A new report by analyst house ABI Research says the traditional telco community is restructuring its enterprise operations, including by establishing brand new business units, in order to deliver custom 5G networks for private industrial usage, and to make 2021 a “boon year” for “5G and edge networks”. Carriers AT&T, Telefonica, Verizon, and Vodafone and vendors Ericsson and Nokia have all reorganized for pitched battle in industrial markets, it noted.
In concert, hyper-scaler cloud providers Amazon, Google, and Microsoft are stepping up efforts to provide edge-based storage and, importantly, compute solutions to run in enterprise venues and multi-access edge (MEC) infrastructure in operator networks. Besides, a whole ecosystem of service providers is jockeying for position. “All these players are investing significantly in edge locations, 5G infrastructure, and backbone networks,” it said.
The firm re-ran a forecast from a year ago that revenue from private 5G networks will grow from $1.6 billion in 2021 to $65 billion in 2030, at a compound annual growth rate of 60 percent. The wider tech ecosystem is getting busy in the sector, it said, citing activity by “data centre companies, enterprise end-verticals, public cloud providers, and content delivery network providers”. All of these are looking to make money from the surge in private 5G. The report is available here.
Don Alusha, senior analyst for 5G core and edge networks at ABI Research, said: “With 5G edge networks, every enterprise engagement is a custom job. Consequently, communications service providers (CSPs) and vendors seek to establish business models that are governed by different KPIs, both technical and commercial. This stands in contrast with product-led solutions that fit well with mass-market, country and region-specific subscriber models.
“5G edge network deployments mark the first time that the industry focuses on business evolution and integration with vertical industries. To that end, tier-one CSPs [like] AT&T, Telefonica, Verizon, and Vodafone, and also vendors [like] Ericsson and Nokia are establishing new enterprise business units. Moreover, hyperscalers like Amazon, Google, and Microsoft are taking a strategic approach with new solutions to unlock the value of 5G and edge.”
Alusha said: “CSPs own edge infrastructure that holds potential in terms of local compute and low-latency connectivity, but they have limited cloud experience. Cloud providers are agile and innovative. With the right collaboration arrangements in place, there is no reason why 5G edge computing cannot yield value for all parties involved. At present, however, nobody can predict where this is going to go. It will be a captivating journey.”
There are a number of obstacles, the firm said; business cases need more work, and hardware and software must be re-engineered for distributed and constrained edge locations. “Building a 5G edge network is the first step. The second is to figure out how to integrate these technologies into business processes – which may not be a matter of technology but a matter of the effort to initiate change [across] marketing, sales, product design. This remains the topic of much discussion in the industry.”
