Digital services for the Fourth Industrial revolution, spanning across all industries and based on 5G connectivity, have started to form a $2 trillion marketplace. This is a market larger in size than any other available to communications service providers (CSPs) today.
The biggest business value of this transition – and the upside potential for CSPs – will be about the substantial impact 5G will generate for industries. To capture that value, the network needs to transform from a best effort consumer service engine to a predictable connectivity hub for basically any kind of use case able to meet the most stringent and diverse requirements.
Besides new types of connectivity, digital services comprise of service creation capabilities, applications, analytics, monetisation and (distributed) cloud hosting (business slices). A massive number of these business services can only be dynamically created, customised, delivered and assured by streamlined automation of operational processes. In other words, by overcoming today’s Byzantine complexity.
TMForum predicts that up to 72% of 5G revenue growth for telcos is dependent on transformation of operational and business support systems. Unfortunately, the operational transformation of most CSPs is just at the beginning. So, while the 5G era requires a new approach to the design and operations of networks and services to be able to deliver more services to more customers and an attitude of being prepared for the unexpected, there is a long way to go.
Currently, very few services are dynamic but that is shifting. CSPs will soon need to cope with hundreds of new services that need to be created, customised, delivered and optimised dynamically at massive scale. With 5G, a plethora of different legacy and new technology components need to work together, including technologies for network infrastructure, data centre management, edge computing and devices.
Delivering the extraordinary will require operators to transform their business models and swiftly adapt to the need to deliver agile, on-demand services tailored to individual industrial segments. This also includes the ability to operate an entire ecosystem of vertical service providers (VSPs).
Connecting the business to the network
There are many questions in this dilemma. How can CSPs satisfy demand for 5G use cases and get over operational complexity? How can they create services in areas such as automotive, logistics, digital health and factory automation where the different parts that form the business service come from different companies? And how can they deliver a complete service package to end customers and assure that it is working perfectly to be able to monetise it?
First, CPSs need access to a global ecosystem with ready-made application & device onboarding capabilities, including uniform sustainable business models. These models should be based on a fair share of revenue reflecting the party’s value add and the accordance with defined SLAs. Without a digital ecosystem platform that manages the complexity of multi-partner and VSP onboarding, you will feel the pain of case by case integration, testing and business negotiations with multiple partners.
Once this is achieved, CSPs have direct access to a wide and global ecosystem of off-the-shelf vertical applications and associated business models. Would a CSP, for example, like to onboard all components that are necessary for a drone application (such as drone, mobile device, drone control centre and applications such as video surveillance) and do the same for multiple different applications? No, so access to an ecosystem makes things significantly easier.
Secondly, the services that have been created must be delivered to end customers in a highly automated and dynamic fashion. This means three things:
Precise slice definition adjusted for every service, otherwise there will be only very raw and very basic service class definitions that do not match what is really needed by the service
Automated slice & service lifecycle management on unified industrialised processes, avoiding manual lifecycle management with service specific processes that drive complexity and costs
Dynamic data driven per-slice assurance avoiding today’s common static resource allocation and over provisioning
Thirdly, CSPs must keep a close eye on the security of their networks and the services being provided to industrial and enterprise customers. This means investing in technology that enables them to deliver contextual and dynamic end-to-end security. Ideally, CSPs want a solution that can identify and prioritise risks and automate security operations to reduce the attack surface and minimise risk to the business.
All three of these areas of transformation are needed in order to mesh a web-style service creation to operate the business within a growing ecosystem, Amazon style delivery to customers and Fort Knox-style security across all business areas. Failure to achieve this means CSPs will only succeed in grasping a very small fraction of the Two Trillion Dollar opportunity. They will be limited by their business model since most of the new use cases will not work on a massive scale, and they will also face exploding incremental costs, as network complexity steadily becomes unmanageable.
