The third part in a loose trilogy on the late rise of the IT crowd in the new private cellular space, following announcements by HPE and Cisco at MWC last month, and a direct followup to the Cisco entry a couple of weeks back; here, RCR Wireless catches up with global system integrator NTT, deeply entwined with Cisco, about its developing digital-change consultancy package and the state of the broader Industry 4.0 market.
Highlights include clarification (of sorts) about how NTT distinguishes Cisco and Celona, effectively rival core network offers, in its go-to-market portfolio; they are broadly equal in the market, it implies, on the grounds they integrate keenly with legacy IT systems, but the new Cisco deal (just because its Cisco) gives NTT a clearer impetus to drive scale. Finer subtleties are hinted at in the Q&A below, but the message is it is up to the enterprise.
Parm Sandhu, vice president of enterprise 5G products and services at NTT, skips around questions about HPE and Nokia, without removing them from the table completely. The message is NTT’s portfolio looks full-enough, presently. Beyond this, he sounds suitably bullish about private 5G, as NTT bundles it with cloud/edge services, a developing IoT game, and a global MVNO sister outfit to run Industry 4.0 traffic out onto public cellular infrastructure.
The company has rising momentum on the back of a busy 2021/22, he says, plus stretching internal 2023 targets and a well-rounded change-package to chase them down. All the answers below are from Sandhu. A complementary Q&A session with Cisco is available here; a parallel discussion with HPE, after its headline-grabbing announcement to acquire core network provider Athonet, is available here.
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How is NTT doing with private 5G? How do you assess the mood in the enterprise market, and how is the NTT offer developing?
“We are seeing real excitement. We have deployments in airports, automotive, manufacturing, and more and more systems coming online. Internally, we have very aggressive goals for private 5G in 2023. At the same time, we have expanded our public and private cloud portfolio to include hybrid converged cloud infrastructure on-premise, and developed our own IoT offerings – to build use cases and drive outcomes for enterprises. So all of that is starting to come together. Many of our competitors are just selling connectivity. We are really focused on the value proposition.
“Plus, our business model – network-as-a-service, edge-as-a-service, connected-solutions-as-a-service – appeals to enterprises, especially in the current macroeconomic environment with possible recession, belt tightening, interest rate challenges. Ours is an IT/CIO-centric model, starting to be adopted on the cloud side, which is crossing into infrastructure as well. So traction is good; all of that is resonating with customers. We’re seeing lots of RFPs, and major pickup between the first and second halves of last year.”
And talk a little about the new partnership around Cisco’s private 5G core network offering?
“Cisco brings its core [network] – the management layer for all the SIMs and devices, plus the management plane, control plane, data plane – which integrates nicely with its existing IT infrastructure, including security services, which an enterprise has anyway. Cisco has broad relationships with customers in key verticals around the world, and a strategy to partner with only very-few SIs [on private 5G]. NTT already has a long partnership with it, and we are one of the largest SIs in the commercial sector – and we are also bringing all the cloud services and applications on top.”
And how does the Cisco offer differ from the Celona proposition – which you are also offering, and have a stake in, as well?
“We launched with Celona in 2021, and, yes, NTT has an investment in Celona, too. Celona’s is a fully-integrated solution, right? It brings the RAN, the core, the cloud-based management. It is very much an on-prem CIO solution – where the core is deeply integrated into the enterprise, and runs behind the firewall. It is similar to Cisco’s, which just drops into existing IT infrastructure. They are both equal, in many ways; and both have their own strengths, as well. But lots of enterprises are Cisco shops already, and the partnership with Cisco is a huge one.
“But, really, it is not about comparing A and B, but rather about the solution we bring on top. With NTT, you have to buy the whole solution, end-to-end. Our role is more expansive, as it is with Celona. It is not just simply [that we are selling their stuff]. We are not just an SI; we are bringing the entire solution – all the consulting services, use-case definition, solution development, IoT applications. The core network is just one component in the solution, albeit a really crucial one.”
So when will you go into an RFP and propose an as-a-service bundle that incorporates the Cisco piece, and when will you go with Celona – and when will you incorporate another solution entirely? How do you make that distinction? Is it as much about what fits with existing infrastructure?
“It is always customer driven, and use-case driven. Some customers just want Cisco; some customers are more skilled [and can integrate and manage their own solutions]. Cisco has some key advantages and Celona has some other key advantages, and we try to work around those. But we are vendor agnostic in all of our product offerings. We do Meraki, Aruba; we have Cisco SD-WAN, and Palo Alto, and we have our own. And so on. It follows the same pattern. But Cisco is global, as well – so it has a global customer base, which really opens this up for us.”
Are you addressing Cisco’s existing base with a private 5G upgrade, initially? Or is there a focus to bring new enterprise business?
“NTT is already one of Cisco’s largest partners. We have our own customers, and bring Cisco in; and we have joint customers together, already; and there are Cisco customers which may not already work with NTT. So this gives us scale, right? But the thing is that Cisco’s core is already deployed in many operators. What it has done is to create a micro version, by taking out a lot of telco stuff so it integrates with IT-centric infrastructure. It is not like a telco core with racks of equipment; it runs on a single server and integrates with all their IT and IoT services.
