With the media asking whether it would really be so bad for operators if 5G were slipped, and whether perhaps the whole idea of accelerating 5G was worthwhile, Cisco is telling the world they’re the most important 5G vendor because they can help operators monetize 5G. I think all these stories are connected, and that we’re just starting to understand the true problems and opportunities associated with 5G.
Let’s start with Cisco’s statement, which is both true and false. The true part is that 5G standards alone won’t do much to create incremental revenue. They’ll facilitate better wireless, but we already know that users won’t pay a lot for more bandwidth. In fact, simply improving cellular service could very well encourage more OTT traffic, increasing operator costs with little or no revenue compensation. The answer to new revenue is new services, not new wireless.
The false part of Cisco’s statement starts with that same point, but includes the statement that the reason Cisco can bring new revenue to wireless is that they know the enterprise. That suggests that enterprise use of 5G could bring new revenues, significant revenues, into operator coffers, and I can’t find any credible way of justifying that statement. The vast majority of 5G “new revenue” opportunity has to come from the broad market, the consumer market. Still, we need to explore Cisco’s view a bit further before we can fairly judge.
That won’t take long, fortunately. Cisco makes three amplifying points. First, “address the challenge of ability, give operators the ability to extend policies from enterprise to mobile infrastructure, and bring more transparency to what’s happening inside the infrastructure.” I’m going to assume that the first “challenge of ability” should be “mobility”, and that either SDxCentral of Cisco misunderstood something. Let’s go from there, then.
On the surface, these three points are nothing but typical Cisco platitudes. What is the challenge of mobility, why do enterprises want to extend policies to mobile infrastructure, and how is lack of transparency relative to what’s happening in infrastructure hurting them? I’m not suggesting there is no such challenge, but it’s not enough to say there’s one without explaining it, then relating it to your own capabilities. Absent that, there is no real story here so far.
Cisco goes on to comment specifically on two other things, the need for vertical market use cases and the value of network slicing to the enterprise…or perhaps lack of it. I think there is a case to be made for the notion that some vertical markets might find a value in a partitioned “network-slice” service, but the case would have to address three difficult points. First, are there things that one or more vertical markets would demand from mobile/wireless service that mass-market wireless couldn’t provide? Second, could a vertical market somehow coalesce into a single slice without compromising those unique slice value points? Third, would enterprises be willing to pay incrementally for these capabilities?
It seems to me that the only credible things that would separate a vertical market’s need for wireless from the mass market’s needs are IoT and privacy. If we were to assume that we had vertical markets who needed IoT much more than the mass market, and that the network requirement for their IoT were fairly specialized so that making the features available broadly would be too expensive or would use up scarce resources, we could make the IoT story work.
The problem is that we’re having just about the same problem justifying IoT deployment as 5G deployment. If we assume privacy is the killer reason for slice-based vertical services, we’d have to assume that the vertical represented companies and people who we didn’t need to protect from each other. Gosh, given that any company’s competitors are in the same vertical market as the company, it’s hard to see how that could be true. Join in a network of competitors to protect myself?
The truth here is that vertical-market slices don’t make as much sense as “horizontal market” slices, slices built on something like smart cities. OK, I know smart cities are as hard to jumpstart as 5G and IoT, but we’re grasping at justification straws here! A smart city has a common need to support commerce, move traffic, keep people safe, and so forth. The enterprises in it could gain a benefit from having a framework for cooperation and communications around these issues, and the issues are cooperative rather than competitive.
The smart-city-centric approach would have another advantage, which is a natural point of concentration of interest. One of the problems with IoT and 5G is finding who benefits enough to drive the necessary early risk-taking. With smart cities, the city itself has the benefit focus and is in a position to do a lot to induce cooperation (tax breaks come to mind).
It might also be true that Cisco’s knowledge of enterprises would help in a smart-city initiative. If, that is, the knowledge was really there, really compelling. The problem Cisco has is that smart cities are really about IoT, about contextualization, about “information fields” (to quote one of my old blogs HERE), than about networks per se. Software is probably the biggest thing you need, and Cisco has never quite gotten the range on software. Today, with IBM/Red Hat and Dell/VMware increasingly looking at the software ecosystem of the future, we have other players better qualified to claim knowledge of the enterprise than Cisco.
But none of this disqualifies Cisco, for two reasons. First, everyone with a better technical claim to a story is a marketing flop, and Cisco is a marketing powerhouse. Who else could spout three clichés and have a network publication run a story around them? Second, Cisco has more enterprise strategic credibility than IBM or Dell, more than Red Hat or VMware. If Cisco really can get something going technically, they have the influence to sell it.
But…and a big “but” …there is a problem with 5G, a problem of value. There is a need to define some kind of community market, because (as the past shows), network services are inherently a community matter. There may be better, bigger, communities than the enterprise, but the enterprise might indeed be an on-ramp to smart cities, and smart cities might be the on-ramp to 5G and IoT both.
5G is falling short because it provides a resource to exploit without defining a mechanism for the exploiting, or a clear and credible benefit to be obtained. As a recent WSJ piece suggests, 5G is to 4G what 4G was to 3G, which is simple technology evolution. But that doesn’t sell products or website visits. That’s behind the stories on 5G’s problems. Could enterprise-driven slices pull 5G out of the hole? Sure. Could Cisco be a catalyst for that? Sure. Could Cisco actually be looking to do that? Sure, but they might also have become so captivated by a good marketing yarn that they forgot that the best sales pitch in the world is useless without something real to sell.
Cisco’s Live event, where the interview I’ve been citing took place, is always a place where glittering generalities rule, and it’s easy to dismiss Cisco’s approach as a victory of form over substance. Remember, though, that Cisco is the most enduring success story among network equipment vendors. A promise, even a hazy one, from a credible source still means something to buyers. It may come down to whether there’s meat behind the message.