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PERSPECTIVE
FEBRUARY 2023
analysysmason.com
1
Contents
1. Executive summary 3
1.1 The TCO of on-premises Azure Operator Nexus deployments is 38% lower than that for DIY deployments 3
1.2 Operators can further optimize cloud-native network TCO by using Azure Operator Nexus hybrid cloud architecture 5
2.1 The mobile core is responsible for the majority of operators’ spending on network clouds 6
2.2 Cloud-native infrastructure and automation are key to unlocking the benefits of 5G 7
3. Cloud-native networks are driving a shift from vertically integrated stacks to disaggregated cloud platforms 8
3.2 Vendor-integrated stacks limit flexibility and choice, but retain appeal for certain operators 8
3.3 DIY private clouds require deep pockets to build and maintain 9
3.4 PCPs offer a new approach to network clouds based on their hyperscale cloud technologies and high levels of 9
automation
3.5 Operators must understand the full cost implications of disaggregated deployment models to guide their cloud 10
platform choices
4. Azure Operator Nexus can reduce the TCO of 5G SA network cloud infrastructure by up to 43% compared to a
DIY private cloud 11
4.1 The hybrid Azure Operator Nexus model offers the lowest overall TCO of all scenarios 13
4.2 The cloud infrastructure and operations TCO of the Azure Operator Nexus on-remises scenario is up to 38% l
ower than that for the DIY model due to a reduction in opex 14
4.3 Adopting a hybrid cloud architecture based on Azure Operator Nexus could result in a cloud infrastructure and
operations TCO reduction of 43% 16
6. Annex 23
6.3 TCO breakdown for Tier-1 operator in Latin America for all three deployment scenarios 25
1 Executive summary
The 5G network has been conceived as a core deployments and are looking to
cloud-based network in which all deploy virtualized/Open RANs in the
functions are expected to run on a future must decide on their approach to
horizontal network cloud rather than on cloud-native infrastructure; a holistic
siloed virtualized platforms. Leading total cost of ownership (TCO) analysis is
telecoms operators are beginning to critical.
deploy the 5G standalone (SA) core; this
is a set of cloud-native network functions Analysys Mason, in collaboration with
(CNFs) that will require operators to Microsoft, has analyzed the TCO of
accelerate their adoption of cloud-native deploying a cloud-native 5G SA network
infrastructure. The cloud-native 5G SA using a PCP cloud solution based on
core also requires operators to commit Azure Operator Nexus compared with
to a cloud-first, horizontal approach to that using the DIY private cloud model.
running the network with very high levels The TCO model considers three green-
of automation. field deployment scenarios for the cloud-
native 5G SA core in consumer macro
Cloud-native clouds enable operators to networks, modeled for two hypothetical
adopt open and disaggregated archi- Tier-1 operator profiles (in Western
tecture; cloud-native infrastructure is Europe and in Latin America). In this
sourced independently from vendors’ report, we discuss the key findings of this
CNFs. However, operators must choose analysis (Figure 1.1).
between two main approaches to disag-
gregated cloud deployment. The first 1.1 The TCO of on-premises Azure
option is to build a private network cloud Operator Nexus deployments is 38%
by integrating multiple technology lower than that for DIY deployments
components including compute and
storage hardware, cloud technology Our 5-year TCO model shows that the
platforms, software-defined networking Azure Operator Nexus on-premises
(SDN) and, in advanced cases, orches- scenario has a TCO for cloud-native 5G
tration capabilities. We call this the SA deployments that is up to 25% lower
do-it-yourself (DIY) private cloud than that for the DIY private cloud model.
deployment model. The alternative is to The Azure Operator Nexus on-premises
use the hyperscale-based infrastructure scenario can also offer a TCO reduction
and advanced automation frameworks of up to 38% for cloud infrastructure
offered by public cloud providers (PCPs). (CaaS, PaaS, OS, SDN and cloud
Operators that are planning their 5G SA hardware) and operations, when
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
FIGURE 1.1: OVERVIEW OF THE TCO ANALYSIS RESULTS [SOURCE: ANALYSYS MASON, 2023]
excluding CNF-related capex and opex private clouds and on-premises data
components, which are assumed to be centers, which leads to high operating
equal for all scenarios. expenses in terms of staffing and tools.
