Microsoft Azure
AI Echo Chamber: “Upstream AI” companies huge spending fuels profit growth for “Downstream AI” firms
According to the Wall Street Journal, the AI industry has become an “Echo Chamber,” where huge capital spending by the AI infrastructure and application providers have fueled revenue and profit growth for everyone else. Market research firm Bespoke Investment Group has recently created baskets for “downstream” and “upstream” AI companies.
- The Downstream group involves “AI implementation,” which consist of firms that sell AI development tools, such as the large language models (LLMs) popularized by OpenAI’s ChatGPT since the end of 2022, or run products that can incorporate them. This includes Google/Alphabet, Microsoft, Amazon, Meta Platforms (FB), along with IBM, Adobe and Salesforce.
- Higher up the supply chain (Upstream group), are the “AI infrastructure” providers, which sell AI chips, applications, data centers and training software. The undisputed leader is Nvidia, which has seen its sales triple in a year, but it also includes other semiconductor companies, database developer Oracle and owners of data centers Equinix and Digital Realty.
The Upstream group of companies have posted profit margins that are far above what analysts expected a year ago. In the second quarter, and pending Nvidia’s results on Aug. 28th , Upstream AI members of the S&P 500 are set to have delivered a 50% annual increase in earnings. For the remainder of 2024, they will be increasingly responsible for the profit growth that Wall Street expects from the stock market—even accounting for Intel’s huge problems and restructuring.
It should be noted that the lines between the two groups can be blurry, particularly when it comes to giants such as Amazon, Microsoft and Alphabet, which provide both AI implementation (e.g. LLMs) and infrastructure: Their cloud-computing businesses are responsible for turning these companies into the early winners of the AI craze last year and reported breakneck growth during this latest earnings season. A crucial point is that it is their role as ultimate developers of AI applications that have led them to make super huge capital expenditures, which are responsible for the profit surge in the rest of the ecosystem. So there is a definite trickle down effect where the big tech players AI directed CAPEX is boosting revenue and profits for the companies down the supply chain.
As the path for monetizing this technology gets longer and harder, the benefits seem to be increasingly accruing to companies higher up in the supply chain. Meta Platforms Chief Executive Mark Zuckerberg recently said the company’s coming Llama 4 language model will require 10 times as much computing power to train as its predecessor. Were it not for AI, revenues for semiconductor firms would probably have fallen during the second quarter, rather than rise 18%, according to S&P Global.
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A paper written by researchers from the likes of Cambridge and Oxford uncovered that the large language models (LLMs) behind some of today’s most exciting AI apps may have been trained on “synthetic data” or data generated by other AI. This revelation raises ethical and quality concerns. If an AI model is trained primarily or even partially on synthetic data, it might produce outputs lacking human-generated content’s richness and reliability. It could be a case of the blind leading the blind, with AI models reinforcing the limitations or biases inherent in the synthetic data they were trained on.
In this paper, the team coined the phrase “model collapse,” claiming that training models this way will answer user prompts with low-quality outputs. The idea of “model collapse” suggests a sort of unraveling of the machine’s learning capabilities, where it fails to produce outputs with the informative or nuanced characteristics we expect. This poses a serious question for the future of AI development. If AI is increasingly trained on synthetic data, we risk creating echo chambers of misinformation or low-quality responses, leading to less helpful and potentially even misleading systems.
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In a recent working paper, Massachusetts Institute of Technology (MIT) economist Daron Acemoglu argued that AI’s knack for easy tasks has led to exaggerated predictions of its power to enhance productivity in hard jobs. Also, some of the new tasks created by AI may have negative social value (such as design of algorithms for online manipulation). Indeed, data from the Census Bureau show that only a small percentage of U.S. companies outside of the information and knowledge sectors are looking to make use of AI.
References:
https://deepgram.com/learn/the-ai-echo-chamber-model-collapse-synthetic-data-risks
https://economics.mit.edu/sites/default/files/2024-04/The%20Simple%20Macroeconomics%20of%20AI.pdf
AI wave stimulates big tech spending and strong profits, but for how long?
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AI wave stimulates big tech spending and strong profits, but for how long?
Big tech companies have made it clear over the last week that they have no intention of slowing down their stunning levels of spending on artificial intelligence (AI), even though investors are getting worried that a big payoff is further down the line than most believe.
In the last quarter, Apple, Amazon, Meta, Microsoft and Google’s parent company Alphabet spent a combined $59 billion on capital expenses, 63% more than a year earlier and 161 percent more than four years ago. A large part of that was funneled into building data centers and packing them with new computer systems to build artificial intelligence. Only Apple has not dramatically increased spending, because it does not build the most advanced AI systems and is not a cloud service provider like the others.
At the beginning of this year, Meta said it would spend more than $30 billion in 2024 on new tech infrastructure. In April, he raised that to $35 billion. On Wednesday, he increased it to at least $37 billion. CEO Mark Zuckerberg said Meta would spend even more next year. He said he’d rather build too fast “rather than too late,” and allow his competitors to get a big lead in the A.I. race. Meta gives away the advanced A.I. systems it develops, but Mr. Zuckerberg still said it was worth it. “Part of what’s important about A.I. is that it can be used to improve all of our products in almost every way,” he said.
