Private 5G will ‘eclipse’ traditional telecoms – Quortus on its first 2,000 networks
“It will take time, but this provision of untethered enterprise value will eclipse the standard consumer telecoms market.” So says Mark Bole, chief executive at core networking provider Quortus. It sounds almost fanciful, that such a global infrastructure might ever be doubled, and even redoubled, but it only what the rest of the market is starting to say. Spending on private and shared enterprise networks pegged to surpass spending on public cellular networks in about 15 years.
Bole knows the forecasts, available from just about every analyst house; they all point the same way, he says. “Depending on where you go, it’s a $20 billion market for services and other things, potentially, or $5-$6 billion just for pure infrastructure, in a few years. It’s starting small, but, however you look at it, it is high growth – and already growing fast.”
If you want the current ‘law’ on private cellular, you could do worse than go to Quortus, and to Bole. (The question should be, rather, could you do better?) The UK-based firm has deployed no fewer than 2,000-odd times, and counting. Nokia, arguably the fiercest of the old telecoms set in the new edge-networking arena, counts 260 for some combination of radio and core networking, typically badged as ‘critical-grade’ at the bottom of its press notes.
It’s not an easy apples-for-apples comparison, as Bole points out; Nokia is counting customers for private deployments, and is generally installing larger-scale systems, whether for campus-wide private wireless or standard-duty public usage. But either way, Quortus has deployed more, says Bole, and the volume speaks of the business his firm, only a decade old, is currently writing.
It also reflects the company’s position in the nascent private cellular market, however share is defined. Bole comments: “Even Nokia or Ericsson [have not done that many]. Of course their cores are bigger, because they’re doing it for tens of millions of people, rather than tens of thousands. But just the experience of having deployed 2,000 systems creates a lot of value when it comes to the next enterprise wanting to deploy something.”
It is worth hanging on his words, some, about this upstart section of the telecoms world; his perspective stretches back 30 years, at least, through the salad days of cellular in the 1990s, including major roles at the Finnish firm itself (“the good years for Nokia”), running its operations, variously, in the UK, China and Southeast Asia, and Western Europe. When he joined Nokia, cellular network revenue was “in the order of $10 million,” he says.
“The president took me aside, and said, ‘It’s great you’ve joined the telecoms business, but you need to understand we make more profit out of toilet tissue’. That was the late 1980s.”
But times were fast-changing; Bole’s stint in charge of Western Europe at Nokia coincided with the industry’s ‘duopoly review’, when airtime licences were multiplied in every market and network equipment was going hand-over-fist. “One deal now would be bigger than that entire market 20 years ago. But it was interesting-times, seeing how operators were deploying services,” he says.
With 3G on the horizon, and the mirage of a ‘mobile internet’ in sight, Bole moved with Nokia to the US, where he was involved in the company’s acquisition of various “non-telco” Silicon Valley-style startups – “to understand the internet for advanced GPRS-type services”. By the time he left Nokia in the early 2000s, the firm had passed $1 billion in annual revenue.
But his brushes with the internet boom in the US showed him a more direct kind of ‘customer-centricity’, which the telco set have arguably struggled to match ever since. “They were so much closer to their customer, and [revealed] a more exciting aspect of business to me. So I cashed out, and became a serial CEO. This is my fifth startup.”
He counts the others off: Swedish software firm Incomit, now part of Oracle; UK mobile data transfer firm Shozu, sold to Critical Path in the US; UK-based Big Mouth Media, the biggest mobile marketing business in Europe at the time, now part of Publicis; and Australian radio filter maker Mesaplexx, acquired by (you guessed it) Nokia in 2014.
The Mesaplexx deal saw Bole rejoin Nokia, to oversee integration of the new unit into its xCube Technology activities. He reflects: “I’m not the kind of person you want in a big company; I look for change and ways to disrupt [the market]. But, Nokia insisted, so I ran its radio business for a couple of years. Once I got the ‘earn-out’, in 2017, I left – and looked for a smaller player, wanting to grow quickly and strongly.”
Which is where the story snakes back to Quortus, Bole’s “fifth startup”, and a business already making a reputation (since 2009) with a converged evolved packet core (EPC) product for multiple radio access technology (multi-RAT) compatibility. Quortus remains one of the few providers of cellular core networks for private enterprise setups that offers 2G, 3G, and 4G-LTE compatibility, reckons Bole.
