The 5G Enterprise Conversation
Maybe the real killer app for 5G in the enterprise is "enablement."
That's what Karl Whitelock, research VP for IDC's Communications Service Provider - Operations & Monetization industry practice, said during a panel discussion I was part of earlier this month in Dallas at a one-day workshop sponsored by Amdocs Ltd. (NYSE: DOX) I think that's an interesting way to sum up all that we're hoping 5G will bring to enterprises. (See The 5G Enterprise Opportunity.)
Whitelock started by recalling how the iPhone was a great phone, but what keeps selling the next generation of devices is the huge ecosystem that sprung up around the device. You are not just buying the device any longer, you're continuing to ante up in the apps, music, video and cloud ecosystem that you've bought into.
In the enterprise world, Whitelock said 5G will start out by providing simple, connectivity-based services, but enablement will happen.
He said that "literally every enterprise I've talked to out there wants to take what they've been doing as selling widgets, and now selling the widgets as a service. And the reason that they do that, their customer reach goes a lot further; it becomes the whole world and not just a small geography."
The enterprise is going through this phase where physical goods are going to be sold as services that happen to include physical products, Whitelock said. And if that's the case, service providers "need to now say, 'Okay, if that's what they want, how do we give that to them?'"
That's not an easy question for service providers. How do you enable businesses to do more, be more, produce more by way of the connectivity you deliver, but also the problems you solve for them, in their industry? That leads to the next question: Once you identify what that "thing" is that you can enable businesses to do, how do you make sure you're monetizing it?
"When you when you start talking about multi-gigabit speeds, there's a value in that," said AT&T's VP of Enterprise Mobility, Robert Boyanovsky. But the enablement happens with AR and VR applications. "Imagine being a Boeing engineer … trying to wire a fuselage. You could get out your scroll, right, and figure out that the red wire terminates at the yellow bolt … or you could drop on your set of mixed reality goggles, walk through the fuselage and the schematic is overlaid on top of what you're seeing."
Solving a specific problem, with split-second latency and connectivity, is more than just providing a dumb pipe.
"What I try to do is take some of the exciting, futuristic stuff, find customers who are willing to work with us and to prove it," Boyanovsky said. "That's what gets us up in the morning, gets us excited, in the product house, to actually make a business outcome or change a life for somebody."
But service providers don't have to change lives to revive their enterprise ambitions. Business customers can be challenging, but the advent of 5G opens doors regardless of where carriers are in their 5G journey. One question I put to the panel was whether 5G services would carry a premium -- or make more money -- over other services that did roughly the same thing, but faster?
There will be a premium on some service-level agreements for enterprises, said Lisa Partridge, the director of data, video and voice product marketing for Frontier Communications Corp. (NYSE: FTR)'s commercial business. After all, she joked, business customers really hate to wait on stuff. "Enterprises want nines that aren't even out there yet," she said. "I just blinked my eye, where's my stuff?"
But when it comes to how ultra-low-latency applications are monetized, that's a more nuanced conversation, Partridge said. "There are a lot of unknowns, and it's really all about getting to the right customer experience, what they're trying to solve for, and then delivering what they want in that fashion and executing it flawlessly."
Either way, she said, it opens doors to a renewed conversation with enterprises about their needs and how service providers can help. Help them now and when 5G comes along and enables more capabilities, it'll make it more tough for them to leave.
— Phil Harvey, US News Editor, Light Reading