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This new wave of Generative A.I. is incredibly expensive. The systems work with vast amounts of data and require sophisticated computer chips and new data centers to develop the technology and serve it to customers. The companies are seeing some sales from their A.I. work, but it is barely moving the needle financially.
In recent months, several high-profile tech industry watchers, including Goldman Sachs’s head of equity research and a partner at the venture firm Sequoia Capital, have questioned when or if A.I. will ever produce enough benefit to bring in the sales needed to cover its staggering costs. It is not clear that AI will come close to having the same impact as the internet or mobile phones, Goldman’s Jim Covello wrote in a June report.
“What $1 trillion problem will AI solve?” he wrote. “Replacing low wage jobs with tremendously costly technology is basically the polar opposite of the prior technology transitions I’ve witnessed in my 30 years of closely following the tech industry.” “The reality right now is that while we’re investing a significant amount in the AI.space and in infrastructure, we would like to have more capacity than we already have today,” said Andy Jassy, Amazon’s chief executive. “I mean, we have a lot of demand right now.”
That means buying land, building data centers and all the computers, chips and gear that go into them. Amazon executives put a positive spin on all that spending. “We use that to drive revenue and free cash flow for the next decade and beyond,” said Brian Olsavsky, the company’s finance chief.
There are plenty of signs the boom will persist. In mid-July, Taiwan Semiconductor Manufacturing Company, which makes most of the in-demand chips designed by Nvidia (the ONLY tech company that is now making money from AI – much more below) that are used in AI systems, said those chips would be in scarce supply until the end of 2025.
Mr. Zuckerberg said AI’s potential is super exciting. “It’s why there are all the jokes about how all the tech C.E.O.s get on these earnings calls and just talk about A.I. the whole time.”
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Big tech profits and revenue continue to grow, but will massive spending produce a good ROI?
Last week’s Q2-2024 results:
- Google parent Alphabet reported $24 billion net profit on $85 billion revenue.
- Microsoft reported $22 billion net profit on $65 billion revenue.
- Meta reported $13.5 billion net profit on $39 billion revenue.
- Apple reported $21 billion net profit on $86 billion revenue.
- Amazon reported $13.5 billion net profit on $148 billion revenue.
This chart sums it all up:
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References:
https://www.nytimes.com/2024/08/02/technology/tech-companies-ai-spending.html
https://www.axios.com/2024/08/02/google-microsoft-meta-ai-earnings
https://www.nvidia.com/en-us/data-center/grace-hopper-superchip/
AI Frenzy Backgrounder; Review of AI Products and Services from Nvidia, Microsoft, Amazon, Google and Meta; Conclusions
Microsoft choses Lumen’s fiber based Private Connectivity Fabric℠ to expand Microsoft Cloud network capacity in the AI era
Lumen Technologies and Microsoft Corp. announced a new strategic partnership today. Microsoft has chosen Lumen to expand its network capacity and capability to meet the growing demand on its datacenters due to AI (i.e. huge processing required for Large Language Models, including data collection, preprocessing, training, and evaluation). Datacenters have become critical infrastructure that power the compute capabilities for the millions of people and organizations who rely on and trust the Microsoft Cloud.
Microsoft claims they are playing a leading role in ushering in the era of AI, offering tools and platforms like Azure OpenAI Service, Microsoft Copilot and others to help people be more creative, more productive and to help solve some of humanity’s biggest challenges. As Microsoft continues to evolve and scale its ecosystem, it is turning to Lumen as a strategic supplier for its network infrastructure needs and is investing with Lumen to support its next generation of applications for Microsoft platform customers worldwide.
Lumen’s Private Connectivity Fabric℠ is a custom network that includes dedicated access to existing fiber in the Lumen network, the installation of new fiber on existing and new routes, and the use of Lumen’s new digital services. This AI-ready infrastructure will strengthen the connectivity capabilities between Microsoft’s datacenters by providing the network capacity, performance, stability and speed that customers need as data demands increase.
Art by Midjourney for Fierce Network
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“AI is reshaping our daily lives and fundamentally changing how businesses operate,” said Erin Chapple, corporate vice president of Azure Core Product and Design, Microsoft. “We are focused both on the impact and opportunity for customers relative to AI today, and a generation ahead when it comes to our network infrastructure. Lumen has the network infrastructure and the digital capabilities needed to help support Azure’s mission in creating a reliable and scalable platform that supports the breadth of customer workloads—from general purpose and mission-critical, to cloud-native, high-performance computing, and AI, plus what’s on the horizon. Our work with Lumen is emblematic of our investments in our own cloud infrastructure, which delivers for today and for the long term to empower every person and every organization on the planet to achieve more.”
“We are preparing for a future where AI is the driving force of innovation and growth, and where a powerful network infrastructure is essential for companies to thrive,” said Kate Johnson, president and CEO, Lumen Technologies (a former Microsoft executive). “Microsoft has an ambitious vision for AI and this level of innovation requires a network that can make it reality. Lumen’s expansive network meets this challenge, with unique routes, unmatched coverage, and a digital platform built to give companies the flexibility, access and security they need to create an AI-enabled world.”
