Summary Bullets:

• Critical Digital Shift: Hyperscalers and data center providers have started competing for cloud networking services, competing for enterprise dollars in space previously dominated by telcos.

• New AI Driven Dynamic: The emergence of enterprise AI is highlighting the importance of network infrastructure and the need to run more distributed workloads, opening new ways for telcos and hyperscalers to collaborate.

Generally telcos and hyperscalers are cautious collaborators. After a brief period where telcos tried to use their pre-existing data center assets to compete in the emerging cloud market, most have decided to move on from those assets. With the emergence of hyperscale data centers, their ubiquitous presence and common operating platforms, they have slowly taken over the market. While some telcos still offer private data center services, most have given up data center assets and instead moved their own IT environments to hyperscale platforms. Some enterprise focused telcos will still function as cloud service providers, migrating applications and maintain the underlying infrastructure they, for the most part, do not own the data centers themselves. While this may be some lost revenue for telecoms, this area was never their specialty.

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