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5G Activities at Hannover Messe |
NEWS |
Hannover Messe is the largest trade fair for the industrial technology market, attracting hundreds of thousands of visitors every year. It is the trade fair where industrial technology leaders announce new products and where the whole industrial market converges to discuss new technologies. This year, there was a new technology being discussed throughout the fair: 5G. Contrary to last year’s show, 5G was a hot topic of discussion and the fair organizer even deployed a private 5G network for technology demonstrations in Hall 16, where the 5G Arena was hosted. This network was powered by Nokia’s 5G basestations and was running at 3.7GHz. Qualcomm provided the chipsets and modems.
The 5G technology demonstrations at Hannover Messe were far from what is considered typical in the telecoms domain. In fact, almost all exhibitors were discussing different use cases for 5G. Some examples were:
A unique trend across all these use cases was that they were all somewhat different, contrary to the telecoms domain where use cases are similar in terms of network requirements. In fact, most companies exhibiting in the 5G Arena were interested in and testing different functionalities of 5G that addressed their requirements specifically. This is in stark contrast to the telecoms domain, where cost efficiency and market inertia are built through economies of scale and a few large use cases.
The Industrial Market Creates 5G Innovation before Telecoms |
IMPACT |
Hannover Messe illustrated an important and crucial culture gap between the manufacturing and telecom worlds. On one end, mobile service providers and the telecoms technology supply chain operate on a “build it and they will come” model. They have been building networks, predominantly for the consumer market, without knowing what services will eventually run on them. This has led to success in the consumer market with mobile broadband, but on the other hand, they have failed to capture added value that was created on these network platforms (e.g., app stores and social networks) and were disintermediated and became a utility.
On the other hand, the industrial sector requires tailor-made solutions that will not necessarily allow mobile service providers and technology suppliers to create the necessary economies of scale they have been accustomed to. For example, some industrial clients may need stationary 5G connections for cameras, some may need outdoor or indoor campus 5G networks for AGVs, and others may need deterministic networking features for machinery. Moreover, each factory floor will be significantly different than any other, , a sheet metal manufacturing plant will be different than a chemical raw material processing plant and, in some cases, factory floors within the same industry will be drastically different.
Despite these restrictions, industrial Operational Technology (OT) suppliers were adapting Qualcomm’s 5G modems and Nokia’s network to solve their problems, rather than waiting for the telecoms technology supply chain to finalize the standard and prepare “industrial-grade” 5G products. In a way, industrial companies are innovating for 5G now, before the telecoms market itself. This creates a problem for mobile service providers and vendors, as they will be faced with myriad applications and potentially a very long tail of use cases when they decide to get serious about industrial 5G. This means increased fragmentation and lower profitability in favor of a high number of industrial use cases. The telecoms market must get serious about industrial immediately and start speaking the language of manufacturers. For example, mobile service providers and vendors have been expecting low latency to be a key feature of the new 5G release, but manufacturers are less interested in lower latency and more in reliability and deterministic networking. This means that networking is reliable and predictable and currently enabled by time sensitive networks (TSN), often Industrial Ethernet or proprietary technologies. This functionality is vital in industrial applications, where machines need to be very well coordinated to machine parts or handle sensitive materials.
This may be another key challenge for the telecoms supply chain, since most of the industrial 5G activity is in Europe—more specifically, Germany.
Industrial IoT Is Mostly a European Affair |
RECOMMENDATIONS |
The host of the 5G Arena in Hannover Messe was the 5G Alliance for Connected Industries and Automation (5G-ACIA), an industry forum that is currently driving the application of the new cellular generation in the industrial domain. The membership of this association is interesting: out of the 47 total members (as of Q2 2019), 38 are in Europe and, of those, 27 are based in Germany. Seven are in Asia-Pacific, and two are in the United States. This is surely a contrast to the current 5G race, where Europe is lagging behind the United States and Asia-Pacific for consumer 5G. This illustrates the dominance and expertise of the German industrial supply chain, the technology and innovations of which are exported throughout the world. It may also be that 5G for industrial applications will be made in Germany and exported to other regions.
It is imperative that network infrastructure vendors take a more active role in industrial 5G and start discussing manufacturing requirements for eMBB and, more importantly, URLLC, which will introduce deterministic networking in the 5G specification. This will enable deterministic networking in the industrial domain, and mobile service providers will be given the opportunity to displace several proprietary and antiquated technologies with the new standard. However, this opportunity will not be there for long; Webscale giants—such as Amazon and Microsoft—are actively targeting the very same space with a combination of public, private, and on-premises solutions. Mobile service providers and infrastructure vendors must partner with specialists now and start educating the industrial market about the capabilities of the new standard and, most importantly, learn from the industrial technology market what they need to provide.