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Telefonica Builds an Intelligent Cloud

Obstacles in Traditional ICT

Telefonica, one of the world’s largest telecom operators, provides a variety of services that combine voice and data. Beginning in 2010, Telefonica considered optimizing their core businesses by migrating the entirety of their global business activities into the cloud. After several years of driving the initiative for new cloud services, such as Virtual Desktop Infrastructure (VDI) and Software-as-a-Service (SaaS), was halted due to the prohibitively high cost of managing a traditional telecom business.

Although a portion of Telefonica’s IT infrastructure had already migrated to the cloud, its organization was structured in silos. Each business unit was built, maintained, and managed independently, with relatively closed business models. Each country market was managed and marketed individually, with no dependency for interacting with other affiliates. At the corporate level, it was clear that this model resulted in wasted resources and higher than necessary operating costs.

“All IT, All Online”

The obstacles of maintaining the traditional telecom business models could not be resolved by simply upgrading IT silos or introducing virtualization. In fact, doing so would result in added complexity for management. After considering all factors, Telefonica designed an “All IT, All Online” strategy, which is defined as the gradual migration of traditional telecom business systems (closed, custom Communication Technology systems) onto x86 servers; then, consolidate all resources into a physically decentralized cloud architecture with a centralized pool of logical resources.

Similarly, the “All Online” part of the strategy puts automated processes in place through the use of a unified management platform that provides a centralized service portal for internal and external customers. The results are streamlined organizational processes for implementing service provisioning, quality assurance, and operations.

Telefonica has broken out the strategy into the following steps:

  • Consolidate data centers — Using only two types of data centers: one for backup and global applications and the second for online business services.
  • Build cloud-based IT infrastructure — Including all HR resources, physical and virtual infrastructures, and hardware and software resources in a centralized resource pool.
  • Implement Everything-as-a-Service (EaaS).
  • Automate services — Including modules for billing; asset, configuration, and software license management; change and release management; service console and service level management, and others.

An OpenStack Infrastructure

Telefonica set up a new ICT infrastructure, called UNICA, using an OpenStack-based cloud operating system which incorporated all the hardware and software required for intelligent, automated operations and management. Telefonica’s Global Chief Technology Officer Enrique Blanco Nadales said, “The UNICA infrastructure, including Software-Defined Networking (SDN) and Network Functions Virtualization (NFV) components, lays the basis for implementing our future network transformation. Together, these technologies play a significant role to simplify Telefonica’s infrastructure architecture for improving efficiency and reducing costs.”

In July 2012, Telefonica and Huawei began joint planning and verification for the use of Huawei’s distributed cloud data center to meet the requirements for Telefonica’s “All IT, All Online” strategy.

At the February 2014 Mobile World Congress in Barcelona, Spain, Telefonica and Huawei announced that a Memorandum of Understanding (MoU) had been signed to promote and deliver the commercialization of a corporate-wide cloud computing infrastructure. Based on the successful completion of Proof of Concept (PoC) testing for Phase II of the UNICA project, the MoU specifies the commitment by both parties to deploy Huawei’s distributed cloud data center, including purpose-built ICT technologies and a custom OpenStack cloud operating system that incorporate components for SDN, NFV, and data center management.

Agility and Efficiency

With Huawei’s assistance, Telefonica launched Huawei’s Value-Added Service (VAS) Cloud-over-UNICA solution commercially in its United Kingdom subnet in July 2014 — making VAS components such as Short Message Service (SMS), Multimedia Messaging Service (MMS), and IP Short Message Gateway (IP-SM-GW) integral features of the UK cloud network.

Following the deployment of Huawei’s VAS Cloud over UNICA Solution, Telefonica-UK has seen an estimated 30% decrease in Total Cost of Ownership (TCO), with particular emphasis in the areas of Operation and Maintenance (O&M), business management, and service governance. The centralized, unified resource management pool resolves a wide range of issues raised through the use of country-specific IT silos. The benefit for Telefonica is an increase Return on Investment (ROI). For the Telco industry in general, Telefonica provides a successful example to all other telecommunications companies who may be planning to migrate their business networks to the cloud.

By Zhang Dazhen

Senior Consultant, Huawei Cloud Computing