• Telstra has greatly enhanced the value proposition of its TPN by offering access to many more clouds through the interconnection with Equinix Cloud Exchange.
• Telstra has created a strong differentiator by building its SD-platform from the core, embracing open source and going down the path of building own ‘IP’ and lines of code.
• Partnership with Equinix opens a lot of potential opportunities
Telstra has become the first telco to interconnect its flagship software-defined platform, Telstra Programmable Networks (TPN) directly to the Equinix Cloud Exchange (ECX) and expose clouds services to a TPN GUI. This gives 400+ TPN subscribers the ability to connect to any range of third-party clouds for SaaS, IaaS, and PaaS in an Equinix carrier-neutral facility. The tight API automation with user interfaces replaces an older era of negotiating direct connects on a case by case basis with cloud partners. Telstra has connected customers to Azure, IBM, and AWS, to support the customers’ cloud requirements. Now other environments, such as Oracle, Salesforce, RightScale, and Google are all within reach. In places where one of the 38 TPN POPs overlays an Equinix facility, there are additional advantages for being on-net. Since the launch of ECX back in December 2017, the plan for Equinix is to make this platform available globally supporting many operators. The plan for Telstra with the TPN integration is to offer this to 63 clouds in eight markets in phase one, before extending up to 200 clouds in 52 markets. This appears to be a win for both parties for a number of reasons:
• Revenue: Equinix stands to generate revenues from VLAN and cross-connects from more customers. Telstra can connect customers to more clouds – private, public, and hybrid – in more availability zones. This opens up sales conversations to other regions.
• Security: Telstra can secure these environments spinning up firewall instances through its new secure gateway product, provide additional management platforms with RightScale or Cloud Sight, which offers cost-optimization, templates for compliance and the management of workloads. Dome9 is an interesting partner for infrastructure security for AWS, Google and Azure environments.
• Reciprocity: Equinix can potentially connect its platform, ECX, back into TPN to give it access to the many features/functions available on TPN. Reciprocal traffic and business opens the door for more TPN POPs in Equinix facilities.
• Assets: Telstra offers undersea cables, estimated to be about 30% capacity in APAC region, plus a network of data centers spread across the region in12 markets.
• Wild Cards: There are China options where Telstra operates in-country data center facilities. Web-scalers like AliCloud looking at the market with an outbound global lens.
• Channel: Reselling, even white labelling, is an option through its partner ecosystem of Disty’s VARs and SI’s. Verizon recently announced a new channel approach using ECX.
• Like-Minded Carriers: There are about five operators that have a similar view on the market on convergence, comparable SD-platform capabilities, and likely candidates to consider an API-led business model creating perhaps a bigger SD-exchange and/or SD-interconnects.
• Synergies: Sharing roadmaps provide better synergies, such as tools that integrate, and a partnership that potentially complements one/another.
Telcos will consider the API concept to interconnect with more cloud partners faster and carrier neutral providers. It is a great route to market and can be a model for others to follow. However few operators, perhaps a handful, have built their own SD-platform from the core, embraced a lot of open source and gone down the path of building own ‘IP’ and lines of code. Cloud Sight, for example, is its own cloud native architecture addressing convergence of network and cloud. Its SDN controller is open source. A vendor-led approach is less risky, but limits a telco’s ability to innovate at a faster pace and in the direction its customers want it to go. Generation old technology in both network and data centers is changing at pace much faster than many traditional vendors’ ability to innovate. Therefore, operators that deploy some of their own capabilities are in a stronger position to support customers with speed and agility, possibly future-proof the business, in the longer-term.