“Redhat is the clear leader for opensource, supporting both Openstack and Openshift, but telcos that need six 9’s of reliability appear to favor VMWare as the supplier of choice for network infrastructure”

VMWare is winning key telco cloud infrastructure projects, including global deals with Vodafone 5G Cloud.  Central to these decisions appears to be reliability and SLA guarantees that VMWare can provide to the telco, for components that are now key to the network. VMWare because it owns its complete capability can give these guarantees; and it can back this with an integrated assurance system, that telcos are already operationally familiar with. Telcos are keen to disaggregate the network and avoid vendor lock in. VMWare has a clear advantage in both enabling the disaggregation of VNFI and VNF management capability from the network functions, whilst at the same time guaranteeing strong SLAs.

Redhat has a big opportunity in telco cloud

Redhat has a big opportunity in telco cloud too. However, its public success is with new telco digital services companies, like X by Orange, where the telco culture of 6 9’s is not so entrenched, and innovation agility is prized by digital services IT. However, these new businesses remain small in scale and, for now, peripheral to the main telco business.

Redhat has developed partnerships with network suppliers, like Ericsson and Nokia, to use Redhat Openstack for telco NFV deployments. In these partnerships the equipment supplier can give SLA guarantees. However, this approach has often clashed with the telcos desire for disaggregation of infrastructure and network functions. Lately, these relationships seem to have lost traction, with Ericsson working with VMWare at Vodafone, and Nokia moving to its own Openstack distribution, citing the incompatibility of their telco needs with a general Openstack distribution.

“When things go wrong I want one neck to squeeze”

The recent network failure at O2 in the UK, caused by an Ericsson software licence key problem, highlights both the continued requirement for a highly reliable network, and suppliers that guarantee that reliability. Whilst the failure was obvious bad news for Ericsson, it also (in a bizarre way) probably strengthened their position as a supplier that could back its capability with SLA guarantees and penalty payments. VMWare may be perceived, by some, as monolithic and less flexible or agile than Redhat; but when it comes to “one neck to squeeze” it wins the argument in a conservative telco operational and procurement culture. Redhat does not offer the same level of ability to outsource risk of failure.

CSP choices?

Appledore’s sense of the market is that, CSPs are going to pick VMware, if reliability and simplicity are important, but will pick Redhat if innovation agility and disaggregation (avoiding vendor lock in) are important.