How the enterprise frog is turning into CSPs’ prince
When it comes to embedding mobility into the corporate (private) network, mobile operators and mobile services have fallen short. Enterprises want a secure, reliable, high-bandwidth network. CSPs need to co-create services and make good use of new technology if they hope to succeed with 5G.
Mark Newman17 Sep 2019
How the enterprise frog is turning into CSPs’ prince
Think about the last thirty years of mobile. From GSM to 3G to the all-conquering smartphone, it’s been a consumer business. Sure, enterprises have adopted mobile communications, but mostly by giving their employees consumer devices, or allowing employees to bring their devices with them. They did not put enterprise tools into the hands of their employees.
This is, in part, a reflection of the strategies of the companies that have brought the mobile Internet to life – namely Apple, Google and Facebook. They are unashamedly consumer-focused organizations. Microsoft, which might have delivered enterprise applications on mobile devices, spent years trying (half-heartedly) and failing to expand into mobile before the ill-fated acquisition of Nokia’s handset business. Blackberry flickered for a period but was ultimately defeated by the emergence of the smartphones and their associated ecosystems.
But it also comes down to how mobile networks get built and the culture of mobile operators. Mobile networks are wide area networks. They are outdoor networks that also deliver indoor coverage. Operators (and enterprises) have tended to worry about indoor coverage as an after-thought when the signal from outdoor isn’t strong enough. Then there’s the question of who pays for improving the indoor coverage: the operator or the enterprise?
When it comes to embedding mobility into the corporate (private) network, mobile operators and mobile services have fallen short. Enterprises want a secure, reliable, high-bandwidth network. Mobile operators have not been able to offer this. Enterprises also want to be able to scale bandwidth up and down to meet the specific requirements of their business.
Think of a mobile network like the lighting for your home. Imagine if there was only one switch, which you couldn’t control and which was switched to ‘on’ all the time and for every room in your house. Operators want to be able to control each room individually, with dimmer switches, and manage them all centrally.
Not all 5G operators will take the same approach to the enterprise, unlike the consumer mobile market where there is little difference between operators’ services, business models and go-to-market strategies. Large incumbent operators in European, North American and North Asian markets have long-established enterprise businesses, which have been forging strategies for delivering cloud-based services for many years. But mobile-only operators and challengers often derive 90% or more of their revenues from the consumer market. They sell to enterprises, but the only real differentiation is in pricing – for example, offering discounted roaming prices for specific destinations. These operators tend to rely on pre-packaged services developed by their technology partners.
This week we have published a new piece of research, 5G future: Targeting the enterprise. The report, sponsored by Oracle, explores two of the key building blocks in delivering 5G services to the enterprise: network slicing and edge computing. It also explores how CSPs are embracing the concept of ‘co-creation’. This involves putting technology/software experts into the front line and working with both the enterprise customer and third parties that also have a role to play in delivering a solution to an enterprise.
Co-creation is the process by which CSPs collaborate with their customers – and in some cases third part suppliers – to build specific solutions and capabilities. For CSPs, this increasingly involves engaging their own cloud software experts with enterprise customers. AT&T and Telenor are two of the operators referenced in the report and who are forging ahead with initiatives to co-create with their customers in 5G.
In addition to looking at co-creation, the report focuses on two capabilities that are an integral part of 5G: network slicing and edge computing. CSPs are still in the early stages of deciding how to leverage these capabilities. For example, there is no consensus on how many network slices CSPs will adopt (in our survey conducted for the report, a third of respondents said they expect CSPs to create as many different slices as they have customers, while another third said they expect only one to 10 slices). Furthermore, network slicing in the radio-access-network, which would appear to offer some of the biggest gains to both CSPs and their customers, will lag availability in the network core.
Edge computing has become central to how CSPs see their capabilities in delivering new B2B capabilities. By extending their network and capabilities closer to the point of consumption CSPs reckon they will have a crucial role in delivering the IoT. More than a third of the operators in our survey said they planned to build and operate their own mini data centers. But this approach could become untenable over time as cloud technology proliferates and service providers of all kinds become increasingly dependent upon each other to deliver a quality experience for customers.
Colocation is a well-tested method of sharing the cost of turning up far-flung facilities, and we expect that as the number of edge clouds grow, more CSPs will look for more help from third-party data center providers. Beyond partnering to build physical MEC facilities, CSPs will need to strike deals with suppliers that have cloud computing experience for what they put into MEC facilities.
Whatever a mobile operator’s network capabilities, the IT systems that manage customer relationships will ultimately determine their success. A mobile operator expanding into a new B2B market will have the opportunity to embrace new, cloud-based customer-management platforms whereas incumbent operators will either rely on existing systems or find a way to integrate new capabilities.
