The cloud of the future is going to be very dependent on the connectivity and bandwidth of the devices it serves as we move forward into a world of autonomous everything managed by wireless infrstracture in the cloud. The immediate step to help us get to the autonomous world is going to be the next-generation wireless network, commonly called 5G. To get a better understanding of where we are on the journey to 5G, let me present some of the Cleveland Research highlights from the Mobile World Conference 2018 at the Fira Gran Via in Barcelona, Spain.
The wireless infrastructure market as a whole has been on the decline as of late, with a decrease of 3–5% year over year in 2018, and it is predicted to be flat to down in FY19. There was a lot of talk about wireless service providers adopting more of a data center investment type of strategy for their networks, and it would appear that these service providers are also focusing their time and resources into virtualizing the networks. Cisco and VMware may turn out to be the main contributors in this area of focus on network virtualization. There appears to be a consensus that the earliest 5G and Internet of Things (IoT) opportunities will be for connected car, manufacturing, and enhanced mobile broadband.
There are going to be some interesting differences in the methods and means with the 5G rollout. The 5G networks are expected to be implemented in a slow and steady pace over a longer period of time in comparison to the LTE rollout. The 5G rollout is expected to be limited to the large metropolitan areas to start with. Service providers also appear to be taking advantage of using more white-box solutions for the conversation instead of the branded telco OEM solutions than they have in previous upgrades.
The budget for the telco infrastructure and virtualization appear to be coming from the same 5G budgets for the service providers. This would seem to indicate that as the service providers spend more on the virtualization of the network, they will also spend less on the current wireless infrastructure. This focus on virtualization is expected to help usher in new services and solutions.
Some feedback from wireless service providers about their 5G investment strategies indicate that there is going to be a primary focus on providing and offering more solutions and services based around 5G and a secondary focus on providing the network itself. Service providers are adjusting their investment strategy to match more of a traditional IT data center spend and then to take advantage of the cloud service providers’ capabilities for the 5G build out.
The main 5G use cases that we as consumers will see first are fixed wireless. The American and European operators have announced plans to deploy the fixed wireless technology as early as this year. Enhanced mobile broadband will be another of the earliest opportunities to drive the demand to 5G, as the expectations are that consumers will be utilizing more content and services through an increase in the number of devices presented. The connected car is an area that has developed faster than expected a year ago. Currently, 20–30% of vehicles have some sort of built-in connectivity, and this is expected to increase to 50–60% over the next few years. Finally, manufacturing and other industries are looking into opportunities with IoT and, with that, incorporating AI into manufacturing automation. It is also looking at ways of utilizing augmented reality in the industrial space.
In closing, 5G is going to play an important part in cloud connectivity as we move into a more autonomous world. VMware’s Network Function Virtualization (NFV) has an opportunity, and the expectations of the partners are for it to really become more meaningful over the next couple of years as service providers ramp up their 5G investments. Software and virtualization are going to play a much bigger part in the 5G rollout, which might not be such good news for the telco OEMs and could possibly be about new innovation and change from the telco OEMs to keep up and evolve at the speed of technology.