Our model shows that Azure Operator
The main driver of the TCO savings in the Nexus’s comprehensive and consistent
Azure Operator Nexus scenarios is the cloud environment, automation
reduction in opex that is enabled by the framework and managed service
more automated and efficient cloud capabilities can reduce the number of
infrastructure and CNF operations that repetitive, time- and resource-con-
are supported by Azure Operator Nexus’s suming and error-prone tasks for the
comprehensive cloud platform and main cloud-native network operations by
as-a-service operations model. Indeed, 58%, resulting in opex savings of up to
our TCO study revealed that the opex 36% compared to DIY private cloud
associated with building, deploying and model. The details of these operational
maintaining a DIY-based cloud-native efficiencies are discussed in section 4.2.
network can be substantial, and
operators often do not have a complete The use of the Azure Operator Nexus
understanding of these costs. Our cloud platform can also lead to a
research and interviews with large Tier-1 reduction in capex when compared to a
operators indicate that operators face DIY private cloud model. Using Azure
major challenges with managing their Operator Nexus’s predesigned and
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
2.1 The mobile core is responsible for on network cloud infrastructure for the
the majority of operators’ spending on mobile core over the next few years.
network clouds
In particular, investing in the 5G SA core
The 5G network has been conceived as a will require operators to accelerate their
cloud-based network in which all adoption of cloud-native infrastructure,
functions are expected to run on a which will need to be operated and
horizontal network cloud rather than on managed using cloud-native automation.
siloed virtualized platforms. It is Network function virtualization (NFV) was
therefore not surprising that mobile core conceived, as far as possible, as an
deployments are the main driver of extension of operators’ existing opera-
operators’ network cloud investments tions, while the cloud-native 5G SA core
(Figure 2.1). Many operators started their requires operators to commit to a cloud-
journey to the network cloud with the 4G first approach to running the network.
evolved packet core (EPC), which is a key Experience with deploying and
constituent of the 5G non-standalone automating the cloud-native mobile core
(NSA) core. Leading operators are now will serve operators well as they move to
beginning to deploy the 5G SA core; the applying cloud-native technologies to the
pace of these deployments will increase RAN in the future.
from 2023 and will drive spending growth
12
10
Spending (USD billion)
0
2021 2022 2023 2024 2025 2026 2027
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
2.2 Cloud-native infrastructure and benefits that operators expect from the
automation are key to unlocking the 5G core, alongside the ability to both
benefits of 5G differentiate and innovate services in
supporting roles and achieve full
The 5G SA core is key to operators’ automation (Figure 2.2).
ambitions to generate new enterprise
revenue growth using advanced services The benefits of scalability, flexibility and
such as network slicing. Operators need orchestration are intrinsically delivered
specific technical capabilities to achieve by cloud-native clouds that have full
network slicing, including the ability to cloud-native automation capabilities.
scale cloud-native mobile core functions Operators are finding that their choice of
up and down to meet the needs of cloud-native network cloud can signifi-
individual customers and to orchestrate cantly influence the performance and
functions end-to-end to create cost of a mobile core based on the level
customized private networks. A recent of cloud-native automation that such an
Analysys Mason survey confirms that environment can provide.
such capabilities are some of the top
1
What are the most important drivers for implementing a 5G SA core, in terms of your commercial model?; n = 68.
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
3.1 Operators must decide how to that is tailored for telecoms workloads,
source cloud-native infrastructure either on- or off-premises or via a hybrid
for 5G private/public deployment model. Each
deployment model (which we call
Operators that are planning their 5G SA ‘single-vendor-integrated’, ‘DIY’ and
core deployments and are looking to ‘public cloud platform’) has benefits and
implement virtualized/Open RANs in the drawbacks, which we will briefly assess
future must decide on their strategies for in the following sections.
