Sympathy for the devil – a private 5G story (thoughts on MWC)
This might seem like a cop-out, but the irresistible narrative from MWC over the week, that the grand-standing on the show floor masked (and revealed) a battle between three industries for the soul of 5G, is not quite right. The idea that the traditional telecoms community, whose show this is, is facing-off against mega service providers in the IT and OT domains, plus their go-to-market juggernauts, is not fair. It does the telecoms sector a disservice.
This is the case in terms of its strategic sophistication, enterprise savvy, and inherent value. It is not the case, so clearly, in terms of the cellular tech it has developed – which is where the jeopardy comes from. What was fantastic about MWC in 2022, after three full years without a proper jamboree event (two shows; one cancelled and one diminished) to reset and renew, was that the content in the stands and auditoriums addressed the hype.
Make no mistake; this was a show about enterprise IoT – if cellular-5G is considered as a top-layer stratum in the IoT bedrock that is supposed to stand-up industrial change. It was a show, really, about private 5G; there was relatively little about the fluffier consumer ‘metaverse’. Most of the displays and most of the talk showed the real 5G opportunity, to connect sensors and machines (and workers) inside enterprise environments.
The GSMA could have done better, perhaps, to swap the 2022 tagline, about ‘connectivity unleashed’, with the one from 2019, about ‘intelligent connectivity’ – or to save the 2019 message for next year, or the year after that. It would be a better signpost for the direction of travel. There was nothing in-market in 2019 (and nothing much now in 2022) offering ‘intelligent connectivity’, at least so far as end-users were concerned, and there wasn’t actually any 5G-proper, anywhere.
Of course, the network automation story – apparently inward-looking, about the telco market’s own digital change, with the reinvention of macro infrastructure through cloud-based core functions, disaggregated RAN, and clever analytics software – is important, and might justify the idea of ‘intelligent connectivity’. The irony is this process to containerize and abstract telecoms, to give it some decoupled modular intelligence, has made it anyone’s game.
It makes the forward-path to offer enterprises ‘intelligent connectivity’ in (private) cellular-based networks – there was talk here, in 2022 (from the telco set), about the kind of Release 16 and 17-level control functions that will make 5G an ‘operational asset’ after 2023/4 – a shared journey with (IT) cloud hyperscalers and (OT) automation specialists, in company with well-primed integrators and resellers, flanked also by a coterie of nimble new-style telco vendors.
This was the tale at MWC in 2022, as told by market watchers; but it is actually the same as in 2019, and even before. The difference is that it is alarmist now to tell it only like that – as a struggle for the soul of telecoms, between grey-haired radio engineers in shirts, fleet-footed software developers in sneakers, and hard-nosed industrial operatives in coveralls. If you’ll permit the cliché.
Because no one we spoke with – and nobody, we think – really sees it as a straight battle for supremacy. It is too-easy an analysis. The 5G market that MWC 2022 presented is one of behind-the-scenes… (hold your nose) ‘co-creation’ and ‘coopetition’ – just to set the foundation for everything else that goes on top. It is an application on the edge, in hyperscaler parlance, albeit a functional and differentiating one in certain (probably niche) high-fidelity cases.
The work to set this foundation for change – which will see cellular networking exploded into new enterprise markets, and hence potentially earn the carrier set some kind of return on their (mostly public) infrastructure investments – goes in line with a bunch of parallel disciplines about the tech makeup of the ‘edge’, in and around enterprise premises. This total edge package has to be designed, built, and managed – in all ways, for all enterprises.
A two-speed market has emerged around this process to bundle, at root level, private networking and edge computing, spurred by spectrum liberalisation, and split generally between well-understood enterprise mobility and collaboration tools, plus a smattering of IoT (well enabled with LTE, well extended with 5G) and a more complex vision of industrial automation and control (to be tested with future 5G releases).
Which explains why these twin IT and OT interlopers in the telco space, at a grand level, take different views of the opportunity, with the big hyperscalers hosting stands and the big industrialists walking the halls. Ask the latter group if they think private 5G is a 2022 story, and they respond that it is not even a 2023 story, but a 2024/25 one. They will not sell long-term industrial machinery to customers now if Release 17, with all the magic, is a near-term prospect.
The investment cycle for Industry 4.0 will click into gear, in serious fashion, but not for 24 months. (Even despite the fact the same hype story, differently hued, will play out at Hannover Messe in a couple of months.) Of course, the rest of the tech sector rightly argues that serious-minded Industry 4.0 is being achieved already with LTE, in ports and mines – and, mostly, with the kind of carefully engineered private-edge systems the 5G-lite crowd cannot muster.
Which is why certain vendors and certain integrators have combined in happy-looking partnerships. But operators know all of this, they say. They know there are multiple levers, multiple layers, and multiple leaders; that it will take a combination of talents and technologies, in many cases. That there will be different strokes for different folks. Some others in some other disciplines – working with some operators in some scenarios – say the operators know this, too.
Not all of them know it, but not all of them care; the point is only that most operators with well-oiled enterprise sales divisions, used to serving international enterprises outside of their home markets, and unencumbered by local infrastructure and licences on the international scene (and increasingly at home), are already part of a multi-sided global professional services effort.
This is threatening to unravel, and I have a plane to catch. But the edge networking piece is just one component; its sale and build are less important, or sustaining, than its run. Network operators are network operators, and for certain types of enterprises they offer either a familiar sales channel (for SMEs) or an experienced third-party management facility (for large corporates), and where they do not hold the customer relationship they remain a possible partner for those that do.
And otherwise, in plenty of cases, they won’t feature at all. But does that represent failure? If Vodafone takes a chunk of the automotive sector, or Deutsche Telekom goes hard on manufacturing, or Telstra leads on mining, or Orange (OBS) is engaged by the energy market, and each lets other industrial disciplines find other networking partners for private 5G provision and management, then is that a failure?
No. Because the pie is big enough. Or maybe yes, actually, because the pie is just a pastry crust and gravy, as it is. Someone said, in a white-walled meeting room at MWC, that LTE/5G is a $3.2 billion opportunity in shared CBRS spectrum in the US, but that $15 will be spent on over-the-top software services for every $1 that goes on underneath networking infrastructure. If remembered right.
So the real battle is somewhere else, away from network operators and away from 5G, and is probably already decided. More to write, but no time; I’m on the runway, and the seat-belt lights have gone on.