Editor’s Note: With 2013 now upon us, RCR Wireless News has gathered predictions from leading industry analysts and executives on what they expect to see in the new year.
As we’re kicking off 2013, we know this: mobile networks are becoming more capable and agile with the use of macro and small cell networks to better handle capacity requirements for enterprises customers. We are in the midst of a mobile industry in transformation – the most rapid mobile network change we have seen in over 15 years. Mobility and use of spectrum (licensed) is the digital oxygen that drives productivity – our industry’s equivalent to crude oil deposits. Spectrum reuse and targeted capacity using small cells is rapidly becoming the answer to deal with networks at capacity.
We are entering years of mobility and agile network services delivered by communications providers.
But, it’s been a long haul. For almost a decade, enterprise IT has built and managed its own LAN and WAN networks, embarking on wireless to improve office and campus productivity and figuring out unified communication when and where it makes sense. It’s been a costly capital and operating expenditure undertaking. A decade later, as enterprises embark on going mobile, things have changed. Mobile friendly applications are emerging that are making it easier to adapt to mobile requirements. The device eco-system shake-up with iPhone and Android, and the emerging tablet category, is making the adoption of mobility for productivity much easier for enterprise employees and their IT departments. It’s all about reducing capex and having a predictable opex.
Software as a service has been rapidly increasing for the last three years, and virtualized services (VLAN & VPN) are a mainstream pitch by wire line service providers, cloud providers, and system integrators. In simple terms, most non-core functions (to the enterprise) are being outsourced to help an enterprise stay agile and flexible.
In 2013 and beyond, mobile operators have an opportunity, like never before, to become trusted partners to their enterprise customers beyond minutes and megabytes and subsidized devices.
If Apple, Google and the bring-your-own-device and app store world have taught us one thing over the last few years, it’s that status quo is a fait accompli. Art King, in his blogs that should have been named “confessions of an IT professional,” aptly places the enterprise challenges and the opportunities for mobile operators into the context of the IT professional with a three-blog series called “the changing role of the operator”. The net take-away is there’s a role for the mobile operator beyond free devices and long-term promises. Helping to transition the customer from a wireless do-it-yourself world with costly capex and opex investment, to a mobile world with little or no capex and a predictable opex. It starts with reliable coverage and capacity inside to make any and all mobile devices work without any complex clients or cumbersome UC equipment. “Just make it work” as our enterprise advocacy council has said for years. Going mobile (using licensed spectrum) should not be a 9 to 18 month process with a capex of $2 to $3 per square foot. Add Wi-Fi with its headcount/opex and going mobile can easily cost an enterprise $5 per square foot wherever it’s deployed. And keep in mind, that’s just for basic coverage and capacity (no opex services on top). There has to be better way?
Is a managed service in form of SaaS and WaaS important? Yes. More hardware and Wi-Fi vendors will start to offer such services, leaving the door open for fixed service providers to do the same. In December, Meraki was bought for $1.2 billion by Cisco to augment its Wi-Fi and cloud services offerings to enterprise customers. Hewlett-Packard recently announced its FlexNetwork program to offer managed network solutions on a pay-per-use basis, creating new revenue opportunities for communication service providers without capital investment by enterprise customers. This gives enterprise customers valuable options to curtail capex spending. The advantage for the mobile operator is that they can offer a full suite of opex-only mobility services with reliable licensed spectrum coverage and capacity using multi-mode small cell systems that can also deliver WasS, SaaS, security and compliance services mobility applications and cloud services. First to market with MACS has the advantage.
In a recent “A Look Ahead” Forbes article by Eric Savitz, the CEO of Webalo, a provider of enterprise mobility software, stated: “The enterprise mobility market is making that same type of evolution. It is moving from complex, slow, costly tools and processes to disruptive, easy, fast, and scalable contemporary technologies that match the speed of creation and deployment to the speed of business need.”
In 2013, enterprises will have more choices in mobile operators and the ability to curtail capex and service mobility demands. Mobility as a service without the headaches of capex and additional equipment and headcounts to make things work.
Here are some interesting facts and trends to keep in mind for 2013-2020.
