Verizon CEO Hans Vestberg said one of the first big enterprise applications of 5G will be for private networks with edge computing capabilities in company campuses or manufacturing facilities.
During a lengthy discussion about 5G with CNBC's David Faber and Ginni Rometty, the IBM chairman, president and CEO said the combination of cloud technology, edge computing and 5G would first be applied in "fixed perimeter" locations.
Verizon's CEO agreed: "Initially there's a private 5G network for a factory," he said. "We build a mobile-edge compute for the factory, and then the factory needs some applications and software on top of it -- which we probably don't have -- and then you put that on top in edge [computing], and then you [have] compute and storage everything in the factory."
The comments from IBM's Rometty and Verizon's Vestberg were part of a wider discussion about the opportunities for technology and telecommunications companies in an era of 5G. They agreed campuses and manufacturing centers could well be among the first profitable use cases in 5G -- that's noteworthy considering the bulk of today's 4G revenue come from connections for consumers' smartphones.
Challenges and opportunities
In hyping the enterprise opportunity for 5G, Vestberg and Rometty join a wide variety of other industry observers.
"The future of 5G lies in the enterprise," states analyst and consulting firm ABI Research in a new white paper.
"[However], the reality is that the implementation approaches that have been designed for the consumer market will not adequately serve enterprise verticals," argued ABI's Stuart Carlaw in a statement. "The 'build it and they will come' approach is simply unrealistic and is one of the myths holding back the 5G market."
Nonetheless, Vestberg argued Verizon is well on its way toward deploying the kind of private 5G networks with edge computing enterprises will pay for. He reiterated the company's plan to deploy a mobile edge computing product by the end of this year. That product, he explained, would allow an enterprise to handle its processing and storage tasks via on-site edge computing resources, eliminating the need for a corporation to pay to transmit large amounts of data to an offsite, cloud computing data center. It also will accelerate responses to computing requests, Vestberg noted.
And with 5G, Vestberg said, an enterprise such as a manufacturer could quickly and easily reorder robots along a production line without running cables around the shop floor. The high-speed, low-latency connections available in 5G would also support the needs of a high-production manufacturing center, he said.
Judging supply and demand
To be clear, this isn't the first time a top executive at a wireless network operator has pointed to the enterprise opportunity in 5G.
AT&T's outgoing networking chief, John Donovan, touted "the early opportunities ... in enterprise," last year. And vendors ranging from Qualcomm to Ericsson to Amdocs have made a similar argument.
They may well be correct. Already some enterprises are openly eyeing 5G. For example, Chicago-based Rush University Medical Center is embarking on a major 5G installation, initially looking to eliminate the need for extra wiring in its offices. Further, AT&T last year announced vendor-partner Samsung would build a manufacturing-focused 5G "Innovation Zone" in Austin, Texas, intending to create "a real-world understanding of how 5G can impact manufacturing and provide insight into the future of a Smart Factory."
So far, however, enterprise examples are relatively rare. Whether the pace of corporate interest in 5G picks up soon or takes much longer remains to be seen.