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The journey to cloud-native and network monetization

Contributed by Vivek K. Chadha, Senior Vice President, Global Head Telco Cloud, Rakuten Symphony.

Many businesses today – including 96% of Fortune 500s – have their data on the public cloud. As a natural evolution, in recent years, cloud computing has brought the discussion around containers and cloud-native technology to the fore.

According to Gartner, by 2027, more than 90% of global organizations will be running containerized applications in production – a leap from less than 40% in 2021. Those considering the shift to cloud-native architectures stand to benefit from a structured approach that intertwines technology adoption and operating model re-calibration, and tying it all to business outcomes, as this blog proposes.

 

Understanding the lexicon: cloud-native vs. cloud

Companies contemplating a cloud-native transition are often confused by the different terminologies in the cloud ecosystem.

So, let’s start with the basics.

At a high level, cloud refers to the delivery of computing services over the internet. On the other hand, cloud-ready applications can run on a cloud but were originally designed for on-premises deployment and now, can offer the best of both worlds in terms of “hybrid” models.

Cloud-native is a term specifically used for applications that are designed and created for cloud environments from the start. It encompasses designing and managing applications, network functions, and services within an adaptable and open framework. Some of the key facets of a cloud-native environment are:

  • The business applications/workloads use containers and are orchestrated using Kubernetes.
  • Applications are grounded in microservices, allowing seamless integration with CI/CD pipelines for rapid deployments, lifecycle management, and intent-based/ declarative/ auto-scaling.
  • Applications are dynamically orchestrated, manageable, observable, and responsive to demand fluctuations through AI-driven just-in-time adjustments.

Technical and operational benefits of cloud-native are most easily visible across the following attributes:

  • High scalability: Seamlessly manages storage and network-intensive workloads by automatically scaling resources up or down
  • Operational efficiency: Reduced need for manual oversight due to automation or hyperautomation
  • High resilience: Designed for rapid failover and auto-healing, enhancing network reliability, and minimizing downtime
  • Improved time to market: Enables faster deployment and safer experimentation, driving innovation and accelerating the time-to-market for new offerings
  • Unified management: Supports operations across core, edge clouds through vendor-agnostic, unified management platforms
  • Enhanced security: Modern-day security practices, such as micro-segmentation, enable granular control of network traffic, strengthening the security posture

Looking for detailed insights on the nuances of cloud vs. cloud-native? Click here.

 

Monetization as the endgame

First, let’s start with “monetization” itself. Monetization is not necessarily unidimensional growth.

Successful businesses consistently focus on:

  1. Reducing costs
  2. Accelerating existing revenue streams
  3. Increasing market share/ introducing new revenue streams
Fig 1: Monetization can be multi-dimensional

Cloud-native offers a path to all three levers mentioned above.

 

This includes cost efficiencies due to hyperautomation and a faster, simpler paradigm of building, delivering, and managing services, as well as accelerating revenue by improving time to market and finally unlocking new capabilities and offerings.

Businesses undergoing a cloud-native transformation can enable value-added services on top of existing offerings at minimal effort and cost. For example, Multi-access Edge Computing (MEC) can enhance real-time data processing capabilities near the user (the edge) where the data and service demands get generated. Consequently, telecom providers can offer specialized, low-latency services to existing customers, realizing incremental gains.

Organizations can also tap into entirely new revenue streams by offering novel services or use cases facilitated by a cloud-native network architecture. Take Industrial IoT and Industry 4.0. Here, the network can support real-time data analytics and machine-to-machine communications, enabling manufacturers to offer predictive maintenance as a premium service, for instance. While the costs of setting up these new services can be on the higher side, the potential gains in terms of revenue and market differentiation are considerable.

 

Fig 2: Opportunities to maximize financial returns

 

Finally, expanding the Total Addressable Market (TAM) or Serviceable Obtainable Market (SOM) is possible by delivering services to areas previously constrained by cost, technology, or operational challenges. Innovative solutions like “Network in a Box” can extend connectivity to remote or underserved regions. Though these solutions may require moderate to high initial investment, the potential for high returns exists by tapping into markets that were previously unreachable.

