Our inaugural Trend Analysis report on platforms and 5G looks at the at the relationship between platform business models, the internet of everything (IoE) and 5G. Through our research, which included an online survey of 61 telecom professionals from 52 companies, we’ve discovered that 5G will be important, but not necessarily critical, to the success of platform business models. But on the flipside, platforms combined with IoE will be essential to 5G – and could be a killer use case.
What is a platform?
A platform strategy can have two key elements: a platform business model that sets up digital ecosystems or marketplaces connecting consumers with producers of goods and/or services (like Amazon Marketplace); and a platform-based IT architecture, which supports an electronic marketplace and facilitates the digital business model (like Amazon Web Services).
Many operators believe a platform approach is mandatory and they believe defining 5G as just a new air interface is much too narrow. As one respondent put it: “5G is about the complete transformation of the architecture into something that is highly agile, highly scalable and highly automated.”
Ultimately, 5G, network functions virtualization, software-defined networking and cloud-based platform business models are all inextricably linked and represent the best (and perhaps only) way forward for CSPs.
More than just connectivity
By combining platforms and 5G, CSPs have an opportunity to move beyond providing just connectivity to becoming ecosystem curators and enablers of many different verticals – from smart cities to connected cars, the industrial internet of things (IoT) and more. By some estimates, this market will be worth close to a trillion dollars within the next decade.
“5G has become one of the biggest catalysts for change in our industry,” Nik Willetts noted in his keynote at TM Forum Live! in May. “In the 5G world we are going to co-design what our customers need with the customer. And if we’re going to really capitalize on the opportunity, we’re going to need to transform our business as well as our technology.”
That’s where platforms come in. Operators need the flexibility of multi-tenant platforms to manage and monetize services with very different network requirements. Some applications, like IoT sensor networks, require relatively little bandwidth – they need to transmit small amounts of data sporadically but frequently. Other applications, like remote surgery, need huge amounts of bandwidth, extremely low latency and guarantees of availability and reliability.
Delivering these and other types of traffic using shared resources is not easy, but CSPs believe they can meet the demands by turning the network into a platform and creating network slices that are orchestrated and assured end to end through automated closed control loops using intent-based management, analytics and policy.
“We need to stop thinking about networks as providing connectivity and think of them as platforms on which we can build real-world applications,” says Dr. Lester Thomas, Chief Systems Architect, Vodafone.
The transformation begins
Operators have begun their transformations into digital service providers and platform providers (see infographic). It’s still very early days for 5G, however. While about 40 percent of survey respondents are participating in trials or proofs of concept, nearly a third said they are content to monitor developments and 12 percent will wait for standards. Initial air interface standards are not expected before the end of this year, and it will be much longer before next-generation core standards are in place. Today, for example, there are many more questions than answers about how to handle 5G network slicing.
Our new report is available free to all employees of TM Forum member companies and can be purchased by non-members. You can also find an executive summary here, which is free for everyone to download. Read the report to understand:
- How operators and suppliers define ‘platform’
- The kinds of platform services that are possible and how many service providers are offering them
- Which technologies are important to platforms
- Which services are best suited to a platform business model
- What’s difficult about implementing a platform strategy
- Why open APIs are essential
- How NFV & SDN are related to platform and 5G
- Why standards are important
- Why operators want to implement 5G
- Where CSPs and suppliers are with their 5G strategies, and how in synch they are
- What the main obstacles are to 5G
- Why network slicing is so important – and so difficult
- How TM Forum Catalyst projects are addressing business and management challenges