Swisscom’s Embrace of the Cloud

By Patrick Moorhead - March 1, 2023

On this episode of The Six Five – In the Booth, hosts Daniel Newman and Patrick Moorhead welcome Fabio Cerone, Managing Director for the AWS Telco Industry in EMEA, and Mark Düsener, Executive Vice President Mobile Network & Services at Swisscom.

Their discussion covers:

  • How Swisscom is embracing the cloud, going from telco to tech-co
  • Swisscom’s work with Ericsson test running its 5GC on AWS
  • The considerations and benefits of a cloud-native 5GC, such as guaranteed high speed, flexibility, and power efficiency
  • How this collaboration fits into Swisscom’s vision for their network, and the value it can help them bring to their customers
  • Common misconceptions about moving network workloads to the cloud

It’s a stimulating conversation, and one you won’t want to miss.

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You can listen to the conversation here:

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Patrick Moorhead: Hi, this is Pat Moorhead and the Six Five is live at the AWS Next Level in the Gran Fira in Barcelona, Spain. It is great to be here at Mobile World Congress 2023. And I got to tell you, the excitement is huge here. The crowds are bigger and it just feels like it’s a real uppity type of event.

Daniel Newman: Yeah, it’s palpable how much better it is this year.

Patrick Moorhead: Yes, I know.

Daniel Newman: And we are in the inspiration zone.

Patrick Moorhead: Yes we are.

Daniel Newman: Are you feeling inspired, Pat?

Patrick Moorhead: I am, very much so.

Daniel Newman: I do appreciate having the opportunity. It’s kind of like a lot of noise. You come in here, it’s quiet, but the energy of MWC gets me so excited. By the end of the day though, when you’re done with dinner around 2:00 AM, your head hits the pillow and you’re ready to get up at 5:00. I always say it’s US hours for the work and then it’s European hours for the dinners. But yeah, it’s great to be here definitely.

Patrick Moorhead: And we’ve been talking a lot about network transformation, the value that are bringing the carrier, and also enterprises and new services to end users, kind of the state of 5G of where we are. So that is rife for us analysts. But without further ado, let’s introduce the guests, Fabio and Mark, thanks for joining us.

Mark Düsener: Thanks for having us.

Patrick Moorhead: Yeah, really-

Fabio Cerone: Thank you.

Patrick Moorhead: Really appreciate you coming on the show. And one thing I love about having end customers on the show, it’s kind of the grand purifier between having vendors, industry analysts, right? It’s easy for pundits to say what they do. It- being a vendor is hard. I used to be one, but actually at the end of the road it’s what you do. So we really appreciate you coming. Thank you.

Mark Düsener: Welcome.

Patrick Moorhead: Yeah.

Daniel Newman: Yeah, it’s exciting and it’s one of the themes too of conversations we’ve had here has been about the public cloud’s involvement in the future of telco, virtualization, the Rand, and what’s going to happen. And so having Swisscom here is going to be a great opportunity to kind of dig into this. So Mark, I’m going to start with you. I’d love for you to share a little bit with us about the work that’s being done with Swisscom and AWS.

Mark Düsener: Actually I think it’s two years ago when we publicly launched our corporation, our partnership. And since then we did quite a lot. Mainly we’ve been working very closely with AWS in getting their region open in Zurich, which is right now. And meanwhile we used the partnership in order to train our people because it’s all about change, it’s all about skills. So that was the first step. And now what we are doing is we’re transforming our IT. So everything from ERP systems to BSS, OSS, other IT applications, tools. We have, will over the time get into the public cloud, but not as a lift and shift, but really as a transformational journey. And this is something we are doing together with our partners in terms of upskilling our teams and evolving the cloud, jointly, what’s necessary. And then the next step will be to even move telco workload, 5G core, and others into the public cloud.

Patrick Moorhead: So the big question is, I mean, I think enterprises, it’s very clear why many of them have moved to the cloud, but when some people think of, oh, a carrier and services carrier grade, ooh, the cloud. So why the cloud and why not some other implementation?

Mark Düsener: I think we at Swisscom, we have our customers at heart, right so- and having customers at heart means we’re driving for highest performance. We have one of the best mobile networks in the world, winning a lot of benchmarks. And this is why we thought what’s the next level? And the next level really is about innovation, speed of innovation. The innovation speed within mobile hasn’t been that fast compared to normal IT. And one of the reasons is because the scale that the public cloud can provide hasn’t been there. Another aspect is reliability and resilience. How can we enhance that? And having only an on-prem solution or having a hybrid solution does make quite a big difference in there. And the last one is innovation. I mean, having a partner like AWS with the ecosystems surrounding it, it can and will make a change.

Daniel Newman: Fabio, it’d be great to hear your take too. So it sounds like two years ago, you guys came together and figured out a tie up that the public cloud could really enable the next generation of the offering from Swisscom. But when did AWS know it was ready to really start working with these operating operators and delivering this next level of what they need to move to the cloud?

Fabio Cerone: So we took the decision back five years ago to be really industry focused when it comes to telco because we got a clear understanding that telco would’ve had a strong need for leveraging the innovation of cloud to go to the next level. And it’s exactly what we did with Swisscom. The cloud has demonstrated to be the center of gravity to attract the developers and who generate innovation if not developers? And so if you want to be part of innovation, it’s a kind of a must to be in the cloud and leverage this ecosystem of the cloud. The great thing that happened with Swisscom is that they maintained completely in this value proposition all across the IT and network because they understood more than others and even faster than others, I would say, that doing innovation at a lower cost to get revenues beyond connectivity while transforming the operating engine, leveraging automation makes a huge difference to be a leader in the market or a lagger in the market.