By carefully evaluating these monetization avenues, businesses can maximize the return on investment in cloud-native network infrastructure and position themselves as leaders in the evolving digital landscape.

Putting the “why” before the “how”

Moving to a cloud-native architecture isn’t just a technological upgrade; it’s a business decision that affects the entire organization. It requires a willingness to invest in modernizing existing applications, adopting containerized applications, acquiring, or upskilling talent, and overhauling processes. You need to accept some change to embrace a better paradigm, and reap the benefits of cloud-native.

The decision to go cloud-native needs to be grounded in quantifiable business outcomes. Whether it’s achieving better resiliency and uptime, moving to a more ‘open’ software eco-system (limiting vendor-lock-in), cost optimization, increased market responsiveness, or improving agility, the ‘why’ behind moving to cloud-native must be business-centric. Importantly, you must assess whether the cloud-native path offers substantial ROI and aligns with your business strategy. Once you have assessed and decided that a cloud-native future is in the best interest of your business, what is needed next is a structured approach to embark on this adoption or transformation.

 

The journey to cloud-native: 5 essential steps

An organization’s cloud-native journey is nothing short of transformational. Here are some essential steps to guide this transition.

  1. Build basic cloud-native competencies & understanding

An understanding of key principles, such as container technologies, orchestration, microservices, and CI/CD is important to allow your organization to engage, stay in control of and relate to a cloud-native paradigm, toolset and technology, or terminology. There are now battle-tested and commercially proven platforms available that significantly lower the barrier to entry for businesses to get going with cloud-native. This brings us to the next point.

  1. Select the right platform

This is a pivotal decision. Factors such as scalability to accommodate future growth and security features that align with industry regulations are non-negotiable. The platform should offer a rich ecosystem of services, APIs, and third-party tools that can seamlessly integrate into existing workflows without having to undergo a major overhaul. The platform should also support multi-cloud or hybrid cloud orchestration for zero-touch deployment and end-to-end lifecycle management. This enables a simplified and automated approach to managing applications and resources across different cloud environments.

  1. Operational alignment and hyperautomation

This involves adopting new technologies and reshaping workflows and operations with a focus on hyperautomation. Hyperautomation can help businesses leverage advanced technologies like AI and machine learning to automate complex business processes. Cloud-native platforms allow hyperautomation tools to operate with optimal efficiency. They are inherently scalable and facilitate microservices, containerization, and orchestration – all key enablers for hyperautomation.

  1. Creating a vendor-ecosystem-aligned roadmap

A successful transition to cloud-native functions (CNFs) requires not just internal readiness but also a meticulous evaluation of the vendor ecosystem. Aligning the business roadmap to the future development plans of vendors allows businesses to capitalize on new features as they are rolled out and to stay updated.

  1. Benefits realization (and tracking)

A structured benefits realization model is essential for tracking the ROI of the cloud-native transformation journey. This model should outline KPIs that are aligned with the broader business objectives and need to be continuously measured and monitored.

Fig: The roadmap to successful cloud-native adoption

 

Conclusion

Today cloud-native is becoming an important consideration for many businesses across industries. However, choosing between cloud-native, cloud-ready, or just cloud is not only a technical decision but also a strategic business move.

Going cloud-native allows businesses to improve resilience to opening new operational and revenue models. This in turn allows them to take full advantage of cloud architectures and services.

Learn more about how Rakuten Symphony’s cloud-native SymcloudTM suite can help businesses maximize monetary benefits from their cloud-native journey.

Vivek Chadha is scheduled to appear at the “CxO Keynote Panel: The journey to Cloud Native and network monetization” on Thursday, 19 October, at FutureNet Asia 2023.

To join the session and/or schedule a meeting with him and the team in Singapore, please register here.

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