“It works with Cisco’s security and observability, and all of those things. Which NTT already has expertise in. So [this deal] expands our capability. We package it, run it, and operate it… So day-zero, day-one, day-two – we do all of that. And we also package it for our customers in the way they want to buy it, right? They want to buy it as-a-service. So we take all of the Cisco gear, bring in the RAN, and put all of it together, along with the use case integration. It is a much deeper partnership; the same thing with Celona on the other side, too.”
So there is no rule-of-thumb, as it were, to say Cisco’s core is better suited here, for more industrial-grade setups, and Celona is better suited over here, for lighter-touch installations, say?
“No, no. We are deploying both in similar environments. It is not like one is less industrial or scalable. Again, it goes back to the value, and we position both as-a-service or customers can choose to buy upfront; that’s okay as well.”
Is there a deal with HPE in the offing as well, following its acquisition of Athonet? Is that likely or possible?
“I really can’t say. We honestly haven’t even thought about it. HPE just made an announcement [about acquiring Athonet]. So who knows what’s there. But we will come to that. But right now, as of today, I don’t need another partner. My goal right now is to really grow the business [with Cisco and Celona].”
And Nokia? Is there a partnership there which may be made official?
“We do partner with Nokia, sometimes. But there is nothing [formal] to announce. We run into Nokia as a competitor.”
More generally, what has the private 5G piece brought to the table – as part of the developing digital change proposition you are putting together with edge/cloud and IoT components? How does 5G change things for enterprises?
“Different use cases are being enabled. Companies are looking for greater efficiency and productivity. They’re trying to address workforce challenges – staff shortages and staff flexibility – so: how to let people work from home, how to get remote support on site, how to drive automation because workers aren’t available. I mean, you see the job vacancies, even despite the layoffs – there is tremendous investment in manufacturing, for example, to on-shore and near-shore production. And there are all kinds of security and sustainability initiatives, as well.
“So all of that is driving activity. Manufacturing workers need more data, to analyze and drive insights – to drive efficiency and productivity, and mobility and reliability. And they need connectivity to collect data from all those sensors. But the network needs to do more than just bits and bytes; they need different QoS on different applications. One customer is using computer vision on its conveyor system and manufacturing equipment – and training models to monitor output, count products, check maintenance. It is all driven by demand, right?”
You mentioned aggressive targets. Can you say anything on those?
“No, we won’t share that. But this is a major area for NTT. We did a high-level TAM, and we think private 5G in the verticals we are focused on is probably a $5 billion market. So we see a very significant opportunity in this space, and we have set targets around that, starting with very key countries that we think are on the cusp – like the US, Germany, the UK, France – and being very specific and focused.”
NTT’s work with Schneider Electric has been held up, in these pages, as a primary example of how private 5G will scale. How is NTT finding that challenge – to scale private 5G to more use cases within enterprises, and to scale it to more sites across enterprises?
“The issue is about driving use cases. We are very focused on use cases. Our partners will be successful with use cases. Which is why all of my focus is on growing use cases. We have a product called, Network in a Box, which is intended to demonstrate use cases – to quickly demonstrate the value of private 5G to customers. It covers a 5,000-10,000 square foot area in a factory or a warehouse, and allows us to set up a network in a day, literally, for the customer to test out use cases and use-case integration. Use cases are the key to success.”
What’s the big headache with private 5G, and more broadly with cellular-geared Industry 4.0, at the moment?
“So we have solved the challenge of integration with Celona and Cisco; that integration has to work, and has to be easy. Because enterprises want to be sure the system is very solid, and fits with their existing security policies, before granting access to anything. So we have addressed that very well. Another challenge is private/public network handoff. But NTT has its own global MVNO (Transatel), and we have integrated our private network solution for global roaming, as well. Which none of our competitors have. So we can compete with telco solutions on that.
“Beyond integration and roaming, the big challenge is with devices. Most devices work for the telcos, on public networks; getting them configured on private standalone networks – and making them intrinsically safe devices for enterprises – has been hard. But there has been a huge change in the last six months – as more devices have come available, and we have engaged more closely with vendors. We have a strategic advantage insofar as we have vast relationships with device vendors through DoCoMo. So we’re leveraging those to solve the device ecosystem.”
And a word on the MNOs in this space: how are they getting on, and have they got much of a role here?
“They have a very specific model, right? They’re providing connectivity as more of an overlay network. Certain enterprise use cases will clearly be supported by MNOs. So yes, there is a role for them in certain applications. But when you start to integrate more deeply with enterprises – when they want the network completely inside behind the firewall, for example – then it is harder for them. Because their [primary] solution is to offer their public network inside the enterprises mainly for shared and enhanced coverage.
“Which is fine, but enterprises want networks custom-built for their needs. If it’s computer vision, for example, they want heavier uplink traffic – which you can’t do on a shared public network. You can’t, all of a sudden, optimize a public shared network for one customer. That’s where it becomes difficult for telcos, generally. If you just want vanilla connectivity for better indoor coverage, then that’s fine. But if enterprises want computer vision or higher redundancy and SLAs, then telcos are not going to offer that [via public networks].”
