Ditching physical infrastructure will save UK telco group BT £2 billion a year and allow it to innovate more quickly, it claims.

Andrew Wooden

May 4, 2022

4 Min Read
BT Tower framed by decorative lamp post
AFW8EW BT Tower framed by decorative lamp post

Ditching physical infrastructure will save UK telco group BT £2 billion a year and allow it to innovate more quickly, it claims.

The deal is part of an effort to move BT’s Digital Unit’s legacy infrastructure and internal applications over to a ’cloud-first architecture’. Doing so will apparently help it roll out a new suite of digital products and services and save it some cash in the process, by reducing costs associated with IT maintenance.

Its part of a wider ‘modernisation programme’ which includes retiring legacy applications, infrastructure, and data centres and moving over operations to the cloud, which the telco group claims will save £2 billion a year by 2024. It’s described as a ‘dramatic simplification’ from the company’s current IT estate, and it says the move will help it be quicker to anticipate and respond to customer needs, and make its applications modular and reusable across the business.

“We have a big opportunity when it comes to modernising our infrastructure, and our collaboration with AWS is a key one for us as we deliver the transformation needed to accelerate BT,” said Thomas Dücke, COO at BT Digital.

Adolfo Hernandez, Vice President and General Manager, Telecom Global Industry Business Unit, AWS added: “BT’s move to cloud-first applications can help reduce IT maintenance costs, streamline operations and help it better adapt to evolving customer needs. Plus, the AWS pay-as-you-go model offers flexibility so BT only pays for the IT needed.”

Basically BT is saying it can be more agile and cost effective by moving its operations over to the cloud. There are no details of how much the deal is worth, but it is stated that ‘over the next five years, BT intends to continue to make significant investments and use of AWS technology to accelerate its digital transformation.’

However there is nothing monogamous about BT’s pivot to the cloud. Last month it announced a five year deal with Google Cloud for a broad suite of products and services, including cloud infrastructure, machine learning and AI, data analytics, security and API management. BT said at the time that rolling out AI and ML across the organisation will enable its customers to make more data-led decisions, and will give BT the means to offer highly-personalised customer engagement and propositions.

BT is not the only telco getting into bed with hyperscalers of course, and the telecoms industry isn’t the only market ditching physical infrastructure in favour of cloud subscription deals. Indeed, AWS in particular is getting exorbitantly rich off the trend, and the the division appears to be propping up the rest of Amazon empire by this point.

The pros as BT sees them are clearly about becoming quicker on its feet, and not having to go through the cost and hassle of maintaining physical IT infrastructure. Which is absolutely fine, but there are downsides as well. The most obvious is what happens when the platform you’ve just parked your entire business on hits the deck in a paralysing outage. This doesn’t happen every day, but it does happen. Each business giving up control of their own ability to stay online has to weigh up the cost to their business and customers a potential outage would cause, however rarely it might occur.

Secondly, once you’ve got rid of your own on premise hardware, there doesn’t seem an obvious way back. Which isn’t a problem if you find the terms and conditions, pricing, and services provided to you by the hyperscalers favourable forever. But what if some way down the road you don’t?

Perhaps a more obscure concern for a firm like BT but one that’s worth mentioning regardless, the precedent has also been set for hyperscalers to kick off companies from their platforms without much notice if they find themselves politically unaligned. Again, you can point to the unlikeliness of this occurring, but once you move your shop to someone’s else’s market, something like this is a risk factor that simply did not exist before.

While BT does seem to be hauling its large frame onto the cloud with gusto, it is at least hedging its bets by signing with multiple providers. Whether this has anything to do with the aforementioned potential dangers which would be exacerbated by being ‘all in’ with one hyperscaler, or down to myriad other imaginable business reasons, we have no way of knowing.

If you do want some insight into the inner workings of BT and some good general telecoms chat besides, check out our recent podcast with BT’s Chief Architect Neil McRae.


Get the latest news straight to your inbox. Register for the Telecoms.com newsletter here.

About the Author(s)

Andrew Wooden

Andrew joins Telecoms.com on the back of an extensive career in tech journalism and content strategy.

You May Also Like