1. More mobile devices become available, making the challenges of BYOD, security, compliance and mobile connectivity inside much harder. In 2012, 39% of shipments were smartphones. 300 million smartphones were shipped in the first half of 2012, an increase of 45% year over year. Two billion smartphones will become three billion smartphones within the next 18 months. Enterprises rely on voice and mobility. With up to 80% of connections made inside a building, lack of reliable in-building coverage and capacity will stagnate productivity.
–Decisions to make: a) Do it yourself and become your own mobile operator inside, and make mobility and voice work reliably over Wi-Fi ($5 square foot); or b)partner with a mobile operator that can provide reliable coverage and capacity with no capex and a predictable opex, and fix this problem in days/weeks.
2. Networks are becoming denser. In-fill networks, in the form of multi-mode small cells for outdoor hotspot and inside businesses and large venue deployments, can address coverage and capacity problems more effectively than the previous approach of distributed antenna system, or having the macro network act as the main serving network inside. Today’s situation with macro or DAS serving mobility requirements inside, does not work for almost 80% of business customers (where DAS is not a business option or poor signal coverage and capacity). It’s estimated that an average of 50% of licensed spectrum inside buildings is not properly utilized. By tapping into the underutilized licensed spectrum that resides inside a building, a mobile operator can better utilize its most valuable asset while freeing up macro resources to better service subscribers outside. Offered by the mobile operator, with no capex investments from the enterprise, a multi-mode small cell system (3G, LTE, Wi-Fi) is now available that can scale to support up to 10,000 connected devices in one deployment that only takes days to install. Yes, hard to believe. But, with self-organizing network capability, an operator saves time and money, and a multi-mode small cell network can be installed as easily as a Wi-Fi network.
–Goldman Sachs expects small cells to drive 18% of RAN investment by 2016 – and crucially, that 18% may be able to handle as much as 80% of all the traffic. This is good news for the enterprise.
–Analyst firms such as Infonetics, ABI Research and Informa expect enterprise small cells to be the fastest growing segment of the small cell market.
—ABI predicts small cells for enterprise deployments will catch up with DAS
by the 2016 timeframe reaching the $2 billion mark by 2016.
–Informa’s latest small cell survey illustrates that 97.5% of mobile operator respondents believe that small cells are key for the future of mobile networks. The survey results also show that capacity is becoming a major driver for the adoption and evolution of small cells. Informa’s report estimates that the number of small cells has surpassed six million, while there are 5.9 million macrocells deployed.
3. LTE will start to take hold in the United States and Western Europe. By the end of 2013, it’s expected that as many as 40 networks will have some sort of LTE access in the larger cities. Overall, less than 20% of subscribers will have LTE capable devices, but this is expected to grow to 50% by 2016. It’s important that in-building networks can evolve to support LTE devices, when the enterprise environment is such that a significant number of employees require reliable LTE/3G mobility services inside.
4. Upgrades to existing PBX can be costly from a capex and opex perspective. Mobile operators and the vendor community have options to tie into existing PBX or transition enterprise to a cloud PBX – removing capex in favor of predictable opex.
5. Enterprise network access via smartphone and tablet apps (via application-specific interfaces), instead of VPN access to software platforms, will start to dominate, supported by continued cloud-network services access. More managed services options will be offered by the large network equipment providers (in the business of selling hardware and software to the enterprise), in order to manage diminishing margins on hardware and control the transition to higher margin software services. WaaS with Wi-Fi (little or no capex) has been taking hold over the last two years and will continue to grow.
–Gartner reported that 71% of businesses adopted Saas within the past three years, with three quarters of businesses planning on increasing SaaS spending.
–A Forrester survey shows another reason for SaaS is “business agility.”
As we look forward, we are seeing the emergence of a common service network infrastructure where macro, micro and small cells work in close tandem with intelligent physical and virtual routing of access and services. Network as a service is becoming a reality.
With the proposition of FlexNetwork by HP – we are seeing the beginning of such an opex-like service on the LAN/WAN where mobility services can help the enterprise realize its goals of becoming agile and flexible, and focus on its core business rather than spending too much time and resources on non-strategic network issues.
2013 is the year when enterprise CIOs will demand mobility services from their communications partners as part of a longer-term strategy to lower capex costs and improve productivity and business agility. Mobile operators will start to offer true managed mobility services to the enterprise – starting with basic coverage and capacity, followed by services to include Wi-Fi, BYOD, MDM and PBX integration – offering clientless-UC, access to mobility, applications and cloud-based services.
