Anyone who reads tech news or watches TV probably realizes that 5G smartphones are taking off. A part of the reason is that most of the major smartphone vendors make 5G a feature of their newest models, which makes 5G less a choice than something that a new phone pulls through. The question, of course, is whether the growth of 5G phones will somehow alleviate the growing cynicism about 5G’s promise, or make it worse.
In my blog on the Street view of 5G earlier this week, I noted that Wall Street’s forecasts show that 5G investment will peak in 2023, which likely means that any impact of new technology on the 5G market, and on the evolution of 5G toward a general edge computing model, will have to happen by then. One interesting question this point raises is whether early 5G adoption might actually hurt edge computing, and even 5G innovation, by accelerating deployment when few innovative offerings have matured enough to be credible. Could 5G’s early handset success be showing this risk could be mounting?
I’ve had a chance to ask several hundred people who got 5G smartphones whether the 5G capability had changed their experience. About ten percent said they had, and the rest said “No!” While it’s difficult to get this data accurately, it appears that only about thirty percent of those with 5G phones actually had 5G service available to them for any significant amount of time. The very few who were tracking whether they were on 5G or not indicated that they could not see any clear difference in how their phones performed when they were on 5G or LTE. What this seems to prove is that the 5G user experience doesn’t justify the hype, but that doesn’t mean that 5G phone success won’t be good for 5G…in the long run.
There is no question that 5G’s benefits to the average user have been seriously overhyped, and frankly no question that it was destined to be overhyped from the first. “News” means “novelty”, not truth, and in an ad-sponsored world, clicks are everything. You don’t get clicks by telling boring truths; exciting lies work way better. People justify the hype by suggesting that in order to get technology advance, we have to make the advances seem consumable, populist. OK, we did that, but now reality is setting in.
How 5G handsets will impact 5G overall, and in particular the development of “real” 5G-specific applications, depends on the tension between the negative force of disillusionment and two forces that act to promote 5G. One of those forces is the force of availability, and the other the force of desperation.
Every mobile technology succeeds primarily because it becomes pervasive. It’s difficult to imagine how 5G applications (whatever they are, and whoever might create them) could develop without extensive 5G availability, and it’s hard to see how that can develop without a large number of 5G smartphones. Were we to see a very slow uptick in 5G handsets, we could justifiably wonder if the whole 5G thing was a hoax. That’s not going to be the case.
We are already seeing a lot of 5G service availability, and that’s going to continue thanks to the growth in 5G handsets. With that, we’re eradicating the most basic battle for 5G applications, which is some 5G to run them on. Every 5G tower is a point from which a 5G future could be projected, and every 5G-committed operator is a competitor in a market that, to avoid price commoditization as users figure out that 5G really doesn’t do much (if anything) for them, is sure to try some innovation.
That attempt is going to be delayed in the near term, though, because a big part of the 5G handset success is attributable to smartphone incentives launched by the operators. If the services themselves aren’t differentiating, maybe the phones can be. Of course, there are only a certain number of phones that have star quality, so differentiating on phones isn’t going to last, and desperation will set in.
It might have set in already, in some ways and for some operators, and the relationships between 5G operators and public cloud providers may be an indicator. Some see this as a pure cost-driven alliance, but that’s a bit of an oversimplification. Yes, public cloud relationships offer operators a first-cost benefit, reducing the cost of building out a wide-geography carrier cloud when there are only a limited number of uses for it. In the long run, if hosting features is the best/only path forward, then network operators will bear higher costs because of public cloud profit margins.
The alliances are justified in the long run if operators can harness public cloud providers’ capabilities and knowledge to explore additional applications, services, and features. What I’ve heard from operators this year suggests that there are some in the organizations who see that, who understand that 5G “applications” have to be first new, and second, uniquely linked to some aspect of 5G. It’s very difficult to see how those requirements could both be met through anything other than edge computing applications.
There’s been a lot of operator interest in function hosting, including the NFV initiative, but the fact is that for a variety of reasons, the software side of 5G hosting and edge computing hasn’t even come close to the richness that the cloud has. While some major vendors launched “telecom” initiatives, these have (perhaps not surprisingly) focused on 5G functionality rather than the hosting ecosystem that would likely lead to a generalized edge strategy. Two of every three operators tell me that they can’t get what they need from the software vendors, and in many cases this is true even when the software vendors have what operators need.
This is the reason why the relationships between public cloud providers and network operators for 5G function hosting could loom large. We don’t have edge computing today because we have no significant resource-pool deployments at the edge. Operators own real estate there and could potentially build out facilities to host 5G elements, which could then be used for those “true” 5G applications. If operators don’t build out, then either we don’t get edge pools at all, or they’re owned by the cloud providers.
There is, of course, the option that the cloud providers in some way “lease” the resources from the operators and provide the software needed, either cloud middleware that can run in these operator-built-cloud-leased edges, or a complete 5GaaS. In this case, whether the edge resource pool would be committed to the operator in a longer-term sense would depend on the specifics of the deal.
The faster an open-model 5G that relies extensively on traditional resource pools deploys, the more incentive there is for operators do do cloud provider deals, because their do-it-yourself hosting decisions would likely take longer to realize. Would that hurt edge computing? It might actually help it a little, because there is near-zero chance that operators themselves will be able to navigate the complicated symbiotic evolution of 5G and the edge. It could hurt if cloud-software giants like Red Hat and VMware decide that they’re too late to grab the brass ring, and stop trying to merge telecom and cloud in a software-centric, hosting-independent way. I suspect that from now through mid-2022 will be the decisive period, and I’ll report regularly on what I’m seeing.