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Global telco cloud revenue is forecasted to reach $29B by 2025 – the most recent report suggests

According to a research on global telco dynamics, cloud revenue undoubtedly has potential to reach $29.3 billion by 2025 with the five-year CAGR of 27%. This is pretty optimistic considering this year’s level of $8.7 billion. 

Answering the question “how is this possible”, authors mention virtual network functions (VNFs), Management and Network Orchestration (MANO) and cloud-native functions as the main revenue sources, making clear that the growth will be secured by the cloud infrastructures. Currently, major players are trying to make the process of VNFs onboarding as a part of implementing NFV (network function virtualization) as easy as possible. Other current efforts are focused on replacing virtual machines with containers in order to enable container network functions (which are, obviously, cloud-native). While the shift is still in the process, most industrial players admit their plans to use hybrid models to extract value and stay reliable at the same time.

The split of the forecasted revenue of almost $30 bln. by the regions is the following: $10 billion in North America, $9 billion in Asia-Pacific (APAC) and $8.2 billion in Europe.

Among other factors listed in the research implications, one can find a clear change within telecom value chain, where operators were introduced to a way new model of the cloud deployment – through combining different vendors’ components. This multi-vendor approach decreases dependency on a particular vendor and, instead, allows them to find the opportunity which is a better fit for the environment they build. Telecom giants find it more beneficial to partner with several cloud providers at the same time to bring on variety in the services they offer to the end-users. The pitfall here is if the necessary level of inner coordination can be built within these newly emerged ecosystems, which involves aligning of the processes on the stages of design and planning. 

Another matter of interest is the place that 5G is going to occupy by 2025. Here the researchers found evidence of reaching $8,9 bln at a shocking CAGR 76%. This definitely could be true regarding the scale of the deployment measures that started not that long ago.

To give a final comment on dynamics of cloud-based solution, the authors conclude that the growth rate is high but still not overevaluated due to the following factors: firstly, enterprises interested in investments are not limited to any segment as the barriers are blurred or just absent sometimes, and cloud projects are widely available to giants, and secondly, the benefits of the telecom cloud applications can bring such a high value of ROI that has been never seen before.