cloud-native infrastructure. Cloud-native
clouds are horizontal in nature. They 3.2 Vendor-integrated stacks limit
enable operators to shift away from verti- flexibility and choice, but retain appeal
cally integrated stacks in which network for certain operators
functions are tightly bound to a vendor’s
virtualized execution environment and Single-vendor, vertically integrated
towards open and disaggregated network stacks have remained the predominant
cloud deployment models in which model for deploying virtualized network
cloud-native infrastructure is sourced functions (VNFs) over the past 10 years,
independently from vendors’ CNFs. but they have not delivered the promised
Operators are showing a growing benefits of NFV. Most operators have
interest in building horizontal cloud- experienced minor capex savings from
native network clouds, and we anticipate moving to COTS hardware and little, if
that disaggregated models will account anything, in the way of opex savings
for the largest share of spending on because they continue to operate VNFs
mobile network cloud software infra- as virtualized appliances. However, this
structure in 2024.2 model continues to appeal to operators
because it does not disrupt their opera-
Operators no longer face a straight- tional processes, deployment is quick
forward choice between sourcing cloud- due to minimal integration challenges
native infrastructure as part of a and operators only need deal with a
vendor-integrated stack (the strategy single vendor for maintenance and
that most operators followed in the NFV support.
era) and building private horizontal
network clouds from multiple disaggre- On the other hand, the vertically
gated technologies. PCPs are introducing integrated model has disadvantages for
a further option: the ability to use a operators that want to control their own
version of their cloud-native platforms destinies. It results in vendor lock-in,
2
For more information, see Analysys Mason’s Network cloud infrastructure: worldwide forecast 2022–2027.
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
which can limit operators’ access to the have had to contend with the complex-
innovations and best-in-class functions ities of a disaggregated cloud
that are being developed by a broader environment in which different cloud
ecosystem. Operators therefore have technologies evolve at different rates and
fewer opportunities to differentiate their provide different approaches to
network capabilities and services. automation. Building and maintaining
Operators also fail to benefit from cloud integration and automation across all
economics because every function runs network cloud components (including
in its own siloed environment, hence the network functions) imposes a continual
lack of opex savings. overhead on the operators that take this
route. However, operators that master
3.3 DIY private clouds require deep DIY private clouds believe that they have
pockets to build and maintain a strong opportunity to differentiate their
networks and avoid relying on any single
Operators that want the benefits of an component supplier.
open, horizontal cloud that can support
network functions from multiple vendors 3.4 PCPs offer a new approach to
have traditionally built such clouds network clouds based on their
themselves from disaggregated compo- hyperscale cloud technologies and high
nents, including compute and storage levels of automation
hardware, cloud technology platforms,
SDN and, in advanced cases, orches- PCPs are now entering the network
tration capabilities. Operators have built cloud market and are bringing their
DIY private clouds to support their mobile massive investments in cloud technol-
packet cores and IMS, though few have ogies, automation frameworks and skills
demonstrated that they are disciplined with them. They and their operator
enough to run these and other functions customers argue that cloud infra-
on the same network cloud. More structure is a commodity that does not
commonly, operators have accrued provide competitive differentiation to a
multiple DIY private clouds, each network owner, but that can be used to
dedicated to a single network function. gain large economies of scale. PCPs
offer managed services and very high
Even when operators have managed to levels of automation that minimize the
create a multi-vendor DIY private cloud, challenges of building and operating
they have dispersed its operations among disaggregated clouds. They also offer
multiple network function owners, flexible deployment options: their cloud
thereby perpetuating functional silos and stacks can run on-premises or via a
reducing the opportunities for opex hybrid private/public cloud model.
savings. At the same time, operators
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
Cost/ROI
Immature technology
Robustness concerns
Disruption of migration
Percentage of operators
3
What are the main barriers for implementing a 5G SA core?; n = 68.