Lumen has launched an enterprise-wide transformation to simplify and optimize its operations. By embracing Microsoft’s cloud and AI technology, Lumen can reduce its overall technology costs, remove legacy systems and silos, improve its offerings, and create new solutions for its global customer base. Lumen will migrate and modernize its workloads to Microsoft Azure, use Microsoft Entra solutions to safeguard access and prevent identity attacks and partner with Microsoft to create and deliver new telecom industry-specific solutions. This element alone is expected to improve Lumen’s cash flow by more than $20 million over the next 12 months while also improving the company’s customer experience.
“Azure’s advanced global infrastructure helps customers and partners quickly adapt to changing economic conditions, accelerate technology innovation, and transform their business with AI,” said Chapple. “We are committed to partnering with Lumen to help deliver on their transformation goals, reimagine cloud connectivity and AI synergies, drive business growth, and help customers achieve more.”
This collaboration expands upon the longstanding relationship between Lumen Technologies and Microsoft. The companies have worked together for several years, with Lumen leveraging Copilot to automate routine tasks and reduce employee workloads and enhance Microsoft Teams.
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Lumen’s CMO Ryan Asdourian hinted the deal could be the first in a series of such partnerships, as network infrastructure becomes the next scarce resource in the era of AI. “When the world has talked about what’s needed for AI, you usually hear about power, space and cooling…[these] have been the scarce resources,” Asdourian told Fierce Telecom. Asdourian said Lumen will offer Microsoft access to a combination of new and existing routes in the U.S., and will overpull fiber where necessary. However, he declined to specify the speeds which will be made available or exactly how many of Microsoft’s data centers it will be connecting.
Microsoft will retain full control over network speeds, routes and redundancy options through Lumen’s freshly launched Private Connectivity Fabric digital interface. “That is not something traditional telecom has allowed,” Asdourian said.
Asdourian added that Lumen isn’t just looking to enable AI, but also incorporate it into its own operations. Indeed, part of its partnership deal with Microsoft involves Lumen’s adoption of Azure cloud and other Microsoft services to streamline its internal and network systems. Asdourian said AI could be used to make routing and switching on its network more intelligent and efficient.
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About Lumen Technologies:
Lumen connects the world. We are igniting business growth by connecting people, data, and applications – quickly, securely, and effortlessly. Everything we do at Lumen takes advantage of our network strength. From metro connectivity to long-haul data transport to our edge cloud, security, and managed service capabilities, we meet our customers’ needs today and as they build for tomorrow. For news and insights visit news.lumen.com, LinkedIn: /lumentechnologies, Twitter: @lumentechco, Facebook: /lumentechnologies, Instagram: @lumentechnologies and YouTube: /lumentechnologies.
About Microsoft:
Microsoft (Nasdaq “MSFT” @microsoft) creates platforms and tools powered by AI to deliver innovative solutions that meet the evolving needs of our customers. The technology company is committed to making AI available broadly and doing so responsibly, with a mission to empower every person and every organization on the planet to achieve more.
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References:
https://news.lumen.com/2024-07-24-Microsoft-and-Lumen-Technologies-partner-to-power-the-future-of-AI-and-enable-digital-transformation-to-benefit-hundreds-of-millions-of-customers
https://fierce-network.com/cloud/microsoft-taps-lumens-fiber-network-help-it-meet-ai-demand
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Cloud Service Providers struggle with Generative AI; Users face vendor lock-in; “The hype is here, the revenue is not”
Everyone agrees that Generative AI has great promise and potential. Martin Casado of Andreessen Horowitz recently wrote in the Wall Street Journal that the technology has “finally become transformative:”
“Generative AI can bring real economic benefits to large industries with established and expensive workloads. Large language models could save costs by performing tasks such as summarizing discovery documents without replacing attorneys, to take one example. And there are plenty of similar jobs spread across fields like medicine, computer programming, design and entertainment….. This all means opportunity for the new class of generative AI startups to evolve along with users, while incumbents focus on applying the technology to their existing cash-cow business lines.”
A new investment wave caused by generative AI is starting to loom among cloud service providers, raising questions about whether Big Tech’s spending cutbacks and layoffs will prove to be short lived. Pressed to say when they would see a revenue lift from AI, the big U.S. cloud companies (Microsoft, Alphabet/Google, Meta/FB and Amazon) all referred to existing services that rely heavily on investments made in the past. These range from the AWS’s machine learning services for cloud customers to AI-enhanced tools that Google and Meta offer to their advertising customers.
Microsoft offered only a cautious prediction of when AI would result in higher revenue. Amy Hood, chief financial officer, told investors during an earnings call last week that the revenue impact would be “gradual,” as the features are launched and start to catch on with customers. The caution failed to match high expectations ahead of the company’s earnings, wiping 7% off its stock price (MSFT ticker symbol) over the following week.
When it comes to the newer generative AI wave, predictions were few and far between. Amazon CEO Andy Jassy said on Thursday that the technology was in its “very early stages” and that the industry was only “a few steps into a marathon”. Many customers of Amazon’s cloud arm, AWS, see the technology as transformative, Jassy noted that “most companies are still figuring out how they want to approach it, they are figuring out how to train models.” He insisted that every part of Amazon’s business was working on generative AI initiatives and the technology was “going to be at the heart of what we do.”
