Network slicing was positioned as the most promising use case for 5G networks in the enterprise domain, aiming to create completely new business segments for carriers and help them grow their enterprise revenues significantly. Until now, this has largely been a theoretical discussion that has not resonated with enterprise verticals, and network slicing is still many years away from the market for many reasons. Among others:
- Network slicing requires end-to-end orchestration of networks that are made up of several vendors’ equipment, multiple generations running concurrently, and systems that require layers of middleware to work together. Orchestration of these complex installations will take years to implement.
- Full network slicing requires 5G Next Generation Core (NG Core) deployments, something which is also many years from reaching a critical mass.
- Network slicing is positioned as a Software-as-a-Service (SaaS) business model, which assumes the operator sells a service to an enterprise vertical. Mobile operators do not fully comprehend what enterprises truly need and their business is structured to address the short tail (few and large) rather than the long tail (many and small) of enterprise applications.
For these reasons and more, network slicing has not yet taken off while mobile operators are still waiting to see how their 5G networks will be deployed. Nevertheless, there may be an alternative form of slicing that can be deployed using technology that is currently available.
Current Market Developments Favor Slicing
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IMPACT
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Network slicing—in the strictest sense—requires end-to-end orchestration of and many improvements to today’s network technologies, operations, and sales processes. However, as discussed in the 5G Release 16 Reliable Communications for Enterprise Verticals Insight, the new 3GPP release introduces many improvements to current networks that can enable reliable and deterministic communications. Mobile operators will be able to customize their connectivity offerings to include deterministic Service Level Agreements (SLA) and create new types of services, rather than wait for the full slicing architecture to be defined in subsequent 3GPP releases and for devices to support multiple slices. For example, Release 16 adds support for deterministic networking, including Time Sensitive Network (TSN) support, potentially allowing for Network-as-a-Service business models.
Moreover, mobile operators are now fairly advanced in deploying their networks and are now looking at enterprise use cases to justify their nationwide deployments. For example, U.S. mobile operators recently invested tens of billions of dollars in the C-band auction, and will likely address enterprise verticals more aggressively to find new revenue streams. Early enterprise business cases using what is (or will shortly be) available in 5G network technology is a natural next step.
The B2B Future is Hybrid
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RECOMMENDATIONS
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There is another parallel trend happening in the market, that of Non-Public Networks (NPN), also called private networks. These networks are being deployed now, mostly on 4G, but shortly 5G as well when infrastructure matures at the end of 2021. These private networks will require some form of integration with the public network at some point for use cases that go beyond the on-premises domain, in what is called Public Network Integrated Non-Public Network (PNI-NPN). This is where the early form of slicing may also excel—to bridge both private and public domains and perhaps extend the private cellular use cases beyond the local domain. These use cases may appeal to many enterprises, especially when the integration of private networks with a public slice will not require additional CAPEX spent by the enterprise and may add significant value with a moderate incremental cost.
This is exactly the area that mobile operators need to focus on: use any technology they have available to them to address enterprise vertical use cases immediately, rather than wait for end-to-end slicing to mature. The capability to offer connectivity with SLAs may prove to be a significant opportunity for mobile network operators and their enterprise strategies.