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
FIGURE 4.1: TCO MODEL DEPLOYMENT SCENARIOS [SOURCE: ANALYSYS MASON, 2023]
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
Total number of 5G 14 million in year 1 and 50 0.5 million in year 1 and 40.6
connections million in year 5 million in year 5
Attribute Assumption
Modeled network Cloud-native 5G SA functions including AMF, SMF, UPF, NRF, NSSF,
components SDM and policy management
Capex parameters Hardware, software and professional services for CNFs, network
orchestration and element management systems
Opex parameters • Cloud software infrastructure (CaaS and OS) are assumed to be
subscription-based for both the DIY private cloud and Azure
Operator Nexus-based models
• Costs of public cloud infrastructure usage in the hybrid Azure
Operator Nexus scenario
• Support and maintenance for software and hardware components
• Headcount (FTE) hours for Day 0,1 and 2+ operations
• Power and space
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
the same way for both profiles, and labor Azure Operator Nexus scenario. Azure
costs reflect the regional variances for Operator Nexus’s comprehensive and
both the DIY private cloud and Azure consistent cloud environment,
Operator Nexus-based deployment automation framework and managed
scenarios. service capabilities can reduce the FTE
working hour requirements for the main
4.1 The hybrid Azure Operator Nexus cloud-native network operations by 59%
model offers the lowest overall TCO of compared to the DIY private cloud model
all scenarios and can reduce opex by up to 36%. The
operational efficiencies that can be
Figure 4.4The cloud infrastructure and achieved with Azure Operator Nexus are
operations TCO of the shows the discussed in section 4.2.
cumulative, 5-year TCO of a cloud-native
5G SA network deployment for each of The hybrid cloud implementation of
the three scenarios. The overall TCO of Azure Operator Nexus provides the
the Azure Operator Nexus on-premises optimal TCO of all scenarios because it
scenario is 24% lower than that of the enables further capex and opex savings
DIY private cloud deployment for the compared to the Azure Operator Nexus
Western European operator and 25% on-premises scenario by allocating
lower for the Latin American operator. suitable workloads to the Azure public
Opex reduction enabled by the increased cloud. This helps operators to achieve
automation and efficiency of the cloud higher scalability and utilization levels
infrastructure and CNF operations is the and reduce on-premises hardware costs,
main driver of the TCO savings in the as discussed in section 4.3.
FIGURE 4.4: CUMULATIVE, 5-YEAR TCO FOR THE THREE CLOUD-NATIVE 5G SA NETWORK
DEPLOYMENT SCENARIOS [SOURCE: ANALYSYS MASON, 2023]
0 10 20 30 40 50 60
TCO (USD million) Capex Opex
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
4.2 The cloud infrastructure and Figure 4.5 and Figure 4.6 show the cloud
operations TCO of the Azure Operator infrastructure and operations TCO (which
Nexus on-premises scenario is up to excludes CNF-related costs) for the two
38% lower than that for the DIY model on-premises deployment scenarios for a
due to a reduction in opex Tier-1 operator in Western Europe and in
FIGURE 4.5: CLOUD INFRASTRUCTURE AND OPERATIONS TCO FOR THE ON-PREMISES MODELS,
WESTERN EUROPE [SOURCE: ANALYSYS MASON, 2023]
FIGURE 4.6: CLOUD INFRASTRUCTURE AND OPERATIONS TCO FOR THE ON-PREMISES MODELS,
LATIN AMERICA [SOURCE: ANALYSYS MASON, 2023]
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
is highly complex and involves significant approach. Conversely, operators that use
risks. They must also perform their own the DIY model implement fragmented,
lifecycle management, which is vendor-specific platform services and
opex-heavy. For example, AT&T built its tools and manage their lifecycle by
Airship cloud using the DIY model, but themselves. Figure 4.10 provides a
was unable to get it to function like a cumulative breakdown of Azure Operator
public cloud. Other CSPs have employed Nexus FTE hour cost reductions by each
multiple vendors/systems integrators to CNF process.
build their cloud platforms and automa-
tions, but each time they have ended up 4.3 Adopting a hybrid cloud architecture
reinventing the wheel for themselves and based on Azure Operator Nexus could
have built unique cloud automations that result in a cloud infrastructure and
cannot be reused for other functions. operations TCO reduction of 43%
Our model shows that Azure Operator We assessed the capex and opex impli-
Nexus scenario can reduce the opex cations of using hybrid cloud architecture
associated with FTE hours by up to 59%. for a cloud-native 5G SA network (Azure
It can also reduce the opex associated Operator Nexus hybrid), where some of
with cloud infrastructure and CNF opera- the control plane functions (AMF and
tions by 43% in Western Europe and 44% policy management) and management
in Latin America. Most of the opex applications (network orchestration and
savings enabled by the Azure Operator element managers) are deployed in the
Nexus model come from the ability to Azure public cloud and the rest of the
automate and remotely manage cloud network functions are deployed
infrastructure operations, as shown in on-premises in operators’ data centers.
