The private 5G market continues to chug along, spurred more by opportunity than adoption, but initial deployments are pointing toward positive real-world returns that should start to foster deeper discussions among internal enterprise teams that are looking at potentially jumping on the bandwagon.
Pablo Tomasi, principal analyst for private networks at Omdia, said that the market is “growing and will continue to grow, but we are not going to see that hockey stick spike that some people like to see.”
Tomasi explained that some of that muted growth is due to geographical differences in how countries are allocating different spectrum resources to support private networks. This is highlighted by more growth in countries like Germany and the United States, which have set aside specific quasi-licensed spectrum bands to support private networks.
The other challenge is the wide market potential, which Tomasi said has shown that not every potential market vertical will mature at the same rate.
“A lot of people in the telco world we’re expecting that every vertical would move at the speed of 5G,” Tomasi said. “If 5G has the development and the features and everything that happens in a few years, that’s going to be the speed that it’s going to take direct to the market. But the reality is that private 5G needs to adapt to the speed of the vertical market itself.”
An example of this is in the industrial enterprise space where Tomasi said “it can take at least 10 years to change the infrastructure.”
“You’re not going to change everything in a month because of private 5G,” Tomasi said. “You’re going to start testing the solution, you’re going to try and figure out how it works, how it integrates with everything and then if your replacement cycle is 10 years, that’s going to be the time you embrace private 5G.”
There is also a challenge in setting vertical expectations. While 5G technology can allow for higher overall data speeds and lower latency compared with Wi-Fi or legacy 4G LTE technologies, there is still a challenge in finding use cases that need that performance advantage.
“If private 4G LTE works well then you don’t need to change immediately to private 5G,” Tomasi said. “This is working fine, so you’re going to make sure that it continues working fine.”
Tomasi also admitted that the current private network ecosystem is wildly diverse and thus can be difficult to decipher. This is especially true for an enterprise IT team that is tasked with overall deployment and management of the system.
“I’m not going to lie, I don’t think it’s an easy task, particularly if you don’t know the technology, if you are not familiar with it and then someone is telling you that’s the way that we’re going to go. It’s going to be very complicated,” Tomasi said.
Private 5G needs a clear use case
Nokia, which is considered to be one of the leading players in the private network space, recently released results from an enterprise survey conducted by GlobalData that showed strong expansion and usage of deployed private wireless networks.
Those numbers included 45% of organizations that have deployed a private network were supporting more use cases than initially expected; all of those early adopters surveyed had moved to expand the reach of that network within another location; and 78% reported a positive return on investment (ROI) in the first six months.
That last point is probably most important as enterprises IT teams are coming under increased pressure to show a path toward financial success.
“We need to have a solid business case for every single initiative that we are running and especially on digital transformation as those will have to integrate with strategic initiatives,” Simone Pezzoli, group chief digital technology officer for Haier Europe, told SDxCentral in a recent interview on that firm’s digital transformation efforts. “So they needed to be very much in line with the 5-year plan and they needed to be aligned to what the 5-year plan says.”
Tomasi added that it’s important for an enterprise to understand its private network needs before committing to a deployment. This includes having current and potential future use cases in mind and using that to steer a technology commitment.
The other important task is to make sure that an IT team speaks to their OT counterparts.
“At the minimum they need to talk to each other as they discuss use cases because more often than not the benefits are going to be for OT, so you need to have that buy in from OT even if you’re IT budget is driving the deployment,” Tomasi said. “If you don’t get the good relationship going you’re going to push something for the OT people that they don’t want and then that’s not going to work.”
Can private 5G boost the edge?
The Nokia survey also found that 39% of those early private network adopters had since deployed an on-premises edge technology, with 52% planning such a deployment. This could be good news for the still nascent edge networking market that continues to struggle with finding use cases to drive adoption.
Tomasi did note that there is a growing connection between private 5G deployments and the broader push toward edge network systems. He cited work by operators like Vodafone, vendors like ZTE and system integrators like NTT Data in terms of driving more of the insight from private 5G networks through edge-based analysis platforms.
“Once you connect things reliably, you need to start doing something with the data,” Tomasi said. “It comes naturally. It’s a very interesting area and an area that is developing.”
However, he Tomasi added that one there remains one fundamental and basic challenge that remains in the way of ongoing edge growth.
“One of the big challenges that I’ve always found with the edge is that it’s so vague and difficult to define that it becomes difficult to create a specific market,” Tomasi said. “If you talk to five different people they have five different interpretation of what the edge is or where the edge is, and it becomes kind of difficult to concentrate enough people’s attention to create a market.”
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