There are a number of large language models that power generative AI, and many of the AI companies that make them have forged partnerships with big cloud service providers. As business technology leaders make their picks among them, they are weighing the risks and benefits of using one cloud provider’s AI ecosystem. They say it is an important decision that could have long-term consequences, including how much they spend and whether they are willing to sink deeper into one cloud provider’s set of software, tools, and services.
To date, AI large language model makers like OpenAI, Anthropic, and Cohere have led the charge in developing proprietary large language models that companies are using to boost efficiency in areas like accounting and writing code, or adding to their own products with tools like custom chatbots. Partnerships between model makers and major cloud companies include OpenAI and Microsoft Azure, Anthropic and Cohere with Google Cloud, and the machine-learning startup Hugging Face with Amazon Web Services. Databricks, a data storage and management company, agreed to buy the generative AI startup MosaicML in June.
If a company chooses a single AI ecosystem, it could risk “vendor lock-in” within that provider’s platform and set of services, said Ram Chakravarti, chief technology officer of Houston-based BMC Software. This paradigm is a recurring one, where a business’s IT system, software and data all sit within one digital platform, and it could become more pronounced as companies look for help in using generative AI. Companies say the problem with vendor lock-in, especially among cloud providers, is that they have difficulty moving their data to other platforms, lose negotiating power with other vendors, and must rely on one provider to keep its services online and secure.
Cloud providers, partly in response to complaints of lock-in, now offer tools to help customers move data between their own and competitors’ platforms. Businesses have increasingly signed up with more than one cloud provider to reduce their reliance on any single vendor. That is the strategy companies could end up taking with generative AI, where by using a “multiple generative AI approach,” they can avoid getting too entrenched in a particular platform. To be sure, many chief information officers have said they willingly accept such risks for the convenience, and potentially lower cost, of working with a single technology vendor or cloud provider.
A significant challenge in incorporating generative AI is that the technology is changing so quickly, analysts have said, forcing CIOs to not only keep up with the pace of innovation, but also sift through potential data privacy and cybersecurity risks.
A company using its cloud provider’s premade tools and services, plus guardrails for protecting company data and reducing inaccurate outputs, can more quickly implement generative AI off-the-shelf, said Adnan Masood, chief AI architect at digital technology and IT services firm UST. “It has privacy, it has security, it has all the compliance elements in there. At that point, people don’t really have to worry so much about the logistics of things, but rather are focused on utilizing the model.”
For other companies, it is a conservative approach to use generative AI with a large cloud platform they already trust to hold sensitive company data, said Jon Turow, a partner at Madrona Venture Group. “It’s a very natural start to a conversation to say, ‘Hey, would you also like to apply AI inside my four walls?’”
End Quotes:
“Right now, the evidence is a little bit scarce about what the effect on revenue will be across the tech industry,” said James Tierney of Alliance Bernstein.
Brent Thill, an analyst at Jefferies, summed up the mood among investors: “The hype is here, the revenue is not. Behind the scenes, the whole industry is scrambling to figure out the business model [for generative AI]: how are we going to price it? How are we going to sell it?”
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References:
https://www.ft.com/content/56706c31-e760-44e1-a507-2c8175a170e8
https://www.wsj.com/articles/companies-weigh-growing-power-of-cloud-providers-amid-ai-boom-478c454a
https://www.techtarget.com/searchenterpriseai/definition/generative-AI?Offer=abt_pubpro_AI-Insider
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Microsoft announces Azure Operator Nexus; Enea to deliver subscriber data management and traffic management in 4G & 5G
Microsoft launched its brand new next-gen hybrid cloud platform – Azure Operator Nexus – for network operators today. Azure Operator Nexus is an expansion of the Azure Operator Distributed Services private preview. Azure Operator Nexus is a hybrid, carrier-grade cloud platform designed for the specific needs of the operator in running network functions such as packet core, virtualized radio access networks (vRAN), subscriber data management, and billing policy. Azure Operator Nexus is a first-party Microsoft product that builds on the functionality of its predecessor, adding essential features of key Microsoft technologies such as Mariner Linux, Hybrid AKS, and Arc while continuing to leverage Microsoft Services for security, lifecycle management, Observability, DevOps and automation.
Azure Operator Nexus has already been released to our flagship customer, AT&T, and the results have been incredibly positive. Now, we’re selectively working with operators for potential deployments around the world. In this blog post, we provide an overview of the service from design and development to deployment and also discuss benefits the customers can expect, including research and analysis into the total cost of ownership (TCO).
Overview:
Microsoft Azure Operator Nexus leverages cloud technology to modernize and monetize operator network investments to deliver benefits such as:
- Lower overall TCO
- Greater operations efficiency and resiliency through AI and automation
- Improved security for highly-distributed, software-based networks
Azure Operator Nexus is a purpose-built service for hosting carrier-grade network functions. The service is specifically designed to bring carrier-grade performance and resiliency to traditional cloud infrastructures. Azure Operator Nexus delivers operator mobile core and vRAN network functions securely in on-premises (far-edge, near-edge, core datacenters) and on-Azure regions. This delivers a rich Azure experience, including visibility into logging, monitoring, and alerting for infrastructure components and workloads. Operators will have a consistent environment across both on-premises and Azure regions, allowing network function workloads to move seamlessly from one location to another based on application needs and economics.