This is, in part, a reflection of the strategies of the companies that have brought the mobile Internet to life – namely Apple, Google and Facebook. They are unashamedly consumer-focused organizations. Microsoft, which might have delivered enterprise applications on mobile devices, spent years trying (half-heartedly) and failing to expand into mobile before the ill-fated acquisition of Nokia’s handset business. Blackberry flickered for a period but was ultimately defeated by the emergence of the smartphones and their associated ecosystems.
But it also comes down to how mobile networks get built and the culture of mobile operators. Mobile networks are wide area networks. They are outdoor networks that also deliver indoor coverage. Operators (and enterprises) have tended to worry about indoor coverage as an after-thought when the signal from outdoor isn’t strong enough. Then there’s the question of who pays for improving the indoor coverage: the operator or the enterprise?
What enterprises want
When it comes to embedding mobility into the corporate (private) network, mobile operators and mobile services have fallen short. Enterprises want a secure, reliable, high-bandwidth network. Mobile operators have not been able to offer this. Enterprises also want to be able to scale bandwidth up and down to meet the specific requirements of their business.
Think of a mobile network like the lighting for your home. Imagine if there was only one switch, which you couldn’t control and which was switched to ‘on’ all the time and for every room in your house. Operators want to be able to control each room individually, with dimmer switches, and manage them all centrally.
As CSPs move from LTE to 5G they are taking more interest in B2B space, which makes sense. The consumer mobile market has become saturated, and service innovation is a function of the smartphone ecosystems. Mobile operators also want to capitalize on emergence of the internet of things and opportunities presented by Industry Revolution 4.0. They realize that the next wave of mobile services will connect things rather than people.
Not all 5G operators will take the same approach to the enterprise, unlike the consumer mobile market where there is little difference between operators’ services, business models and go-to-market strategies. Large incumbent operators in European, North American and North Asian markets have long-established enterprise businesses, which have been forging strategies for delivering cloud-based services for many years. But mobile-only operators and challengers often derive 90% or more of their revenues from the consumer market. They sell to enterprises, but the only real differentiation is in pricing – for example, offering discounted roaming prices for specific destinations. These operators tend to rely on pre-packaged services developed by their technology partners.
Co-creation, network slicing and edge computing
This week we have published a new piece of research, 5G future: Targeting the enterprise. The report, sponsored by Oracle, explores two of the key building blocks in delivering 5G services to the enterprise: network slicing and edge computing. It also explores how CSPs are embracing the concept of ‘co-creation’. This involves putting technology/software experts into the front line and working with both the enterprise customer and third parties that also have a role to play in delivering a solution to an enterprise.
Co-creation is the process by which CSPs collaborate with their customers – and in some cases third part suppliers – to build specific solutions and capabilities. For CSPs, this increasingly involves engaging their own cloud software experts with enterprise customers. AT&T and Telenor are two of the operators referenced in the report and who are forging ahead with initiatives to co-create with their customers in 5G.
In addition to looking at co-creation, the report focuses on two capabilities that are an integral part of 5G: network slicing and edge computing. CSPs are still in the early stages of deciding how to leverage these capabilities. For example, there is no consensus on how many network slices CSPs will adopt (in our survey conducted for the report, a third of respondents said they expect CSPs to create as many different slices as they have customers, while another third said they expect only one to 10 slices). Furthermore, network slicing in the radio-access-network, which would appear to offer some of the biggest gains to both CSPs and their customers, will lag availability in the network core.
Edge computing has become central to how CSPs see their capabilities in delivering new B2B capabilities. By extending their network and capabilities closer to the point of consumption CSPs reckon they will have a crucial role in delivering the IoT. More than a third of the operators in our survey said they planned to build and operate their own mini data centers. But this approach could become untenable over time as cloud technology proliferates and service providers of all kinds become increasingly dependent upon each other to deliver a quality experience for customers.
Colocation is a well-tested method of sharing the cost of turning up far-flung facilities, and we expect that as the number of edge clouds grow, more CSPs will look for more help from third-party data center providers. Beyond partnering to build physical MEC facilities, CSPs will need to strike deals with suppliers that have cloud computing experience for what they put into MEC facilities.
Incumbent operators with established enterprise lines of business have a massive advantage in terms of preparing themselves for the arrival of network slicing and edge computing. They can use their existing customer base to explore new ideas and concepts. But, at the same time, there can be advantages in a greenfield approach.
Whatever a mobile operator’s network capabilities, the IT systems that manage customer relationships will ultimately determine their success. A mobile operator expanding into a new B2B market will have the opportunity to embrace new, cloud-based customer-management platforms whereas incumbent operators will either rely on existing systems or find a way to integrate new capabilities.
Download the report