“Many carriers, still today, have more interconnect agreements on 2G than on 4G. A large number of our deployments use elements of 2G and 3G as part of a complete package. A pure 4G-only play restricts certain things – voice, for instance. Unless you run voice-over-LTE, you need a fall-back,” he comments.
Prompted to distinguish his firm from its peers in the private networking space – a logical grouping includes Athonet, Druid Software, Metaswitch – he responds: “There are generic differences and specific ones. Generically, we go to market through system integrators (SIs), and not against them. We are not selling directly to enterprises, where some others are mixing it up. The SIs are not a means-to-an-end for us, but partners to scale the whole ecosystem.
“The other thing is this multi-RAT piece, which has been a big investment over the last decade. Several of those companies have come to us. The fact we support 2G and 3G fallback and integration on an LTE core, and now 5G as well, creates capabilities most enterprises don’t understand at first. Because they don’t ask for it – for 2G fallback, say. Because they just want to be able to do certain things. But they need some of this [capability to achieve that].”
There are other differences, he suggests. Quortus’s core functions can be embedded into a chip in the cellular radio – “from Nokia or Acceleran, or whoever”. He says: “We can run on an Arm device that fits into a coffee cup, or on-premise, or in any virtual system – whatever the IT department wants.” Plus, he says, the company is not fixated on cellular; notably, it is pitching Wi-Fi 6 and Wi-Fi 7 alongside. “It is not binary; it depends on the use case – WI-Fi makes sense a lot of the time. But it is a case of both/and, and not either/or.”
Pressed again on market share, just to frame the new edge-networking picture, Bole assumes a diplomatic position against perceived vendor rivals like his old employer, chucking-out releases about tie-ups with various high-tier industrialists. But he is robust at the same time; Quortus has well-grounded technology, a well-funded gameplan (including a new strategic investment round, completed mid-lockdown last year, led by NASDAQ-listed edge-IoT hardware provider CSI and UK-based telecoms firm cellXion), and well-mapped channels to market, he says.
“I think market share is a misleading thing to talk about in a market that is still quite immature. Different players come at this from different angles – to achieve different things in different markets. What Nokia is doing with these large factories is great. But that is not our market; we don’t compete with Nokia in those sorts of cases, and we rarely come across it. Because Nokia’s focus is not on SIs, certainly not at the moment.”
He goes on: “We are focused on where we think we will be among the top-three players – markets that are defined by a set of customers with a common set of requirements, which we can serve better than others. It is not a homogeneous market, which will be carved up one way. [And] we are not building a sales organisation to go to enterprises – which would be a huge undertaking – but a platform for specialists to take to their vertical markets.”
There’s the rub; it is an argument that goes against most of the traditional telco community, at present, which appears for many market watchers to be approaching Industry 4.0 like it can solve industrial problems just with telecoms knowledge. For Quortus this rarefied ‘vertical’ knowhow is played out sector-by-sector, sometimes region-by-region, through a select band of SIs.
These include, among others: industrial IoT engineering firm Council Rock, focused on gas and electric utilities in the US; Intel-owned multi-access edge compute (MEC) provider Smart Edge for temporary installations (such as sporting events like the PGA Tour); tech company and defence contractor L3 Harris in the US; and UK managed service provider CSI, involved in the firm’s recent investment round.
It is also working with more traditional channel partners like Fujitsu in Japan and the US, and lesser-known outfits like the Utah Education and Telehealth Network (via provider TLC), deploying private LTE in local school and university campuses, and for remote community healthcare. “Our emphasis is private wireless, and making that simpler to deploy and easier to manage,” says Bole.
The subtext is that Quortus knows what it is good at, and is sticking to it; that specialist providers in each sector are already accomplished at serving enterprises, and that, armed correctly, can offer private cellular systems appropriately, alongside a well-stocked armoury of complementary networking solutions. The subtext is the old dogs of telecoms are kidding themselves if they think they can do it any other way, except via well-chosen SI partners.
The conversation crosses into the kind of industrial-grade service-level agreements (SLAs) that are going to underpin the provision and management of private enterprise networks (explored in a recent Enterprise IoT Insights report on the same subject).
Bole comments: “The challenge for a telco is to manage thousands, tens of thousands, different SLAs. Because SI channels are dealing with particular verticals. The challenge for the telcos is not just to learn to deal with enterprises, which is new to them, but to learn how to deal with them in lots of different verticals. Whereas, if you look at our partners, they are dedicated to certain verticals; they know them intimately already.”