Figure 4.7. Figure 4.8 illustrates the Our model shows that this scenario can
cumulative breakdown of the FTE hour reduce the TCO compared to DIY model
cost reductions. as follows.
In addition to cloud infrastructure, Azure • The overall TCO for a Western European
Operator Nexus can also help operators operator is 26% lower (compared to 24%
with the automated management of for the on-premises model) and the
several key CNF operational processes, cloud infrastructure and operations TCO
especially when the operator streamlines is 38% lower (compared to 36% for the
and simplifies its CNF platform services on-premises model).
environment using Azure-managed PaaS
• The overall TCO for a Latin American
solutions (such as logging, monitoring,
operator is 28% lower (compared to 25%
AI/ML, CI/CD and DevOps tools).
for the on-premises model) and the
Operators can achieve the FTE hour
cloud infrastructure and operations TCO
reductions in CNF operations that are
is 43% lower (compared to 38% for the
shown in Figure 4.9 by following this
on-premises model).
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
Operational Benefits of the Azure Operator Nexus model over the DIY model Potential
process reduction
in FTE
hours
Mean time to Azure Operator Nexus provides closed-loop automation with real-time 80%
repair analytics/AI for the monitoring, root-cause identification and remediation
(MTTR) of the entire cloud infrastructure. This is fully managed by operators in the
DIY private cloud model and requires the equivalent of 7 FTEs’ annual
working hours per year. Fewer than 1.5 FTEs’ annual working hours are
required per year for the Azure Operator Nexus model.
SecOps Azure Operator Nexus provides full security lifecycle management and 70%
expertise including security monitoring, incident response, proactive
identification and fixing of vulnerabilities, roll-outs of security
updates/patches and tests. This requires only around 1.6 FTEs’ annual
working hours per year.
Network • Azure Operator Nexus provides a Day 0 and 1 zero-touch automated 75%
deployment deployment model for cloud infrastructure resources and ensures that
and the correct OS features and firmware are installed and provisioned. In
provisioning a DIY private cloud environment, there are usually many moving parts
that come from multiple vendors and a significant amount of
engineering work is required to deploy and validate the infrastructure.
• Azure Operator Nexus provides simplified and consistent hardware
infrastructure BoM based on a pre-certified design of compute,
storage and networking resources, which reduces the design costs and
risks of inconsistent DIY environments. It also accelerates hardware
procurement.
• Logistics and systems integrator partners of Azure Operator Nexus put
everything together and deliver it to the operator, thereby reducing
rack/stack/cabling efforts.
SysAdmin On-going lifecycle management processes such as server management, 80%
OS/firmware upgrades and patching are delivered remotely by Microsoft,
thereby reducing the need for dedicated SysAdmin FTEs.
Cloud • Azure Operator Nexus provides automated configuration and validation 70%
configuration of cloud software (Kubernetes/CaaS, OS) and hardware resources.
• Azure Operator Nexus includes advanced fabric automation with fully
integrated SDN capabilities to connect physical and logical networks to
the cloud. This is a highly complex process and DIY operators usually
do this in a manual way using spreadsheets and scripts.
CI/CD The coherent cloud infrastructure components of the Azure Operator 80%
pipeline Nexus platform enables streamlined and efficient CI/CD processes that
are supported by Azure Operator Nexus PaaS and CI/CD tools compared
to siloed DIY cloud infrastructure environments.
Monitoring Cloud hardware, software and applications are all in the same Azure 80%
and Operator Nexus environment and come with curated, out-of-the box
observability monitoring and observability capabilities. DIY clouds usually consist of
set-up different set-ups that require manual stitching. This can be error-prone,
slow and costly to carry out.
