Enterprise buyers differ from everyday consumers. They can select services based on the contribution they make to the operational efficiency of the business, and not just on the cost of the service being provided. Aside from some super-dedicated, almost professional gamers, that tends not to be the case with consumers – they are usually just looking to get faster connections for lower prices.
Therefore, within the consumer market, generating revenues will depend on mass market success to deliver economies of scale; whereas within enterprise markets, targeted specialist services, delivering demonstrable value that relies on the capability of a 5G network will be the key to unlocking value-added revenue.
But not all 5G networks are capable of delivering that level of targeted connectivity. Only those 5G networks that have dedicated transport connections will be able to offer this wider range of specialist services.
Those early 5G deployments, built as non-stand-alone networks, rely on the existing 4G transport infrastructure as their backbone and are not equipped to deliver the required variety of guaranteed specialist services end to end. To unlock 5G features, such as network slicing, and create the lanes that can support these specialist services, operators will need dedication in the optical transport network that can match and sync with the dedication 5G can offer in the radio access network (RAN).
Overhauling that supporting infrastructure beast is certainly not an overnight job. Inevitably it will most likely be achieved step by step as the networks evolve through 5G and possibly even onto the next 6G network generation. But in terms of unlocking the gold in the enterprise market, the operators that wait the longest to overhaul their backbone will be the ones with the smallest market left to address.
So, what can be done to address the market now, given that the operator investment pot is not limitless? The answer is that maybe, given the potential gold in the enterprise market, operators will need to specifically target with dedicated 5G connectivity, those locations where the specialist services will most likely be required – large manufacturing plants, campus style offices and business parks, major retail or sporting venues. Rolling out effectively ‘private’ 5G network links looks to be the best way to maximise the return on 5G network investment.
But it is an approach that operators need to think about quickly, because the looming threat to their 5G enterprise market opportunity comes not just from their rival operators and service providers, but from those enterprise customers themselves.
It seems, when it comes to 5G, enterprises like the idea of dedication too, and around the world, regulators are warming to the idea of awarding 5G spectrum licenses directly to enterprise customers. This would allow them to build their own private 5G networks, together with the supporting backbone infrastructure that would allow specialist services to flourish.
There are many advantages for enterprises to such an approach. For a start they can build a network to exactly their own specification – determine speed, specify latency, and ensure availability and resilience through techniques such as synchronous data replication across their own private optical backbone network.
With so many of the resources that enterprise business operations rely upon today becoming cloud-based – especially in terms of computing power – having a dedicated, and exactly specified, network drawing down real-time actionable data enables enterprises to boost their efficiency and speed business digital transformation programs.
While there would be capital costs involved in creating the network, those one-off costs are mitigated by the absence of network usage fees or leasing charges when compared to standard approaches.
All of which might seem to indicate that operators are currently caught between a rock and hard place. They are not able to overhaul their entire transport and backbone network quickly enough to support full 5G everywhere, and they run the risk of losing lucrative business to enterprise customers who opt for a ‘do-it-yourself’ approach.
However, it doesn’t have to be that way. In fact, rather than consider themselves caught, operators should be thinking that two routes have now opened to reap the rewards of the higher value enterprise 5G market.
First, targeted upgrades of the optical transport layer of their network can be implemented to support the locations of their enterprise customers. Second, those enterprises that are considering private 5G networks will likely not have the required resources and skill sets to build those networks themselves. Operators could therefore adopt a position as the natural partner to design, build and operate the end-to-end private network for enterprise customers through a Network as a Service option.
The key to both these approaches lies not just in the 5G and the network technology that will be used; rather it is in the dedication to designing and promoting the services that these technologies can support. Operators that can demonstrate an understanding of the business and operational requirements of their enterprise customers that could be served by dedicated 5G networks – rather than just an understanding of the technology – will be best positioned to sell those specialist services.
Having sold the services, the only question to answer is what is the most cost-efficient way to deliver it – via a dedicated private network the operator provides, or via a dedicated share of the public network?
And remember, this isn’t a new question for those customers or indeed for the operators. Today, both parties are already making decisions about whether to buy private space within a public cloud provider, or to create their own cloud resource. Taking the same approach to the 5G network is not a big leap.
Operators know they need dedicated paths to unlock the specialist enterprise services 5G enables. Smart operators realize there are two very viable routes to provide that dedication and gain a bigger “slice” of the 5G enterprise pie.
