the operator launched its 5G Cloud Computing Center in the Guangdong-Hong Kong-Macao Greater Bay Area. China Telecom will also build the Beijing and Guizhou information parks, as well as data center parks in nine provinces, covering 884,000 square meters with an investment of 4.5 billion yuan (US$705 million). 

To build private networks that integrate cloud, network, and edge for the B2B market through restructuring cloud-network architecture, China Mobile has proposed a cloud-network convergence strategy comprising one cloud, one network, and integrated services. This will be achieved with the N+31+X plan. "N" refers to building N central resource pools to meet requirements for standardized networks across the country. "31" refers to unifying standards in 31 provincial-level divisions to meet local user requirements. China Mobile also aims to achieve 100% cloud service coverage by building multiple provincial-level resource pools. "X" refers to flexibly deploying X edge clouds on-demand in more than 300 cities. China Mobile also plans to build eight 5G SA network clouds to take full advantage of cloud-network integration. 

The carrier aims to converge cloud and network IT systems to form a centralized, digital, intelligent, and refined O&M system that runs through the cloud, edge, networks, and devices.

In 2018, China Unicom launched seven major cloud-network products: DCI & CloudBond, Cloud Networking, Cloud Shield, Smart Video Network, and Quality Financial Network. The company aims to build a new, converged cloud-network ecosystem by deploying cloud resources near users across industries. China Unicom has worked with mainstream cloud service providers to build an online cloud-network self-service platform for governments and enterprise customers: the DCI & CloudBond system.

Although China is leading the world in 5G deployment, players across the industry value chain still have much work to do in terms of device, network, industry, and services. Cloud-network convergence is the most important form of digital service for carriers. With this integration, carriers will be able to provide smarter services by harnessing cloud, edge, and computing power on devices transformed from relatively independent clouds and networks. Computing and networks will be deeply integrated, and carriers can use their networks to become computing intermediaries for society.

However, a huge gap still exists between carriers' traditional networks and customers' requirements for network security, flexible adaptation capability, and network intelligence. Carriers must enhance built-in network security, flexible adaptation based on service needs, the flexible scaling of network intelligence, and network programmability. This requires continuous, deep integration of communications technologies and application scenarios.

Cloud-network convergence creates new value for industries

Led by changing demand, China has entered a critical stage of network-cloud convergence.

China possesses unique advantages in developing computing plus networks systems. First, it is a world leader in building and deploying large-scale network infrastructure and Internet services. Network technologies like SD-WAN have been deployed in and greatly impacted fields such as finance, retail, manufacturing, Internet, media, government, healthcare, energy, and electric power. 

The healthcare industry must address challenges such as low informatization, low efficiency, and lack of hierarchical diagnosis and treatment systems during its digital transformation. The medical cloud plus medical alliance is a good solution to slow informatization and unevenly distributed medical resources. Huawei has worked with carriers to build slice-based private networks for healthcare. Huawei's intelligent cloud-network healthcare solution enables healthcare providers to quickly migrate services to cloud, realize inter-cloud connections, and provide differentiated SLA assurance for private healthcare networks with large bandwidth, low latency, security, and reliability.

China has the most complete range of industries in the world. Industry segments vary in terms of professional expertise and thus need to adopt complex and diverse connection protocols. This entails challenges such as high thresholds for cross-industry participation and difficult access.

Industrial Internet is critical to the real economy and the country as a whole, and is becoming an application scenario of cloud-network convergence. The digital transformation of industry requires ubiquitous connections, massive and ubiquitous cloud resources, and secure and stable cloud-network resources.

In addition to providing access networks with high bandwidth, security, and reliability, carriers should use smart gateways to help enterprises obtain industry data in different scenarios and convert and parse protocols. They should also leverage their advantages in cloud-network convergence to quickly build favorable environments for enterprises to migrate to cloud to realize intelligent production lines and flexible production.

Cloud-network convergence must adapt to various and ever-evolving customer requirements. In the intelligent cloud-network era, carriers must shift from offering network connections and cloudification services to offering converged cloud, network, and security services.

Telecom carriers are latecomers in the cloud computing market, and operate more conservatively than Internet companies. However, they are rapidly gaining market share with their advantages in networks and abundant IDC resources. As service forms, business models, O&M systems, service models, and workforces undergo large-scale adjustment, telecom carriers will have more business opportunities due to supporting the digital transformation of various industries.