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
FIGURE 4.8: BREAKDOWN OF AZURE OPERATOR NEXUS FTE HOUR COST SAVINGS BY CLOUD
INFRASTRUCTURE OPERATIONAL PROCESSES [SOURCE: ANALYSYS MASON, 2023]
MTTR
SecOps
Testing and integration
Network deployment and provisioning
SysAdmin
Monitoring and observability set-up
Cloud configuration
CI/CD pipeline
0% 5% 10% 15% 20% 25% 30% 35% 40%
FIGURE 4.9: OPEX BENEFITS RELATED TO CNF OPERATIONAL PROCESSES OF THE AZURE
OPERATOR NEXUS MODEL COMPARED TO THE DIY MODEL [SOURCE: ANALYSYS MASON, 2023]
Operational Benefits of the Azure Operator Nexus model over the DIY Potential
process model reduction in
FTE hours
xNF onboarding • Azure Operator Nexus hardware and software pretesting 40%
and deployment and certification can reduce the effort and costs of CNF
onboarding processes.
• Azure Operator Nexus also works with a large ecosystem of
CNF vendor partners whose CNF images and Helm charts
are onboarded to a standard marketplace catalog and
plugged into Azure PaaS.
SecOps The Microsoft security team performs the full security lifecycle 70%
of CNFs on behalf of the operator and the operator therefore
only needs to allocate limited working hours to oversee the
processes.
CI/CD pipeline Azure Operator Nexus technology (PaaS and GitHub) and 50%
expertise is delivered in an integrated and efficient manner,
whereas DIY environments are usually a patchwork of multiple
pipelines and technology islands, which increases the cost and
complexity of CI/CD pipeline set-ups.
Monitoring and Azure Operator Nexus provides a unified observability platform 50%
observability that includes a coherent set of out-of-the-box components and
set-up a single pane of glass for CNFs and cloud infrastructure. DIY
approaches usually lead to fragmented and complex
monitoring and observability environments that are more
expensive to build and manage. The savings here are lower
than those related to cloud infrastructure because many CNFs
still depend on their proprietary, closed element management
systems (EMS), which restricts the automation capabilities.
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
FIGURE 4.10: BREAKDOWN OF AZURE OPERATOR NEXUS FTE HOUR COST SAVINGS BY CNF
OPERATIONAL PROCESSES [SOURCE: ANALYSYS MASON, 2023]
SecOps
CI/CD pipeline
Figure 4.11 shows the capex and opex • A portion of the hardware infrastructure
savings of this hybrid architecture for a investment shifts from high up-front
Western European operator (see Figure capex to consumption-based opex,
6.6 in the annex for the data for a Latin which delivers an optimized cost model.
American operator). These savings
• The use of public cloud infrastructure
mainly come from the following factors
eliminates the need for overprovisioning
and can potentially be enhanced by
hardware for peak times, which leads to
further optimizing the workload
higher utilization and scalability
allocation by using the public cloud
environment more.
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
FIGURE 4.11: CLOUD INFRASTRUCTURE AND OPERATIONS TCO FOR ALL THREE DEPLOYMENT
SCENARIOS, WESTERN EUROPE [SOURCE: ANALYSYS MASON, 2023]
Capex Hardware (compute, USD11 650 000 USD10 380 000 USD6 520 000 –44%
storage and
network), including
implementation and
integration services
Total capex USD11 650 000 USD10 380 000 USD6 520 000 –44%
Opex Cloud platform USD3 536 842 USD4 502 920 USD3 039 045 –14%
Hardware support USD5 384 784 USD4 779 668 USD2 835 531 –47%
and maintenance
Labor (FTE hours) USD30 850 000 USD12 820 000 USD12 820 000 –58%
Power and space USD1 680 000 USD1 680 000 USD1 170 000 –30%
Total opex USD41 451 627 USD23 782 588 USD26 472 969 –36%
Total TCO (5-year) USD53 101 627 USD34 162 588 USD32 992 969 –38%
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
time- and resource-consuming for many Open RAN need to have a long-term
operators to build and operate cloud- plan to streamline and converge these
native networks on private clouds. clouds using common cloud platforms
Operators need to undertake a detailed and industry-standard PaaS and cloud-
examination of their cloud and data native automation frameworks. Our TCO
center processes and in-house analysis shows that using the Azure
operational capabilities to reveal their Operator Nexus platform and its as-a-
hidden costs and operational service model is a highly cost-efficient
challenges. This will enable operators to way of building new cloud-native
build a more-holistic TCO/business case networks, and operators could consider
based on automation that will guide extending it to other cloud domains,
their technology vendor and cloud including their existing network cloud
delivery model investment decisions. silos.
