What to say about the state of the private 5G market – about the state of ‘things’, if you like, at the top-end of the IoT game? I was asked to speak for five minutes to introduce the latest Private Networks Forum (PNF), put on by Arden Media, publisher of Enterprise IoT Insights and RCR Wireless. But, again, what to say? And actually, it turns out there is a lot to say. This is a transcription, revision, expansion of the opening address from PNF.
My response is kind of an emotional one – which reflects, I think, that this market is fraught with emotion. Which is what makes it exciting. There is so much in play, and so much up for grabs – and alternately, potentially, so much to lose and to miss out on. This is the case for traditional telecoms players, in particular.
There are lots of stats and forecasts out there; all of them grasping at something. But most of them don’t say very much – at least in the way they are presented to the press. The private networks market is really a part of the much bigger corporate IoT market, and the IoT market has never-ever, I don’t think, delivered on its forecasts. I mean, 50 million ‘things’ by 2020? Well, that came and went. So, you know, forecasts…
It is like the quote about drunk men and lampposts – that statistics are more often used for support than for illumination. And we know the narrative they support, anyway – that private networks are going to be big. Massive in fact, in IoT parlance. So it does not add anything to say, here, that private networks will be worth this much by this point. Because the numbers are different, and all over the place, and we know their story very well.
But two stats, maybe three, right or wrong, provide some illumination about this market. The first is Nokia’s, from four or five years ago, that there are 15 million-odd venues in the world that might benefit from a private LTE or private 5G network – and that this is more than the total number of public cell sites already in existence. In other words, in terms of just radio volumes, this market might get bigger than the telecoms market as we know it today.
Will it be that many, in the end? No, of course not – many easier-going verticals, and many smaller-sized enterprises will be happy enough just to upgrade their Wi-Fi, as Wi-Fi gets better. But if we also accept that private 5G, say, lends itself most exclusively to mission-critical operations, then there are 10 million factories in that count, plus tens of thousands of mines and power plants, plus all kinds of other hard-nosed industrial disciplines.
So if we think just that 5G is made, or will be made eventually, for Industry 4.0, then you have to think the potential market is substantial – even if it is half of 15 million. Which is big business for anyone, even for those skirting around the edges. And you have to ask: how often does that happen? That one entirely-saturated market gives birth to another one, which is brand new, and comparable in size, and maybe even bigger? Never, I don’t think.
Of course, the solution – in terms of features, devices, ecosystem, applications – is not there yet. We know this because there are only about 1,200 private networks in existence. That is what the analysts say. Which is what? A thousandth of Nokia’s total addressable market? So this is early days; the dawn of a new era – even if daylight is breaking across the ground.
The other thing to think about is that the cellular market, in terms of public infrastructure today, has taken 20 years to develop. Private networks will move faster – these are not national infrastructure projects by one or two vendors and one or two operators. This is being designed and directed by enterprises, individually, and in conjunction with an ecosystem of telco and non-telco players. When the solution works, the dominos will fall.
There are signs that is starting to happen – new signs of maturity, with cellular integration with IT, in the form of Wi-Fi, and with OT, in the form of all these layer two industrial protocols; and also signs of scale, with serious-minded installs by the likes of Lufthansa Technik, for example, arguably the seminal case study for private cellular, and many others, and single multi-site orders now going in with Airbus, Dow Chemical, and Schneider Electric.
The other big stat, quoted by Federated Wireless, is that private cellular in CBRS – so in the US, alone – will be worth $3 billion in the next few years. But the value figure, again, is meaningless; the interesting angle is the value-percentage, which says that, for every $1 that goes on 5G in the period, $15 will go on software and services, and whatever edge stuff goes into the mix.
Which tells you that, yes, the private networks market is novel and important, but that it is only the first piece, and only one piece, in the puzzle. It establishes a springboard for digital change, and a much bigger tech-supply story – which will quite possibly recreate and reflect the old telco tale in the rest of the internet market. And the idea of one market giving birth to another is not just about cellular. Because the whole tech world will be reborn out of this.