Whether deployed on-premises or in Azure infrastructure, network functions may access an identical set of platform capabilities. On-premises, the service uses a curated hardware BOM of commercial off-the-shelf (COTS)-based servers, network switches, dedicated storage arrays, and terminal servers. Both deployment models are Linux-based, in alignment with network function needs, telecommunications industry trends, and relevant open-source communities. Additionally, the service supports both virtualized network functions (VNFs) and containerized network functions (CNFs).
The Azure Operator Nexus is based on the experience of a large telecommunications operator that has spent the past seven years virtualizing more than 75 percent of its network and overcoming the scale challenges of network-function virtualization. From this deep networking and virtualization experience, Operator Nexus was designed to:
- Provide the network function runtime that allows the fast-packet processing required to meet the carrier-grade-network demands of network functions supporting tens of millions of subscribers. Examples of requirements the platform delivers include optimized container support, flexible, fine-grained VM sizing, NUMA alignment to avoid UPI performance penalties, Huge Pages, CPU pinning, CPU isolation, Multiple Network Attachments, SR-IOV & OVS/DPDK host coexistence, SR-IOV trusted mode capabilities and complex scheduling support across failure domains.
- Ensure the quality, resiliency, and security required by network-function workloads through robust test automation.
- Deliver lifecycle automation to manage cloud instances and workloads from their creation through minor updates and configuration changes, and even major uplifts such as VMs and Kubernetes upgrades. This is accomplished via a unified and declarative framework driving low operational cost, high-quality performance, and minimal impact on mission-critical running network workloads.
In addition to the performance-enhancing features, Azure Operator Nexus also includes a fully integrated solution of software-defined networking (SDN), low latency storage, and an integrated packet broker. The connectivity between the Operator premises and Azure leverages Express Route Local capabilities to address the transfer of large volumes of operational data in a cost-effective manner.
One of the key benefits of a hybrid cloud infrastructure is its ability to provide harmonized observability for both infrastructure and applications. This means one can easily monitor and troubleshoot any issues that may arise, ensuring systems are running smoothly and efficiently. The platform collects logs, metrics, and traces from network function virtualization infrastructure (NFVI) and network functions (NFs). It also offers a rich analytical, AI/ML-based toolset to develop descriptive and prescriptive analytics. Our goal with this observability architecture is to securely bring all operator data into a single data lake where it can be processed to provide a global-network view and harvested for operational and business insights.
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Stockholm Sweden based Enea is amongst the first to join the program. They will deliver subscriber data management and traffic management in 4G and 5G for the new platform.
The introduction of Enea’s Telecom product portfolio will further enhance mobile operators’ ability to unlock the potential of 5G and provide more choice in pre-validated solutions to ensure a faster time to deployment for solutions. Enea’s telecom products include the Stratum Network Data layer, 5G Service Engine, Subscription Manager and Policy Manager, providing a range of subscriber data management, authorization and traffic management capabilities for both 4G & 5G mobile environments.
Azure Operator Nexus program provides an API layer to automate and manage network functions. The Enea network functions will integrate and validate at both the API interoperability level and the automated deployment level to provide telecom operators the option to build, host and operate these containerized functions as part of a network in a cloud or hybrid cloud environment. As pre-validated services, the Enea network functions will be available in the Azure Marketplace.
“The integration with Microsoft Azure Operator Nexus demonstrates Enea’s commitment to multi-vendor telecom architecture, software-based solution and open interoperability.”, said Osvaldo Aldao, Vice President of Product Management at Enea. Further adding, “The addition of our Stratum network data layer as an open 5G UDR & UDSF will provide the data management foundation to drive a fully cloud native architecture with Azure Operator Nexus”.
“Enea joining the Microsoft Azure Operator Nexus Ready Program enables both network function expertise and deployment experience from their extensive portfolio”, said Ross Ortega, Vice President – Azure for Operators, “Enea’s pre-validated functions in the Azure Marketplace will be an essential building block for operator networks.”
References:
Microsoft Azure for Operators:
https://azure.microsoft.com/en-us/solutions/industries/telecommunications/#overview
Enea software portfolio:
Network Data Layer: https://www.enea.com/solutions/4g-5g-network-data-layer/
5G Applications https://www.enea.com/solutions/data-management-applications/
Traffic Management – https://www.enea.com/solutions/traffic-management/4g-5g-user-plane-dual-mode-services/
About Enea:
Enea is a world-leading specialist in software for telecom and cybersecurity. The company’s cloud-native solutions connect, optimize, and secure services for mobile subscribers, enterprises, and the Internet of Things. More than 100 communication service providers and 4.5 billion people rely on Enea technologies every day.
Enea has strengthened its product portfolio and global market position by integrating a number of acquisitions, including Qosmos, Openwave Mobility, Aptilo Networks, and AdaptiveMobile Security.
Contact: Stephanie Huf, Chief Marketing Officer [email protected]
Tech Mahindra and Microsoft partner to bring cloud-native 5G SA core network to global telcos
India’s Tech Mahindra and Microsoft have announced a collaboration to enable cloud-powered 5G SA core network for telecom operators worldwide. As a part of the collaboration, Tech Mahindra will provide its expertise, comprehensive solutions, and managed services offerings to telecom operators for their 5G SA Core networks. Tech Mahindra will provide its expertise like “Network Cloudification as a Service” and AIOps to global telecom operators for their 5G Core networks. AIOps will help operators combine big data and machine learning to automate network operations processes, including anomaly detection, predicting fault and performance issues.