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
6 Annex
FIGURE 6.1: TOTAL NUMBER OF 5G CONNECTIONS FOR EACH OPERATOR PROFILE [SOURCE:
ANALYSYS MASON, 2023]
Tier-1 Western 13 853 176 23 177 316 33 170 399 42 615 026 50 119 043
European operator
Tier-1 Latin American 466 243 2 657 645 10 954 262 24 541 296 40 633 546
operator
FIGURE 6.2: ANNUAL 5G DATA TRAFFIC (PB) FOR EACH OPERATOR PROFILE [SOURCE: ANALYSYS
MASON, 2023]
• CNF costs are normalized and averaged • FTE-related opex data was collected
from various vendor price benchmarks from Analysys Mason’s survey of five
used in Analysys Mason’s consulting Tier-1 operators that implemented a 5G
projects and regulatory models. SA core using the DIY model. The data
includes the real-life frequency and
• Cloud infrastructure software (CaaS, duration of each operational activity and
SDN and OS) and COTS hardware costs the number of FTEs involved. It has been
are collected and normalized from normalized and averaged across these
various internal sources including five operators.
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
• The lifetime of CNF licenses is assumed • Support and maintenance costs for all
to be 5 years and COTS servers’ lifetimes hardware elements are assumed to be
are assumed to be 3 years. 20% of the equipment costs.
• Cloud hardware installation and • Support and maintenance costs for all
provisioning costs are assumed to be software elements are assumed to be
25% of the total hardware costs. 14% of the software license costs.
FIGURE 6.3: SUMMARY OF LABOR COST PARAMETERS [SOURCE: ANALYSYS MASON, 2023]
Parameter Value
FIGURE 6.4: SUMMARY OF POWER COST PARAMETERS [SOURCE: ANALYSYS MASON, 2023]
Parameter Value
FIGURE 6.5: SUMMARY OF FLOORSPACE COST PARAMETERS [SOURCE: ANALYSYS MASON, 2023]
Parameter Value
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> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
FIGURE 6.6: CLOUD INFRASTRUCTURE AND OPERATIONS TCO FOR ALL THREE DEPLOYMENT
SCENARIOS, LATIN AMERICA [SOURCE: ANALYSYS MASON, 2023]
Capex Hardware USD6 530 000 USD5 440 000 USD3 050 000 –53%
(compute, storage
and network),
including
implementation
and integration
services
Total capex USD6 530 000 USD5 440 000 USD3 050 000 –53%
Opex Cloud platform USD1 656 782 USD2 094 582 USD1 371 717 –17%
Hardware support USD3 003 615 USD2 479 239 USD1 118 739 –63%
and maintenance
Labor (FTE hours) USD15 430 000 USD6 400 000 USD6 400 000 –59%
Power and space USD420 000 USD420 000 USD270 000 –36%
Total opex USD20 510 397 USD11 393 821 USD12 430 164 –39%
Total TCO (5-year) USD27 040 397 USD16 833 821 USD15 480 164 –43%
25
> BUILDING COST-EFFICIENT CLOUD-NATIVE 5G SA NETWORKS: A TCO COMPARISON
Gorkem Yigit (Principal Analyst) is the lead analyst for the Cloud Infrastructure
Strategies and Multi-Cloud Networking research programmes. His research
focuses on the building blocks, architecture and adoption of the cloud-native,
disaggregated and programmable digital infrastructure and networks that
underpin the delivery of 5G, media and edge computing services. He also works
with clients on a range of consulting projects such as market and competitive
analysis, business case development and marketing support through thought
leadership collateral. He holds a cum laude MSc degree in economics and management of innovation
and technology from Bocconi University (Milan, Italy).
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