The private 5G market – or at least the hard-nosed Industry 4.0 end of it – has reached an “inflection point”, reckons global system integrator Kyndryl. So much so, the firm has had to move hard to keep up with demand. “Our biggest concern is to support all the opportunities – as opposed to just developing more of them,” reflects Paul Savill, the company’s global practice lead for network and edge, speaking with RCR Wireless at MWC last week.
MWC is different for Kyndryl this year. Where it was a new face in 2022 – a well-experienced infrastructure services outfit, recently split from IBM, with a new brand, a lighter step, and a keen vision for industrial cellular – it has had 12 months in-between to see how the reality measures up. And it measures up well, says Savill. “I am even more bullish this time because we’ve had a tremendous year – building the funnel, signing contracts, deploying technologies.”
Its work over this period has mostly been with Nokia, which was quick some years back to organise strategically around private cellular as a differentiated and differentiating proposition, and has been quick over the last year to develop delivery channels to get it sold and make it work – including with Kyndryl, which claims 4,400 enterprise customers, including 75 percent of the Fortune 100. “We have reached an inflection point,” says Savill.
Kyndryl has signed over 100 customers for private 4G (LTE) and 5G installations over the last 12 months – including Dow Chemical, which is among the first enterprises to properly-scale a private cellular solution into multiple international sites and, by degrees, into multiple different applications. But Dow Chemical is only the highest-profile of its public references. Kyndryl has signed with others, says Savill, including for similarly-sized (maybe bigger) rollouts.
He comments: “There is a process with these companies. They do a quick test of the tech to make sure it works, and then they test the use case to make sure it generates the right economic benefit; and then they expand two ways – with additional use cases, and with additional sites and markets. And that is a whole process. I can’t say whether Dow is the biggest, but other implementations are just as big, and potentially bigger.”
All these others are under PR wraps, still. The Dow deal has precipitated a flurry of activity with chemical companies, suggests Savill; a couple of announcements are due, at some point, he says. “Ninety percent of the opportunities are in industrial environments – manufacturing, petrochemical, mining. It is a pretty broad segmentation, but they tend to be large environments, often many square miles, featuring some kind of heavy mechanical operation,” he comments.
As it goes, Kyndryl does more business in the banking than anywhere else; healthcare is a major deal for it too, says Savill. But the industrial-grade wide-area appeal of 5G is felt most keenly in tougher climes. “People are flirting with it to figure out how it will make a difference for them. So we’re having conversations in every segment. But the most progress and the most deals – and we are closing every month now – is in those big industrial environments.”
It is a little curious, because there is discussion – out there, somewhere, in the whispered talk in shiny halls at MWC (one imagines, because one couldn’t attend); certainly down the phone since last summer – that private 5G has been slower to land with enterprises; that devices and features are missing, and investments are hard to square. Savill says this is more likely a reflection of the failed appetite for hybrid ‘private 5G’, as promoted by mobile operators.
“That slowness is more about the adoption of public MEC, where telcos are opening their metro edge for multi-tenant usage, and offering dedicated channels over a shared public network – as opposed to private 5G with a completely private-edge compute stack for whatever the enterprise wants to put on there. Public MEC was expected to go faster, and private 5G was to come further down the road. So maybe it is just that private 5G has made more progress.”
Kyndryl has edge/cloud deals with Softbank and Vodafone, notably, to support their multi-access edge compute (MEC) offerings, as platforms to deliver digital change services at closer quarters for enterprises. Does Savill think the carrier community, at large, has started to come around to this Industry 4.0 view, that cellular should, for critical industrial cases, take up a standalone position – on site, on the premise, at the far edge.
“Yeah, I think they understand that dedicated private 5G is important to many customers, particularly in the industrial space where there is high regulation and a high bar for performance – that these networks should be completely controllable by the enterprise, and not shared in any way with anybody else in those situations. They recognise that is a bigger part of the market than it was expected to be a couple of years ago,” he responds.
“The other thing [the market now understands] is about the integration aspects of these networks – downstream into the OT side and upstream into [IT-geared] cloud connectivity across all these places for data analysis. That all has to work together to create value. Saying to an enterprise you can provide a private 5G network is not enough; it does not create any value for enterprises. Which is why the system integration aspect is so important.”
This is why Nokia has engaged Kyndryl – and re-engaged with it ahead of MWC, so thy can redouble their sales and marketing efforts. At MWC, Kyndryl has a residence on a corner of the Nokia stand. “Nokia has a beautiful booth, by the way.” Its demo shows an “integrated way” for enterprises to manage contractors on a private network – to “onboard them for security, track the work they do, and remove their clearance” after they are done.
“That process might have taken a couple of days before; now it takes minutes,” says Savill. So what of Nokia, and the new Nokia deal? Is it just a reaffirmation? Does Kyndryl expect to work with its peers and rivals, at some point, to be able to offer a selection of private networking gear? Maybe, some day, responds Savill; but it might as well be an exclusive arrangement for now, just because they like each other so well.
He says: “There is no exclusivity, either side. But we have had such success over this last year – in terms of building opportunities, winning deals, expanding deployments; going from funnel creation to revenue creation – that we’ve doubled-down with new certifications, a joint innovation lab, a faster way to deploy demo kits to prove the technology. So Kyndryl is not going to shut the door on other vendors, but we are really focused on Nokia right now.”
Is the new arrangement with Nokia about staffing the opportunity, as well – as referenced at the top, about keeping up with demand? And what does that additional resource look like, for a global business with 90,000 staff already? Is it about sales or integration, or about radio knowhow on the ground in all your territories? “Yes; so this is a relatively new area – in the sense kids graduating out of college don’t have the skills to deploy private 5G,” responds Savill.
“It is a booming space so there is high demand for talent. The challenge is to keep up with the opportunities – and to quickly deploy technical professionals in every country we operate in, for every opportunity we’ve got. But we have the capacity, more so than than most any other company. And it was part of the joint announcement – to train and certify staff in the Nokia technology on our side and to invest in co-marketing efforts together.”
So what about Kyndryl at MWC 2023, in the adopted home of telco, compared with last year? How does Savill think the perception of the firm has changed over the last 12 months? The response is boilerplate stuff, but it is boilerplate stuff that sounds different and important. “I think people are looking at Kyndryl as a trusted advisor and integrator for these technologies in mission critical deployments,” he says.
“We have decades of experience managing critical infrastructure for clients across the tech stack. And private wireless is now part of that – and in industrial spaces like mining and manufacturing, it is mission-critical. If it goes down, it creates serious problems – worth hundreds of millions of dollars, potentially. So it has to be completely bulletproof. And Kyndryl is emerging as the one to make it so.”
