Ericsson's Heuveldop: 5G & the IIoT Imperative
Ericsson isn't shy about how big of an opportunity it sees in Industrial IoT. And, following a few years of restructuring and tightening its focus, Ericsson now takes a straightforward approach to the market. The vendor learns in great detail what industrial giants need to make their companies more efficient and then builds full-stack IoT solutions for service providers to sell to them.
"This is probably the last time in my work that I will see an opportunity like this, in our industry, where our customers actually have a whole new profit pool to address," Ericsson's Niklas Heuveldop, SVP and head of North America, told Light Reading at MWC19 in Barcelona. "I don't think we got it right as an industry in the 4G evolution because that additional profit pool that was created ended up with the over-the-top players... in the app economy."
The use cases were all over the place in Ericsson's booth at Mobile World Congress. Most were centered around connecting and managing factory assets like manufacturing robots and expensive, single-purpose tools. The phrases most used by the folks manning the demos were "precision manufacturing" and "predictive maintenance."
If a manufacturer can start gradually moving the intelligence from some of its servers and bulky industrial devices into a nearby cloud, the factory floor becomes more agile. Now you can virtualize some network functions and orchestrate network functions in the cloud. Soon, you'll be able to operate the factory on a network slice and perform predictive analytics on individual machines. Down the road: the devices become 5G NR-connected, and real-time machine learning can happen thanks to a distributed cloud architecture.
The usual benefits listed for a purpose-built 5G corporate network are throughput, latency, security and so on. Heuveldop would argue that the real benefit is flexibility. Make the machines on the factory floor a bit more like Teslas -- software upgradable, always connected -- and yields improve, costs drop and more automation opportunities arrive.
"We've been working with 24 industrial partners over the last, it must be, five years. They came to us to sort of kick the tires on 5G and what can that do to them," Heuveldop explains. "The reason they came to us is that all industries, without exception, are going through a digital transformation... they're looking at reducing their operating expenses, their total cost of ownership, improving their customer experience and/or driving new revenues because their industry is under disruption. We have spent quite some time to understand what is that industry transformation all about."
It's worth noting that the big, recent IoT customer wins for Ericsson are focused on building IoT networks for service providers. Ericsson is Sprint's strategic partner for its Curiosity IoT platform -- a dedicated, distributed and virtualized IoT core network. Ericsson is also helping Dish Network complete its nationwide NB-IoT network, which is expected to be finished in one year.
With growing credibility as a builder of IoT networks, industrial partners find it easier to listen to Ericsson guide them to the right solution. Heuveldop, more than once, refers to a study that Ericsson and Arthur D. Little did to assess the entire potential of 5G for worldwide network operators. The study puts forth that global IoT spending will surpass $1 trillion by the end of next year -- with the manufacturing being the largest segment of that spending.
"Industry transformation is just a huge opportunity, and it will happen with or without us because industries need to transform," Heuveldop said. "We have had all of these industries in our labs to start with, and been looking at different use cases... We've obviously concluded that our customers [communications service providers] should be best positioned in the world to help industries purpose-build wireless networks to transform their operations.
"[However,] not all players are equal. Some are better equipped than others to address industries. It takes a new type of enterprise engagement for our customers, so you need to be knowledgeable about industrial processes."
Heuveldop said Ericsson's focus now is to be a partner to both industrial giants and service providers, but not to muddy the waters by trying to sell directly to the former. He said: "So you will see our work with GE; you will see our work with Hitachi and General Electric, and other industrial players, to understand the solution space and then build the solutions together with our service provider customers."
"I think our go-to-market is very pure in the sense that we believe in our service providers being well positioned to capture a significant portion of the [IIoT market]," Heuvelodop said. "That will net new profits for our customers and that should be good for us -- that's the basic thinking."
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