But the story is better than that; better than a gigantic new tech supply market. It is about an enterprise user market that might just change the world. Private networks have existed forever, but they have opened up to go beyond emergency networks and stuff for rail and the military, and bits and pieces off-shore and on the coast. They have been made different by the liberalisation of spectrum and by new cellular capabilities.
And by the disaggregation of network componentry, and the decentralisation and miniaturisation, separately, of compute, and all kinds of innovation at the edge, and a mad dash to scramble and untangle data in software analytics. But more than anything, the supply-side is so frantic because the demand-side is so desperate, spurred by impatience for industrial renewal and compulsion for environmental change.
So much so that private networks is the big narrative driver at the moment. Suddenly, everyone is writing about it, because everyone is talking about it. Private 5G was the only story in town at MWC in Barcelona a couple of months back; it will be centre stage at Hannover Messe next week. And it matters. This is not self-regarding telco talk about how to optimise big networks to box-shift phones and services. That is all related, but, really, who cares?
For telcos, this is about how to engage with the outside world. For enterprises, it is about how to rebuild the global economy – to make it better, richer, fairer, greener. And for market watchers, it is just a hell of a show. Because fortunes will be won and lost while the world is being remade. At the same time, what is clear is that private networks – scratch that; the whole industrial edge-play – is a team game, just like the low-power end of IoT has always said.
It will not work at scale without open minds and, mostly, open technologies. It won’t work, just yet, by selling boxes into IT departments in enterprises – because the technician or operator in charge of the OT engine room will scratch his/her head, and say: ‘What (TF) am I supposed to do with that?’ If that happens, then the whole supply-side, caught up in its own mythology, will have failed. Like someone (Appledore) said, this requires some kind of a Copernican moment.
The tech industry, and telecoms market in particular, must understand it is not at the centre of the universe. 5G is not the star-turn; it is a dutiful planet (to rob another line), bounded to the enterprise, and buffeted along with a bunch of other technological space junk. And – irony, and double irony – if we believe that technology, properly directed, will save the world, then all these enterprise-suns will be strung-together to make the earth the galactic centre, after all.
The point is only, and simply, that 5G is a good platform for long-sighted digital change, and a useful marketing tool to spread the word. But it is not the solution. It is not the thing to start with. And it will come to pass, when it is well-proven and easy-to-sell, and when its deployment fits the bill, that it is a gateway technology for a bigger fix – and maybe even ‘just another app on the edge’, as the hyperscalers would have it.
The industry is in the ‘build’ phase, right now. Which feels like a brave new world, being mapped venue by venue and campus by campus through a deliberate and careful design phase – which requires suppliers and enterprises to knock heads in co-creation, and to navigate tangles with national spectrum, legacy equipment, a lack of devices, and an ecosystem that is not firing yet. These are the tasks that the captains of industry must tackle.
But Industry 4.0, whatever that is, is not about mega brands like BMW and Bosch. It is about the SME market, which comprises the engine room of the global supply chain. The question is how these enterprises get a handle on it. And as 5G becomes a menu item in the bigger edge buffet, the opportunity for suppliers will be in the ‘run’ phase – and the intrigue will be how that is carved up between telcos, integrators, industrialists, hyperscalers, and enterprises.
The opportunity for enterprises will be to see where else this new combination of connectivity, computing, and analytics – or 5G, IoT, and AI, to reduce it to clickbait brands and acronyms – can take them. To go back to the purpose of writing this piece, what is striking about events like the PNF is what an astonishing job has already been done to understand and resolve all of these challenges – by standards people, technologists, enterprises.
They have done it together and apart, and they have come together in such forums to present their experiences, and share their learnings. It sounds corny, but it is the most important part of this story. And the surest sign that the smartest people are combining to make the best chance of digital, industrial, societal, global change etc.
