Note, this article forms a (concluding) part of a recent editorial report from RCR Wireless about ‘private 5G in Industry 4.0 – hype versus reality’. The full report, which extends the discussion further, is available to download here – for free.
The cultural approach to selling cellular-hinged digital-change has shifted, notably among mobile operators. Asked if closer alignment of its 5G, IoT, and edge componentry in its new structure has helped Verizon Business to better-design enterprise solutions, Jennifer Artley, in charge of its private 5G activities, responds: “It’s less about that. I mean, it’s a lot about that. But it is really about business outcomes.” Which is cultural change, right there.
She explains: “We’ve gone from selling technology to having conversations that bring OT and IT together. And that’s a skillset; that’s a unique skill-set that a lot of general core [network] sellers don’t have. The ability to engage with customers in a different kind of conversation – that’s what has accelerated this.” Which is about zeroing-in on ROI, ultimately. Indeed, ROI is the proof-point for all the other market trends and sales victories discussed in this piece already (see report), including about scaling 5G upwards and outwards with new applications and new sites, and migrating 5G across into parallel sectors and down into smaller segments.
But it is also about effectively mapping use cases to KPIs to business outcomes to SLAs for the first time. “It bodes well for the future, and how the market scales,” comments Stephen Douglas, in charge of strategy at test and measurement company Spirent. Douglas has seen progress with KPIs/SLAs across the company workbenches as 5G systems are integrated with “applications around performance”. As per Artley’s comments, the supply-side is engaged with the buying-side in earnest at last about ‘business outcomes’ and ‘business value’, he says. It is no longer just selling technology, in other words, but rather looking to ‘solve’ problems.
But for this, and to get paid, it needs to prove it can hold up its end of the bargain. As such, the private 5G community is working with Spirent and others to test how to match network KPIs – as delineated by business applications, as dictated by business outcomes, as determined by business problems – to vendor SLAs. Douglas says: “Enterprises don’t care about radio networks; they care about business outcomes, related to operational efficiencies and productivity gains, and things like that. That value discussion has completely changed. It is about how you map those outcomes back into the network. That’s where the bridge is, and what we are seeing more and more. Which is why these SLA-oriented use cases are emerging.”
Interestingly, the disjunct previously was not just about a failure of language on the part of vendors, he reckons; the buyers on the enterprise side struggled to articulate accurately and reasonably what they wanted from 5G, as well. Spirent ran a survey with telecoms consultancy STL Partners about 18 months ago to figure out what enterprises would actually pay for SLAs. “The thing we found was that a lot of them have really unrealistic views about the network performance they actually need. A lot of industrial enterprises, particularly, didn’t have any real evidence that they needed this kind of heightened network performance. It was just a gut feeling.”
The research discovered industrial firms, paying heed to the hype, wanted ‘five-nines’ (99.999 percent) reliability, he says – “when the baseline was a best-effort network that could barely do two-nines”. Douglas goes on: “And it went the other way, too; a lot of telcos, say, were pushing these incredibly low latencies; when most enterprises don’t need latencies anywhere near as low. What they really want is a window of latency, or reliable latency, so they can guarantee a service does not go outside of a median latency range – which networks can deliver already today; just not very consistently. That exercise identified a gap between what is expected and what is needed.”
PARTNERSHIP APPROACH
Again; the price of all the hype. It is good news for test companies like Spirent, of course. “There is a period now where it all has to be tested,” he says, half-joking that operators should take the chance to dictate the terms, before it all unravels. “The problem is a lot of their existing networks are best-effort, and they don’t have clear metrics in place. So they don’t know what they need. And the telcos haven’t been very good at educating them. I mean, I’d almost argue that telcos should go in there and tell them exactly what they need from their networks. They should take the lead. Because if they wait for an answer, they’ll get the wrong one – and the whole process will slow down.”
He adds: “But it’s just an infancy thing; where the market is right now. I am not worried; it won’t stop the growth.”
Indeed, the weirdest thing about the hype-fallout in the private 5G space, in mid-2024, is how half the market is rattled by its failure and half is buoyed, and almost serene, by its progress. It goes back to the comment at the start (see report) by Analysys Mason that contentment in private 5G is more down to the profile of the vendor itself. But something that was striking at MWC 2024 back in the spring was the total absence of the kind of alpha sales talk that afflicted the industry just 12 months prior. Not a single mobile operator talked about ‘priming’ the sales channel; most talked about a mob-handed approach with vendors, integrators, and hyperscalers.
Some, like Verizon Business, are relaxed enough even to acknowledge a lack of deep familiarity with enterprise clients, and to say it would easily stand behind big integrator-consultancy firms when squaring up to them. “It is very old thinking,” responds Artley, when quizzed about the old telecoms cliché (and hype) about 5G as the king-tech in Industry 4.0, and the role of operators to ‘prime’ its sale. “When I got to Verizon [in 2021], guess what the talk was; ‘We are going to prime’. But we don’t have the [customer] relationships. We can’t say we ‘own’ the customer, or even that we ‘know’ it, really. We probably know part of it, but we need partnerships to maximise roots-to-market.”
It seems like a striking volte-face over 18 months. But Douglas is not quite having it; it was only ever a-lot-of-talk, he says, and not representative of the real channel dynamic. He responds: “That whole prime-thing was a bit of an illusion, to be honest. Most engagements involve operators and integrators, side-by-side at the same level. One might shake on the top-level contract, but there are lots of equal partners at the table. And really that ecosystem was already established; I think you’re just seeing more of it. Maybe some of them are backing off, in terms of shouting about leadership and domination. But they’ve realised this is a big market, and there’s enough to go around.”
