Enterprise 5G Needs a Platform Strategy to Survive

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By Dimitris Mavrakis | 4Q 2019 | IN-5614

The cloud market is a mature domain in which giants Amazon, Google, Microsoft, Salesforce, and many more are competing and complementing each other to provide for enterprise requirements. In many cases, these companies provide technology for the same domains enterprise 5G aims to target. In that regard, the cloud market is quite delineated in terms of offerings, which are divided into Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a- Service (SaaS). The IaaS market is dominated by a few cloud giants that offer storage and networking, among other services. Amazon EC2, Google Cloud Engine, and Rackspace are a few companies that developers and enterprises build their services on. The PaaS market is by far the most popular in terms of enterprise adoption and expected to rise. Companies like Amazon, Microsoft, and other specialized platform providers are the most popular choices. The last category, SaaS, offers much more specialized services. Dropbox, Google Apps, Salesforce, and Zoho apps are a few enterprise SaaS providers.

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5G Needs to Learn from the Cloud Giants

NEWS


The cloud market is a mature domain in which giants Amazon, Google, Microsoft, Salesforce, and many more are competing and complementing each other to provide for enterprise requirements. In many cases, these companies provide technology for the same domains enterprise 5G aims to target. In that regard, the cloud market is quite delineated in terms of offerings, which are divided into Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a- Service (SaaS). The IaaS market is dominated by a few cloud giants that offer storage and networking, among other services. Amazon EC2, Google Cloud Engine, and Rackspace are a few companies that developers and enterprises build their services on. The PaaS market is by far the most popular in terms of enterprise adoption and expected to rise. Companies like Amazon, Microsoft, and other specialized platform providers are the most popular choices. The last category, SaaS, offers much more specialized services. Dropbox, Google Apps, Salesforce, and Zoho apps are a few enterprise SaaS providers.

Except for Amazon, most companies specialize in a single domain, providing either IaaS, PaaS, or SaaS. After nearly two decades of evolution and enterprise adoption, these models are quite mature in the web world. If these cloud-based business models are expanded to the telecoms domain, it can be argued that Mobile Service Providers (MSPs) can surely be positioned as IaaS providers, selling connectivity as a service on which enterprise and consumer application developers can build their platforms. In fact, the 4G IaaS model is what made app stores, social networks and streaming video so successful. All of these were built by third parties taking advantage of connectivity IaaS.

Current Enterprise 5G Discussions Are about SaaS

IMPACT


The telecoms industry and the 3rd Generation Partnership Project (3GPP) are currently aiming to fully define 5G enterprise applications, including network slicing capabilities and requirements. For example, 3GPP SA6 is liaising with industry associations, including the 5G Alliance for Connected Industries and Automation (5G-ACIA) and the 5G Automotive Association (5GAA), to understand enterprise requirements, create specifications, and ultimately allow MSPs to develop enterprise applications. Indeed, early enterprise 5G trials include an MSP, a vendor, and an enterprise implementer to illustrate that 5G would provide significant benefits (e.g., DT, Ericsson, and OSRAM). In a way, the telecoms industry is attempting to leapfrog from the IaaS model to the SaaS model, which points to a huge cultural gap: MSPs have been accustomed to selling voice minutes, SMS, and bits, but they now aspire to start selling 5G predictive maintenance services for manufacturing equipment. This leap would be unheard of in the cloud domain, where an IaaS provider (e.g., Rackspace) would have to jump to the software domain (e.g., providing hosted email services). The business model would simply not be profitable. So, what can the telecoms domain learn from the web world?

Enterprise 5G Needs a Platform Approach

RECOMMENDATIONS


A PaaS strategy is the next logical step for MSPs and their current IaaS legacy for many reasons:

  • It is currently impossible—and also counter-productive—to predict which facet or capability of 5G enterprise implementers will embrace and build their software on. MSPs cannot develop the long-tail of enterprise 5G applications alone, even if they partner with specialists. Every single use case within the same vertical will be entirely different from the next.
  • Leapfrogging from IaaS to SaaS requires a learning curve no MSP can afford.
  • Edge computing, and especially federated edge deployments (e.g., Ericsson Edge Gravity, MobiledgeX), coupled with last mile connectivity, present a very unique and powerful selling point for MSPs.

For these reasons, and many more, mobile service providers must deploy their 5G networks as if they are enterprise enablement platforms, rather than simple networks. This means consistent Application Programming Interfaces (APIs) for developers to use, horizontal platforms such as the 5G NG Core Service-Based Architecture (SBA), the agility and flexibility of Cloud-Native Functions (CNF), and common network orchestration and automation. The building blocks for a 5G PaaS model are there, but MSPs cannot yet justify its deployment because there is no “killer app” or established business case. However, with a PaaS strategy, neither are necessary; the market will decide what will be successful and MSPs will be a key component of a flourishing ecosystem.

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Companies Mentioned