CP Gurnani, Managing Director and Chief Executive Officer, Tech Mahindra said, “Today, it is critical to leverage next-gen technologies to build relevant and resilient services and solutions for customers across the globe. At Tech Mahindra, we are well-positioned to help telecom operators realize the full potential of their networks and provide innovative and agile services to their customers while also helping them meet their ESG commitments. Our collaboration with Microsoft will further strengthen our service portfolio by combining our deep expertise across the telecom industry with Microsoft Cloud. Further to this collaboration, Tech Mahindra and Microsoft will work together to help telecom operators simplify and transform their operations in order to build green and secure networks by leveraging the power of cloud technologies. At Tech Mahindra, we are well-positioned to help telecom operators realize the full potential of their networks and provide innovative and agile services to their customers while also helping them meet their ESG commitments.”
Tech Mahindra believes the 5G core network will enable use cases such as Augmented Reality (AR), Virtual Reality (VR), IoT (Internet of Things, and edge computing. Of course, 5G URLLC performance requirements, especially ultra low latency, in the RAN and core network must be met first, which they are not at this time. The company will leverage the Microsoft Azure cloud for its sustainability solution iSustain to measure and monitor KPIs across all three aspects of E, S & G. iSustain will help operators address the challenge of measuring and reducing carbon emissions from the networks while meeting demands of the countless energy intense digital technologies, from AR/ VR to IoT.
Anant Maheshwari, President, Microsoft India said, “Harnessing the power of Microsoft Azure, telecom operators can provide more flexibility and scalability, save infrastructure cost, use AI to automate operations, and differentiate their customer offerings. The collaboration between Tech Mahindra and Microsoft will help our customers build green and secured networks with seamless experiences across the Microsoft cloud and the operator’s network. Azure provides operators with cloud solutions that enable them to create new revenue generating services and move existing services to the cloud. Through our collaboration with Tech Mahindra, Microsoft will further help telcos overcome challenges, drive innovation and build green and secured networks that provide seamless experiences by leveraging the power of Microsoft Cloud for Operators.”
The partnership is in line with Tech Mahindra’s NXT.NOWTM framework, which aims to enhance the ‘Human Centric Experience’, Tech Mahindra focuses on investing in emerging technologies and solutions that enable digital transformation and meet the evolving needs of the customer.
About Tech Mahindra:
Tech Mahindra offers innovative and customer-centric digital experiences, enabling enterprises, associates and the society to Rise. We are a USD 6 billion organization with 163,000+ professionals across 90 countries helping 1279 global customers, including Fortune 500 companies. We are focused on leveraging next-generation technologies including 5G, Blockchain, Metaverse, Quantum Computing, Cybersecurity, Artificial Intelligence, and more, to enable end-to-end digital transformation for global customers. Tech Mahindra is the only Indian company in the world to receive the HRH The Prince of Wales’ Terra Carta Seal for its commitment to creating a sustainable future. We are the fastest growing brand in ‘brand strength’ and amongst the top 7 IT brands globally. With the NXT.NOWTM framework, Tech Mahindra aims to enhance ‘Human Centric Experience’ for our ecosystem and drive collaborative disruption with synergies arising from a robust portfolio of companies. Tech Mahindra aims at delivering tomorrow’s experiences today and believes that the ‘Future is Now.’
References:
Tech Mahindra: “We can build and run an entire 4G and 5G or any enterprise network”
Tech Mahindra: India Needs to Begin 5G Spectrum Auction Now!
Microsoft unveils Azure Space Partner Community to shape the future of space technologies and services
Microsoft is expanding its relationships with space companies through the Azure Space Partner Community, an initiative unveiled July 19 at the Microsoft Inspire 2022 conference.
The Azure Space Partner Community enables Microsoft’s partners to deliver the most comprehensive and innovative offerings to joint customers, helping to shape the future of space technologies and services. The space industry is rapidly advancing and we believe in the power of bringing together this community in an ecosystem.
This ecosystem is enabled with opportunities such as co-engineering, go-to-market scaling and support, alongside many other benefits designed to empower our partners. We are excited to rapidly innovate and advance the industry with our inaugural cohort of partners, and we look forward to welcoming new partners in the days to come.
“By launching the Azure Space Partner Community, we can enable our partners to deliver the most comprehensive and innovative offerings to our joint customers, and help shape the future of space technologies and services,” Stephen Kitay, Microsoft Azure Space senior director, told SpaceNews. “This is an ecosystem of space partners with exclusive access to technical support and scaling solutions.”
Microsoft’s inaugural cohort of space-related partners are Airbus, Amergint, Ball Aerospace, blackshark.ai, Esri, Hewlett Packard Enterprise, iDirect, Intelsat, Kratos, KSAT, Loft Orbital, Nokia, Omnispace, Orbital Insight, SES, SkyWatch, SpaceX, Thales Alenia Space, US Electrodynamics, Viasat and Xplore.
Image Credit: Microsoft
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“We look forward to welcoming new partners in the days to come,” Kitay said.
Microsoft has played a growing role in the space sector since announcing plans in 2020 to help customers move data directly from satellites into the Azure cloud for processing and storage.
