Software AG remains set on its strategy to make mobile operators the go-to agents for private 5G in ‘vertical’ spectrum, and particularly in the Industry 4.0 space where it retains a developing crossover customer base in telecoms and industry. While most of the market speculates about whether traditional carriers, which have had the cellular market to themselves until now, will be able to capitalise on spiralling interest in industrial-grade telecoms, the Darmstadt firm is in no doubt.
Or, at least, it sees the opportunity for them to serve the Industry 4.0 market with edge-based connectivity services, as trailed in these pages last year, and to manage the whole 5G shebang on behalf of enterprises. More than this, of course, it sees an opportunity for itself to sell the underlying software pyrotechnics to help them along. The firm has deals with 20-odd carriers on one side, and with a decent roster of industrial providers on the other.
The 5G management game, in and around the enterprise ‘edge’, will be won and lost by these sides, it reckons. And it has signed with Singapore-based StarHub to launch a managed 5G-based IoT service, which it is calling a “blueprint” model for operators moving into the Industry 4.0 market on the back of 5G, and in complement with a range of edge-based sensing (IoT) and sense-making (AI) tools.
The rest of its operator partners – the likes of Germany-based Deutsche Telekom, Spain-based Telefónica, Netherlands-based KPN, Austria-based A1, Japan-based NTT, Australia-based Telstra, and Saudi Arabia-based Saudi Telecom – are in the wings, we might suppose, as potential next-stops to build 5G into augmented carrier-led enterprise plays. They already take its Cumulocity IoT platform, sometimes white-labelling it, and the private 5G edge-componentry plugs in nicely, along with some expanded functionality underneath.
That is the logic, anyway. Bernd Gross, the company’s chief technology officer, talks through the StarHub offer, browsing the company website on a shared Teams screen. It is a fully managed service, he declares, built on the Software AG platform; the website lists benefits, use cases, and other resources. The pair cooperated on the market messages, he says.
He explains: “It is combining 5G campus networks with its overall proposition. Which is what I like. And which is why I think it is a nice blueprint. Because in reality, the campus network alone is an isolated pain reliever for manufacturing companies. They have a holistic challenge, and a bunch of issues, and StarHub is capturing all of those – all industries, all the network angles, all the devices.”
The point is StarHub is making an offer of industrial connectivity which combines public and private networks, as required, plus all the supporting edge-cloud infrastructure besides. Its pitch lodges the intoxicating, but rather narrow, promise of private industrial 5G within the context of a fuller Industry 4.0 solution, he argues. That seems to be the point, at least. Is that right? “Exactly. That is the point. And that is why I like it,” he responds.
“Because that is the reality, right? Enterprises have a multitude of challenges; not just one – not just 5G coverage inside a factory. They want analytics tools, and all these other requirements – device management, integrated analytics, the whole application environment. It is an all-in-one IoT platform, into which it has embedded the 5G story, and a fully managed service that covers [everything] on-prem, in the edge cloud, and in the national cloud.”
He adds: “We are executing on the strategy we discussed before. It is a long term project, and takes time. But this is the blueprint, to be honest, to replicate across our existing 20-plus telco customers already using our IoT platform. So that is what we are working on, extending that cooperation into 5G as well.”
In ways, it has been a strange year for Software AG; the business has seen a giant leap in sales, but its own internal business change strategy – started three years ago, and about half way through – to migrate customers away from software licences onto usage-based subscriptions has seen revenues spread across multi-year deals, and top-line numbers appear to stall. Plus, the firm was caught in a nightmarish double extortion ransomware attack last October.
Gross reflects: “The pandemic has created winners and losers in a different way to typical recessions. We are in the winners’ camp in that sense. Which feels difficult to say, because of the wider situation. But digitalisation has created demand for the kind of technologies we have – which has created a windfall of sorts. But we are in the middle of a five-year business transformation, which has seen our top-line shrink even though we are winning more deals.”
Anecdotally, he says revenues are down about three percent in the year (“a small decline”), but “bookings” are up by 60 percent on the same period a year ago. “Which is enormous,” he says. “Our stock market performance is okay-ish – a little depressed – because of this business change. Because investors don’t get the full picture. But we are right in the middle of the transformation, and next year will start to look much better.”
What of the security breach, which saw a hacker gang break into its network and demand $23 million in a bitcoin payment, as one of the largest ransoms ever, for encrypted company data, eventually released on the dark web. The story made international news sites. Gross comments: “We have recovered from it. It was not a pleasant thing. We are a target for many hacker groups. Most corporations are. That’s the reality.”
He says: “It has become such big-business, and many companies are very afraid, and paying money. So it is a massive business, and a lot of corporations are under threat. We are quite confident we have closed all the doors. But then, we have been confident before as well. The truth is there is no 100-percent security, as you know. But we are working to continuously improve our security.”
But let’s get back to the matter at hand, of how to help operators make a go of Industry 4.0, and the tale of how these old familiars are, in fact, the tech-side protagonists most likely to succeed in the supply and management of private 5G to enterprises.
To be continued…
