By Anthony Lobretto, 11:11 Systems, Senior Vice President, Network as a Service
For two decades, enterprise IT had a clean division between the two industries, living in harmony. Telecom carriers were the highway that moved your traffic to your cloud. Cloud providers run your workloads at the other end. The two industries operated in parallel lanes with different products, service guarantees and operational cultures.
AI is collapsing that boundary. Hyperscalers need to get closer to the customer to serve latency-sensitive AI workloads, and telcos need to move up the stack to stay relevant as the network becomes software-defined. It’s now getting harder to tell who the carrier is and who the cloud is, and most enterprise buyers haven’t adjusted their procurement, architecture or operational playbooks.
The clearest example comes from AWS, which is one of 11:11 Systems’ partners, and its SiteLink feature that allows enterprises to route traffic between their own data centers across the AWS global backbone, bypassing AWS’s compute regions entirely. A cloud provider is now selling long-haul connectivity between customer sites, directly competing with the traditional carriers. AWS Cloud WAN extends the same idea to inter-region and branch connectivity. A cloud provider is monetizing its global fiber as an alternative to traditional carriers.
The concept flows in the other direction, too. Megaport, a software-defined carrier and another partner of ours, acquired compute platform Latitude.sh for up to $300 million, pairing its network with on-demand GPU infrastructure. A network company bought a compute company to chase AI workloads. Carriers are expanding into adjacent markets as quickly as cloud providers are building into theirs.