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IBM, Telefonica to Build Cloud-Based 5G Core Network Platform

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International Business Machines Corporation (IBM - Free Report) has been awarded a multi-year agreement to help in building Telefonica’s first-ever Unica Next cloud-based 5G core network platform using IBM intelligent automation software and services.

Telefonica has engaged IBM Global Business Services — the consultancy arm of IBM, Red Hat OpenShift and Juniper Networks Apstra, and QFX technology — to deploy an open-standard open-networking platform across multiple central, regional, and distributed data centers to deliver low latency and high bandwidth services.

Telefonica expects to increase agility and data security with IBM's large network function ecosystem, Red Hat's vast ecosystem of certified partners, and Juniper's relationships with network function and hardware vendors.

The integration of IBM Cloud Pak for Network Automation software with UNICA Next allows for intent-driven orchestration, supporting the end-to-end lifecycle management of different network cloud elements and network functions, including 5G core.

The deployment of UNICA Next data centers is expected to start in October 2021 and its scalable architecture is designed to address ETSI and other relevant industry standards. Telefonica has already deployed a live implementation using the IBM Cloud for Telecommunications in Europe.

Increasing Adoption of Automation Offerings Boosts Prospects

IBM is focused on improving its AI-powered automation offerings. In June, this Zacks Rank #3 (Hold) company introduced a hybrid cloud AI-powered automation software for telcos. This software can be accessed through the new IBM Cloud Pak for Network Automation, which is engineered to run in a wide range of environments on Red Hat OpenShift. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The acquisition of Turbonomic complements IBM's takeover of Instana for APM and observability, and the launch of IBM Cloud Pak for Watson AIOps to automate IT operations using AI. The company plans to integrate Turbonomic's ARM software with the APM and real-time observability capabilities of Instana and the ITOps capabilities of IBM Cloud Pak for Watson AIOps to help customers assure application performance and minimize costs by driving optimization across development, test, and production environments.

IBM has also collaborated with Telefonica to create a virtual assistant and a blockchain platform based on open hybrid cloud technologies. These solutions will help enterprises streamline customer services and improve how companies trace their assets throughout the supply chain.

IBM’s expanded push into AIOps comes as a growing number of players are adding AI-based automation including Cisco-AppDynamics, Splunk (SPLK - Free Report) , Datadog (DDOG - Free Report) , Micro Focus, BigPanda, Moogsoft, and PagerDuty (PD - Free Report) .

Nonetheless, in addition to improving AI-powered automation offerings, IBM is growing its cloud business. The company considers hybrid cloud to have enormous revenue-generating potential. According to a Mordor Intelligence report, the hybrid cloud market is expected to witness a CAGR of 18.73% over the 2021-2026 period.

However, escalating costs of the hybrid cloud platform amid intensifying competition in the cloud vertical from dominant players like AWS, Azure, and Google Cloud pose a major headwind.

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