“We’ve increasingly seen an opportunity for this community to benefit from Microsoft engineering and go-to-market resources,” Kitay said.
Azure Space Community partners will have access to Microsoft sales and engineering specialists, go-to-market scale and support, and guidance related to marketing and community involvement. In addition, Azure Space Partners will be eligible for incentives like Azure credits, sponsored accounts and volume discounts.
By establishing the Azure Space Community, Microsoft is “creating more of a structure” to clearly convey the benefits of membership and enable the tech giant to “efficiently onboard” new partners, Kitay said.
Through the Azure Space Partner Community (which falls under the broader Microsoft Partner Program), Microsoft also is acknowledging the growing importance of the space sector.
“It is absolutely representative of the value and importance that Microsoft is placing on this industry and our excitement about growing alongside these partners,” Kitay said. “Space is a big data domain, where massive amounts of data are either moving through space with connectivity solutions or being collected from space and transmitted to the Earth. The need to process that, understand it and then connect it with customers is vitally important.
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Program Details and Deliverables:
Image Credit: Microsoft
Co-innovation and engineering:
The Azure Space Partner Community will have direct access to Microsoft engineering and specialist resources to turn our partnership vision into reality, including:
- Participation in Azure Space training to learn about and onboard the latest Azure Space technologies.
- Collaboration and innovation with our engineering and sales specialist teams for customer proof of concepts to demonstrate the value of our partnership.
- Access to quarterly Azure Space NDA roadmap reviews and newsletters, and ability to directly influence the produce roadmap.
- Partner highlighting in reference architectures and training materials.
- Priority access to early adopter and private preview programs.
Go-to-market scale and support:
Our Azure Space Partner Community will be able to increase their go-to-market opportunities by participating in the following opportunities:
- Microsoft first party product integration or add-ins, such as in Teams, Power BI, or productivity tools.
- White glove onboarding to the Microsoft Cloud Partner Program, to become a cloud solution provider or managed solution provider via direct or indirect channels.
- Support onboarding to the Azure Marketplace as an indirect or transactable offer, with access to a broad set of Azure sellers and customers.
- Joint go-to-market coordination with a regular cadence of customer pipeline reviews.
Marketing and community involvement:
Azure Space provides a unique opportunity for our partners to expand their marketing through public outreach via our marketing channels, such as:
- Opportunities to be showcased in Microsoft customer presentations and sales training.
- Participation in space and spectrum focused Microsoft events – such as BUILD, Inspire or sales readiness.
- Joint public relations and marketing opportunities, such as press releases, blogs, and speaking events at conferences.
Product offering incentives:
The Space Partner Community will also have special access to our premier incentives offered for Azure Space product offerings:
- Azure credits, sponsored accounts, and volume discounts in return for Microsoft Azure Consumption Commitment.
- Enterprise Agreement Programs, such as Licensed Service Providers (LSPs) and Azure Online Services Government (AOSG), with rebates based on resell criteria.
- FastTrack dedicated modernization and migration architecture support for qualified opportunities.
- Many other Microsoft Partner Network benefits, such as credits for gold competencies and partner marketing benefits via co-sell programs.
References:
https://www.microsoft.com/azure/partners/news/article/announcing-the-azure-space-partner-community
Progress report: Moving AT&T’s 5G core network to Microsoft Azure Hybrid Cloud platform
Introduction:
A little more than six months after AT&T announced it’s 5G SA Core Network would run on Microsoft Azure cloud platform, a Microsoft blog post by Shawn Hakl, VP of 5G strategy in Azure for Operators, provides a progress report on that crucial IT industry initiative. Microsoft received requests from many operators, partners, and customers to share more details of the evolution of Microsoft’s hybrid cloud technology to support AT&T’s 5G core network workloads.
Through Azure for Operators, Microsoft has forged close ties with AT&T personnel, product services groups, and partners. At the heart of the value Microsoft delivers in each of these relationships, is the way in which we leverage the power of the cloud to improve the next generation of telco networks. Microsoft aims to harness trends toward Software Defined Networking (SDN), Cloud-Native Network Functions (CNFs), and Virtualized Network Functions (VNFs) coupled with the service-based architecture of 5G, to begin digitally transforming the network.
That evolution involves introducing both hybrid cloud infrastructure and software, building scalable elastic carrier-grade networks, and using the power of AI and machine learning to build self-optimizing networks that can heal, defend, and provision themselves. These efforts will enable operators to hyper-automate the business itself, bringing down costs and improving the overall service experience. Azure for Operators represents the set of investments Microsoft is making to bring the power of the cloud to the network.
Microsoft’s efforts are aimed at getting workloads on the network to function on a carrier-grade hybrid cloud, which includes both public and dedicated on-premises cloud infrastructure. Telecommunication services are highly distributed and will likely become more so over time. As a result, the value of creating a carrier-grade hybrid cloud model lives in its ability to meet customers where they are—at the edge of the cloud, the edge of the network, or the edge of the enterprise.
AT&T Backgrounder on use of “SDN” and network virtualization:
In 2013, AT&T adopted an aggressive position on “Software Defined Networks (SDNs)” and network virtualization, with the ultimate goal of delivering 75 percent of their network using virtualized technology by 2020. With their own definition of SDN (not related to the ONF’s strict separation of control and data planes or using OpenFlow as the southbound interface between them). AT&T says they did meet those objectives, but this author is skeptical based on checks with AT&T employees that work in their central offices.
