Editor’s note: The advent of faster-than-ever wireless networks in the form of new 5G means plenty of change and challenges for the communications industry. Technology Business Research Analyst Dan Callahan provides an overview in the second of a multi-part report.
PLANO, Texas – The business case is still a work in progress
Beyond the impressive details, the question of the business case for 5G is still lingering unanswered. When it comes to investment, customers will decide on the business case and not the technological case. When challenged in questioning during the panels, or during the breakout sessions, vendor personnel fell back on the “four horsemen” of 5G use cases: connected car/infotainment, drones, smart city and logistics.
Not only are those extremely high level and underdeveloped examples, but the answer also sidesteps areas in which there is a large amount of IoT development such as manufacturing, healthcare, retail and energy. Unfortunately, in TBR’s assessment the number of use cases that need 5G is limited, and there are alternatives, including Wi-Fi, LoRa, NBIoT and private networks, available now and “good enough” for most stationary facility-centered IoT, such as a manufacturing floor or hospital. Additionally, with much of the data crunching and sorting done at the edge, the importance of sending everything over-the-air is reduced.
Nevertheless, the success of near-term deployments will drive interest in new IoT solutions that may leverage the advantage of 5G. The 3GPP 5G standard is specifically addressing how to provide new efficiencies and deliver new use-cases for 5G. Similar to 3G and 4G, the business cases will need to evolve as operators, vendors, businesses, and vertical industries all understand the new capabilities of 5G.
The importance of 5G could be reduced with increasing shifts to the edge
A large dichotomy observed at 5G Americas versus other industry events, such as one where non-telecom or platform vendors (IBM [NYSE: IBM], Microsoft Azure, Amazon Web Services [AWS], SAP SE [NYSE: SAP], Oracle [NYSE: ORCL]) feature more prominently, is the importance of connectivity in IoT. It makes sense that connectivity is highlighted at 5G Americas due to its sponsors — connectivity is their lifeblood — but TBR is unsure if connectivity will play such a large role in IoT as advances are made in other ICT and software segments, such as edge computing.
The most impactful advancement is the expansion of edge computing. One example used at a 5G Americas panel was connected trucking, with the panel participant highlighting the vast amount of data necessary to be transmitted over-the-air from the truck to a cloud environment.
Yet a business owner may ask, “Why do I need to transmit all that data continuously?”
If the truck is in an accident or a shipment may be late, an exception can be sent to headquarters over-the-air. However, all data about driver performance, predictive maintenance on truck components, and efficiency metrics on how many loads per hour the unit is delivering is not so important that it needs to be delivered continuously. Instead, it could be collected, and even computed inside the truck with onboard edge computing capabilities, and then delivered to a regional headquarters when the truck parks for the night through a hardwired cable on a private network.
The regional headquarters can then further sort the data, filtering out the necessary day-to-day measurements, and then send only the overall critical efficiency metrics to corporate headquarters. The data that ends up needing to be sent through an operator is vastly smaller than what the truck generated, begging the question of whether the speed and bandwidth improvements promised with 5G are needed.
Yes, there will be use cases that will greatly benefit from 5G, such as mobile healthcare or more advanced logistics, but those opportunities are only a fraction of the total IoT market — at least in the near future.
(C) TBR
