The main business driver for private networks is security, according to a Spirent report
It comes as no surprise that talk of private wireless was rampant at Mobile World Congress 2023, and while Steve Douglas, head of market strategy at Spirent Communications, was impressed by several of the use cases on display, he encouraged RCR Wireless News to “peel back the onion a little bit” for a deeper look.
“Private networks was definitely everywhere,” he confirmed, but added, “There was a lack of clarity around how anyone was going to monetize it. There seemed to be a real lack of discussion about the network architecture required to deliver on private networks.” He explained further that most of what he saw being demoed this year is “heavily dependent” on 5G core deployments and advanced capabilities like network slicing, all of which are in the very early stages. “So, it felt to me that there was more hype than realism,” said Douglas.
However, in a recent report, Spirent did find significant interest in 5G from enterprises across a range of verticals, which Douglas said is certainly “triggering a lot of trial and test activities.” It’s a trend the company expects to see more of this year; but private network trials and tests aren’t full-blow deployments. As the industry continues to establish private wireless as more permanent fixtures in the enterprise sector, there are several key things to keep in mind, according to Douglas.
Security is number one. Douglas shared that Spirent’s reporting revealed that the main business driver behind enterprises interest in private networks wasn’t shiny new use cases or the promise of increased agility, despite what most of the booths at MWC were pushing. The priority for enterprises, he said, is security.
“Today’s current networks are best-effort and the way they are implementing security across the best effort networks is costly and bespoke, so if you could offer them something that is secure, robust and simpler and it also ties to some tie use cases, especially mission critical use cases that relate to safety or big insurance issues,” Douglas explained.
Service-level agreement (SLA) uncertainty. One of the biggest challenges slowing down private wireless adoption is that while enterprises are telling Spirent that they would pay for higher security or increased reliability, they also admitted that they still don’t really understand exactly what SLA they need to be asking for. Instead of dictating specific SLAs that are specific to their industry, they are citing high-level, generic SLAs. Spirent asked: Do you know exactly what you need the network to deliver? And they didn’t.
“They didn’t fully appreciate what the 5G network could deliver,” said Douglas of the enterprises included in the report. “That’s not a barrier to adoption but it will probably slow down the option until both parties [the private network provider and the enterprise] educate each other about what is really needed.”
Further, many of the enterprises that Spirent spoke to believe that today’s public networks can’t deliver the SLAs they need. “That was making them think they needed a purely isolated, self-build system to deliver on that,” said Douglas. However, when pressed, it became clear that this belief isn’t based on any hard evidence. “It was a mixture of gut feeling… and heresy,” Douglas stated, adding that it’s up to service providers to convince potential enterprise customers that it is possible to use a slice of the public network in the future that is as secure and as robust as private network.
Playing favorites. The private wireless space has a mix of players — cellular operators, hyperscalers, systems integrators and even enterprises themselves. But according to Douglas, the data indicates that there is currently no single dominant player. “Different industries have different favorites,” he said. The manufacturing industry and extraction verticals like mining, for example, favor global system integrators because these entities often already work with system integrators due to the complex nature of their operations and environments. The transport and logistics sector, perhaps somewhat obviously, favors mobile operators because of the sector’s mobility requirements.
Notably, Douglas said that across all sectors, cloud service providers are popping up as a viable option. He explained the reason behind this is that in most enterprises, the IT team is the buyer of networking technology, and these teams often already have a relationship with a cloud provider around the company’s existing IT cloud strategy. “Because of those relationships and possibly because of the influence coming from the cloud providers, [IT teams] are pretty open to going to them as a direct option,” Douglas concluded.
Opex over capex. One of the major considerations for an organization is how much it costs to deploy and operate their networks and systems in terms of capital and operating expenditures (capex and opex), and how long it will take to achieve return on investment. Spirent found that the majority of the enterprises in the survey and that is in conversation with would prefer an opex model when it comes to private networks, and further, they want a managed service for the operation side of the network. “They didn’t want to have any investment themselves in running it,” said Douglas. Today, other than the cloud service providers, most providers offer private networks as a capex model, but because Spirent believes this isn’t what enterprises want, Douglas said some forms of private wireless adoption will be delayed. “Because it does seem like at this stage, many of the enterprises are slightly risk adverse to taking something they are not familiar with — a private 5G environment — and standing up large capex around it,” he said.
