Enterprises have yet to fully embrace the emerging 5G technology, though it is crucial to do so.
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What Do Enterprises Want?
While 5G continues to be rolled out in more and more countries in the consumer domain, every new industry event shows that enterprise 5G still has a long way to go before it becomes commercial reality. Several reasons for this have been discussed in previous insights (e.g., unreliable communication as well as device ecosystem immaturity and standardization issues in IN-6143: How Can the Telecommunications Industry Rescue the SME Opportunity? —Insights from Hannover Messe 2021), but an additional perspective needs to be considered. There seems to be a fundamental mismatch between the enterprise 5G value proposition projected by the telecom industry and the value proposition perceived by enterprises.
While infrastructure vendors, as well as CSPs, still mainly target the deployment of a 5G network on enterprise sites, it turns out that enterprise is looking for much more tangible benefits then the telecom related key performance indicators (KPIs) (i.e., bandwidth, latency, reliability, or availability). In other words, enterprises are more interested in the applications that 5G can enable, while they see only limited value in 5G connectivity. From this it follows that enterprises will not want to have to deploy a 5G network on their premises, just so that they can identify use-cases and develop applications on their own. Instead, they are looking for full end-to-end (E2E) digitization platforms that entail applications enabled by 5G.
What Should an Enterprise 5G Platform Look Like?
The next logical question to ask, then, is what this enterprise 5G platform should look like, i.e., what components it needs to entail in order to offer tangible value proposition for enterprises looking to digitize their operations. According to ABI Research, such a platform should extend its reach over six different domains:
- Analytics, Intelligence & AI: First, an enterprise platform needs to provide enterprises with sufficient analytics capabilities that allow them to analyze production workflows. Ideally, this should be combined with intelligence and AI capabilities, which would allow the platform to perform autonomously to any kind of unexpected change.
- Datahubs & databases: As the digitization of more and more workflows (what is referred to as Industry 4.0) increases the amount of data on enterprise premises, an enterprise 5G platform will need to cater for this increased demand of data storage and include data hubs and databases. Since this data will be generated in different areas throughout the enterprise site, these hubs and storage opportunities need to distributed and self-organizing.
- Convergence of OT & IT networks: To be able to digitize production workflows, operational and information technology need to speak the same language. Currently, OT and IT are still largely separated domains. An enterprise 5G platform needs to converge these two, so that OT becomes part of the IT network.
- Connectivity: To enable different devices to communicate with each other or transmit any kind of information across the enterprise site, this platform needs to offer some form of connectivity. This is where cellular connectivity (especially 5G) can play an important role.
- Sensors & Devices: As enterprises need a lot of production equipment, sensors and devices for their operation, an enterprise digitization platform needs to support the connection of a large number of devices and sensors to support enterprise operations.
- Device management: Lastly, but not least, a cellular platform for enterprises also needs to offer easy-to-use interfaces to manage these devices. This will enable factory, port, or warehouse operators to orchestrate and on-or off-board devices easily, without having to rely on a third-party.
Early examples of such a platform are already emerging in selected verticals. For the manufacturing domain, for example, machine automation vendor Bosch Rexroth presented their new ctrlX AUTOMATION platform at this year’s Hannover Messe Industry (HMI), which offers 5G as an optional connectivity component and combines it with other emerging technologies, like artificial intelligence and time-sensitive networking, to offer readily designed applications to manufacturers.
An interesting side note: While 5G connectivity will be a key enabler for these applications and technologies, during the presentation 5G was only mentioned in a sub-clause once.
So Why Should the Telecom Industry Care?
This side note underlines one important aspect that ABI Research has been hearing constantly from conversations with enterprises and System Integrators from different verticals: the true value proposition of Enterprise 5G does not lie in 5G in itself, but rather in the use-cases and applications enabled by 5G connectivity, of which there are plenty.
- Enhanced Mobile broadband (eMBB) guarantees the high bandwidth that is required for the large-scale adoption of artificial intelligence (AI) or extended reality (AR & VR) technologies in an enterprise environment.
- Low latencies allow the digitization and automation of real-time enterprise processes.
- Five nine’s availability and reliability makes the network fit to address particular missions, or even life-critical enterprise use cases, in which unexpected network outage would lead to devastating consequences.
As the tangible value for enterprises, however, lies within these applications rather than the enabling technology, the entire industry needs to rethink their approach to concentrate their efforts on how to deliver these applications to enterprises. As this requires expertise from other domains, the telecom industry needs to consolidate their efforts on ways to acquire this expertise through partnerships and/or co-creation efforts.
In addition to that, traditional telecom players also need to adjust their messaging to reflect this important shift in focus towards applications rather than enabling technologies. In short, the messaging towards enterprises needs to be centered around applications, use cases and related efficiency and/or quality enhancements, rather than putting the spotlight on the enabling technology itself. In short, telecom’s need to accept the role of 5G within the much larger orchestra of different ICT technologies.