But “backing-off”, even just in banterous discussion with the press, suggests a more careful and modest approach. Douglas goes on, hitting on a couple of other interesting points, firstly about the importance of public spectrum on the global scene, and therefore of the oft-maligned global carrier set: “The operators have a role, sometimes forgotten, because it all comes down to spectrum access. And in many cases, these deals cross into countries where there isn’t any ‘vertical’ spectrum for enterprises. So it remains heavily dependent on operators, globally. But, yes, it is a team sport.” Briefly, because there is not enough room in this article, public 5G, and slicing of it, is back on the table.
When the private 5G industry was more squarely focused on all-edge systems in conventional Industry 4.0, it seemed like mobile operators were being edited out of the 5G picture in the enterprise market. But as its focus has broadened to capture opportunities in parallel sectors, and as it has sought to connect supply chains between fixed industrial sites, and while on-prem factory installations are generally stuck in-trial, mobile operators have been painted back in. This is another post-hype trend, getting louder – that nationally-available public 5G spectrum will be increasingly brought-to-bear on less-critical ends of the vast enterprise market, and that mobile operators will show their teeth.
This is what the likes of Verizon say, of course. But it is also what the likes of Accenture say . The former has acknowledged in these pages before that it will defer to the latter on the ‘prime’ handshake, on the assumption that Industry 4.0 takes a chain of handshakes to work. Jefferson Wang, in charge of strategy (and private 5G) in Accenture’s ‘cloud-first’ division, says: “If the client wants a reliable on-prem network, and they want to do video, say, then you bring in an operator – because you want localised higher-band spectrum. But equally, there are opportunities just with mid-band coverage in certain countries with industrial spectrum.”
Despite the hullabaloo about mid-band spectrum liberalisation for enterprises in certain ‘western’ markets, the global scene is also very different, the argument goes, and national mobile operators remain the gatekeepers of 5G airwaves in many countries. Which is the China story in a nutshell, of course – as alluded to by Douglas at the start (see report). There is a suggestion, as well, that all-edge industrial 5G systems, completely hived-off from the public internet, and hyped-up as the likelist model for private 5G a couple of years back, are actually quite niche. Wang says: “We are generally talking with clients about more than one use case. Because one use case never drives the answer.”
He goes on: “Maybe the client thinks they can do it all with innovation-band spectrum. But generally, as the business case builds, they need licensed spectrum, as well. I mean Verizon, say, has incredible spectrum holdings in the low, mid, and high [bands in the US]. It is really good at pre-certifying radios and devices onto its spectrum – which is a major part of the whole thing.”
US-based integrator Future Technologies says the same, in line with the multi-tech reality it has created in its ‘living lab’ (see its lab tour at Private Networks Global Forum last month). Peter Cappiello, chief executive at the firm, comments: “Private cellular is an and decision, not an or decision. 5G isn’t everything. But there are reasons to add it – for control, for advanced use cases, for coverage, just for the physics.”
He shows a sales slide (see left), which stacks all the different enterprise technologies – LoRaWAN on top of Wi-FI, on top of fixed broadband, fibre, public cellular. He says: “We show private cellular as this top layer. Because in our minds, we’re layering over the top of what the enterprise already has. We’re not replacing stuff. We’re adding a network to do something very specific.” The point is internet-connected public cellular is there, or thereabouts, just like internet-connected Wi-Fi and internet-separated LoRaWAN; it is just a question of how to divvy-up use-cases across a wealth of networking technologies, and what to put on a shiny-new private 5G system.
APPLICATION ECONOMY
The second point which Douglas makes (seven paragraphs ago; which will see us home) is an allusion to the bigger prize that may yet develop out of this new 5G love-in – where everyone plays a part. Because the ultimate goal of the “team sport” of Industry 4.0 is to spring a new application economy in the enterprise market, and to somehow share the spoils. For telecoms, the great opportunity is about “ecosystem linkage”, says Douglas, particularly with a relatively untapped market for business content – and to deliver in the enterprise space what it failed, so fantastically, to deliver in the consumer space. “The private networks market really needs an app store for each vertical.”
He goes on: “The problem is that developers have been left out in the cold, a little bit. Which is unfortunate… The application ecosystem is the only real weakness [with collaboration in the market]; that’s the gap. None of the players have been able to foster a developer community to serve each vertical with bespoke applications. Which means it becomes a sort-of custom job, every engagement. It is really just about engagement with developers, in each vertical. But the telco industry is not very good at that. It develops these great networks, and thinks everyone will just develop stuff; and they don’t. I’m intrigued to know how the network API initiative goes.
“At the same time, as more private networks are deployed, that ecosystem will develop. It’s a problem just with the maturity of the tech, right? Because it’s still not finished. And if you’re going to develop something, you want it to scale globally. But I’m reasonably positive. 2024 will be a turning point because a lot of Release 16 / 17 equipment will come online, and because of this ripple effect from mega markets like China, which is probably 18 months ahead of North America, if not even two years ahead.”
And really, there’s the whole hype story, right there – such a brilliant destination, and yet such a long road; but also a journey that is gathering pace, probably.
The last word goes to Nokia, just because it has earned the right in the private networks market, and because its perspective is telling. “We were always surprised by the projected hockey-stick curve,” explains Stephane Daeuble, in charge of solutions marketing in the firm’s enterprise division. “When we started in this market, we compared the last industrial revolution, which took 50-100 years. So we don’t think Industry 4.0 will be very much faster – maybe 30-50 years. I mean, the pace is still quick, but it is linear growth. It will take a long time to get to 14 million sites. The whole industry has only done 4,000-5,000, maybe. But you know, we are still seeing 20-30 percent growth, and we are just fine with that. It gives time to innovate, as well. The reality is we are in it for the long run.”
Download the whole RCR Wireless editorial report, private 5G in Industry 4.0, here – for free.