In the 2013-2020 time frame, there was no commercial cloud option available that included the necessary features and capabilities to enable carrier-grade cloud. AT&T created a mostly proprietary (not standards based as claimed) implementation of cloud technology that was deployed in their on-premises data centers. This initial integrated cloud evolved into a Network Cloud, and today, we’ve arrived at Network Cloud 2.7—representing seven years of experience developing on-premises cloud for network workloads.
With Microsoft’s recent acquisition of this technology, development teams from AT&T’s Network Cloud organization have moved into Azure for Operators, directly integrating the intellectual property into a Microsoft offering and assuring a seamless transition.
Unique AT&T – Microsoft Partnership:
Microsoft says their collaboration with AT&T is unique in three ways:
- It’s the first time that a tier-one operator has embraced commercial hybrid cloud technology to run mobility network workloads that support their existing consumer base.
- The effort is entirely focused on the mobility core network versus go-to-market collaborations at the edge.
- It’s a multi-vendor cloud-mobile core network system: Microsoft hybrid cloud technology supports the AT&T mobile core network that spans more than 60 cloud-native network functions (CNFs) and virtual network functions (VNFs) from 15 different vendors.
Network Cloud technology originally developed by AT&T can be utilized by multiple carriers, maintaining security, without losing differentiation, and with the added benefit of having many costs such as security patching, vendor updates, and regulatory changes delivered as part of a standard commercial product.
These capabilities will be combined with Microsoft’s edge platform, our hybrid management platform, Azure Arc, and our ecosystem of partners including equipment providers, hardware vendors, and software vendors. By joining the Network Cloud with our platform and growing ecosystem, we have achieved a carrier-grade hybrid cloud solution that will be delivered as the Azure for Operators platform. The roles of the partners are as follows:
- Microsoft develops the carrier-grade hybrid cloud technology that supports the AT&T mobility core network workloads.
- AT&T continues to select and manage the network applications (VNFs and CNFs) and their configurations to deliver mobility services to AT&T customers.
In other words, Microsoft is taking the AT&T Network Cloud technology, building it into Microsoft’s standard hybrid cloud product, and then delivering a carrier-grade hybrid cloud solution to the market and AT&T itself, where it can run at AT&T on-premises or on Azure public cloud. Microsoft hybrid cloud technology supports the AT&T mobility core network workloads used to deliver 5G connectivity that supports consumer, enterprise, and the FirstNet responder community. In terms of security, it’s important to note that Microsoft does not access AT&T customer data—AT&T continues to hold access to that data, and Microsoft cannot see it.
For AT&T, this collaboration puts them in a position to deliver new services faster and more flexibly across Azure public cloud and on-premises with common tooling and services, reducing time-to-market for a cloud-native approach.
Microsoft believes the result will be better resiliency across the network, cost advantages when it comes to scaling existing services, and a more effective introduction of new services resulting in continuous improvements to the customer experience.
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Before joining Microsoft in 2020, Hakl was a longtime Verizon executive. He added that “Telecommunication services are highly distributed and will likely become more so over time. As a result, the value of creating a carrier-grade hybrid cloud model lives in its ability to meet customers where they are – at the edge of the cloud, the edge of the network, or the edge of the enterprise.”
James Crawshaw, a principal analyst of service provider operations and IT for research and consulting firm Omdia (owned by Informa in the UK), wrote on LinkedIn that Microsoft will have a lot of work to do to fully support AT&T’s complex core and cloud operations.
He also wrote that AT&T has a history of offloading networking systems. For example, the company in 2016 offloaded its ECOMP orchestration/automation system to the Linux Foundation open source community. However, “I don’t think that was a huge success,” Crawshaw wrote. He believes AT&T has replaced ECOMP (subsequently dubbed ONAP) elements with commercial orchestration systems in a number of areas. Here are are his exact words:
“When AT&T found that its ECOMP orchestration/automation system was getting too hard to manage they offloaded it to the Linux Foundation in the hope that the open source community would take care of it (ONAP). I don’t think that was a huge success (it was a failure, in this author’s opinion). I believe AT&T has actually replaced ECOMP/ONAP with commercial orchestration systems in a number of areas. Offloading its OpenStack-based cloud platform to Microsoft is a similar strategy. But if Microsoft struggles to turn a managed service into a repeatable product that they can sell to other operators around the world they may end up offloading it onto an IT services company whose business model is a better fit.”
Learn More:
Microsoft’s acquisition of AT&T’s Network Cloud, as well as Metaswitch Networks and Affirmed Networks, brings the anchor applications and telco know-how to build the features that are required for a carrier-grade hybrid cloud. These features, available to the entire partner ecosystem, contribute to an open, interoperable network that offers support to all operators. The message to operators from Microsoft is simple and straightforward: your partners and your customers—and the relationship is powered by our technology. For more information about the Azure for Operators strategy, refer to the e-book.
References:
AT&T 5G SA Core Network to run on Microsoft Azure cloud platform
https://www.linkedin.com/posts/jamescrawshaw_5g-telcocloud-activity-6884786261261881345-cqpb/