Patrick Moorhead: So in the virtual green room that we had, I think I heard of expression that was going from telco to techCo. And first of all, if the marketing team created that, bravo. I think it’s brilliant, but can you double click on that? What exactly does that- I think I know what that means after working with carriers for 30 years, but can you explain it in your words?

Fabio Cerone: The shift from being a pure telecommunication company that sell what? Connectivity to technology company that sell what? Something that we are figuring out together. But it’s all about going beyond connectivity.

Patrick Moorhead: Apps, experiences.

Fabio Cerone: Apps, experiences

Patrick Moorhead: And outcomes for enterprise customers.

Fabio Cerone: That’s it. And it’s all about making your asset the network consumable to whom? Not only from the usual end users and B2B that we have been used to serve, but to a new category. That again is the developers. Mark and Swisscom and understood perfecting- perfecting at making their network consumable by the community of developers will make a gigantic difference in creating innovation, building use cases, serving new categories. And it’s exactly what they are achieving. And it’s all about making your network your assets, and API away from the community of developers. Can we say that? And so making this shift, suddenly you become a gateway from the end users and a huge community of making innovation happen. That is the developers again. And so this is all about shifting from a pure telecommunication company, selling connectivity to an enabler of innovation, providing the network as a service to that community. We can make many examples of that, but I don’t think we have time.

Daniel Newman: Well, we could hang out longer, but I mean.

Fabio Cerone: You missed the late dinner.

Daniel Newman: Oh no, it’ll still be going.

Patrick Moorhead: We are in Barcelona, doesn’t dinner start at eight?

Daniel Newman: Around here. Eight, Nine.

Patrick Moorhead: But yeah, so it’s interesting though to listen to this. Because I do remember when we first started kind of hearing about public cloud companies and telcos working together, and I know some eyebrows were raised and everyone’s kind of like, as we moved from all the fixed functions to virtualized functions and then dynamic software defined networks and-

Daniel Newman: Carrier grade.

Patrick Moorhead: Carrier grade. And you got to do it a certain way.

Daniel Newman: Work. And so what I’m hearing here is you found a bit of a new way to work together and now it’s been successful. I mean, Fabio, is this becoming the normal? Because it’s very different than what it looked like even two years ago when you first started.

Patrick Moorhead: I’m even shocked at two years, I mean that’s hard for anybody to get anything monumentally done in two years. So I want to hear more.

Fabio Cerone: Swisscom for sure is a front-runner, but I see more and more this happening all across. Essentially we do three things with telcos. We help them out to shift their operating engine to become fully automatic.

Pervasive automation to make prevention, prediction, personalization, the real new way you working. And in doing so, we are caring about the way you guys manage data. And again, Swisscom is a front-runner, but this is happening. How the way you use your data to better understand your customers and to modify the way you interact with them and to become a real data driven company. Point number two is to shift your business model. Again, understanding that you become the center of gravity of an ecosystem where you need to pull developers together with enterprises, together with any users to that together with the cloud infrastructure. And again, AWS can unlock a huge community of developers. Point number three is to jungle market, meaning we go together to the consumer, into the B2B, bringing them new use cases that will for instance, make 5G impactful for those industries, but much more than that. Again, Swisscom has been leaning in on all these three dimensions and is just refreshing to see such thought leadership. But we see this pattern now going across all the industry.

Patrick Moorhead: So Mark, is there any words of wisdom you can share? Not with your competitors of course, but let’s say carriers around the world who are considering how to make that next big jump to cloud. Any words of wisdom that you could give them?

Mark Düsener: I guess there are a few. Depends on what you look at, right? If we start with the IT part that I mentioned in the beginning, we have a fundamental principle when we are approach our customers. And then that is we eat our own dog food. Or the more nicer term is we drink our own champagne. So we go to the public cloud and once we consult our customers doing so, we know what it means, right? So that’s one part. The other part is, yes, there has been, you mentioned that right? Telco grade style. I often refer to that. This is kind of the myth, right? We have this telco myth of five nines. Five nines means we would have an outage of less than five minutes per year. I think no one ever achieved that. And moving from telco, that five nine thing to techCo means everything that can fail will fail. But once it fails, we have a failover mechanism in place. And that is shifting gears. So getting into a cloud native public cloud world with telco workload fundamentally changes the way we operate. Imagine nowadays we, in the classical way, we get maybe a major release for our core once per year. In an IT world, public cloud world, get that on a weekly, daily basis. How do I do that, right? Completely different. But this will enhance quality and speed of innovation.

Patrick Moorhead: So Mark, thanks for sharing those words of wisdom and Fabio hats off to AWS for you’ve made some significant investments to be able to do what you’ve done. Dan and our analyst firms, we recognize that. We write about it. Taking it- the core is important, but also getting the edge and doing some special things at the edge that, quite frankly, at AWS wasn’t doing five, six years ago. So you’ve extended forward and met carriers in the middle like Swisscom. So thanks for coming on the show. Appreciate that.

Mark Düsener: Thank you. Thanks a lot.

Daniel Newman: Absolutely. Yeah, we really appreciate Mark you sharing. And Fabio, congratulations on all the success and thanks for joining us here at MWC. Thank you.

Mark Düsener: Thank you guys.

Patrick Moorhead: All right, everybody, thanks so much for tuning into this episode of the Six Five and the inspiration zone at AWS here in Barcelona. We really appreciate it. Hit that subscribe button. Join us for all the episodes here at the event. But for Patrick and for myself, it’s time to say goodbye. We’ll see you all later.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.