Almost nine in 10 manufacturing businesses in the world’s industrial heartlands want their own private LTE and 5G networks to drive forward Industry 4.0 initiatives and digital transformation. Three quarters are set to upgrade their communications networks in the next two years. Wi-Fi and wireless LAN will hardly get a look in.
These are the conclusions from a new survey by ABI Research of 600-odd ‘decision-makers’ in the manufacturing sector, commissioned by Finnish vendor Nokia to assess investment strategies related to 4G and 5G, and to other Industry 4.0 technologies.
The resulting poll found 74 percent of manufacturing companies – in frontline industrial markets – are looking to upgrade their communications and control networks by the end of 2022. More than 90 percent are investigating the use of 4G and/or 5G in their operations, 88 percent are familiar with private 4G and 5G networking, and 84 percent are “considering” installing their own local private 4G and 5G wireless networks in their manufacturing operations.
Ryan Martin, principal analyst at ABI Research, said: “Research findings indicate a preference for deploying private fully-owned and operated wireless networks, with manufacturers favouring in-house management to allay security concerns. It’s evident respondents are not entirely committed to Wi-Fi/WLAN and will consider latest generations of wireless technologies.”
The survey, completed at the end of 2019, polled protagonists in developed countries. The sample was split between the automotive, consumer goods, and machinery markets, and roughly between the United States and Canada in North America, and the major industrial centres in Europe (Germany, France, UK) and Asia (China and Japan), with a smattering from Australia as well.
Half of respondents (52 percent) said advanced LTE and 5G will be necessary to meet their transformational goals. The research also sought to identify key business use cases that would drive investment in 4G or 5G.
Respondents cited the need to improve existing infrastructure (63 percent), automation with robotics (51 percent), and employee productivity (42 percent). Priority buying areas are automation and machine upgrades (47 percent), industrial IoT initiatives (41 percent), with cloud infrastructure following at (37 percent).
Buying decisions for new industrial IT systems is focused reducing downtime (53 percent), improving operations efficiency (42 percent), and enhancing security (36 percent). Buying decisions for new OT (operations technology) gear is focused on replacing ageing infrastructure (43 percent), improving efficiency (40 percent), and increasing capacity (38 percent).
Martin said: “2020 is a critical year for networking suppliers to educate the market regarding the merits of 4G and 5G. We also observe a pan-industry need to quantify not only the potential ROI of investing in private wireless, but also to clearly indicate the cost of inaction – vendors need to make the case for investing in Industry 4.0 today to gain a clear competitive advantage over those who choose to wait.”
Manish Gulyani, vice president for marketing at Nokia’s enterprise unit, said: “We have reached an inflection point in Industry 4.0 transformation as the fast, secure, low latency connectivity underpinning its implementation now becomes available. This research indicates the strong marketplace appetite for industrial-grade wireless networking to capture the transformational benefits of digitalisation and automation.”
