Google is entering the private 5G space, so the story goes, but what it’s likely doing is a bit more profound than that. Does it mean that “private 5G” is going to take off? Does that mean that public 5G is in even more trouble than some have said? Is something even more potentially disruptive going on? Let’s see.
We all know what public 5G is; the next generation of mobile broadband, voice, and messaging. Defining private 5G isn’t as easy these days. Some vendors believe that it’s enterprise deployment of 5G technology to create their own network. Some believe that it’s really “private-5G-as-a-service”, and that’s pretty clearly what Google is promoting. How does p5GaaS (to coin an acronym of convenience) work and is it really a game-changer? That’s the deeper view of my opening questions.
Let’s start with what I think is a fundamental truth, which is that the average enterprise has no solid reason to consider private 5G. We know that because there’s been private wireless versions of 4G available for years, and it’s not exactly swept the market. The truth is that the average enterprise is perfectly fine with WiFi and public carrier wireless services, because that’s what they now use.
I’ve chatted with enterprises who do have a justification for private 5G, and they tend to be companies with spread-out campus operations. I’ve seen it in factory settings, in transportation hubs, warehousing, and so forth. In nearly all the cases where a “justification” has turned into an actual deployment, there’s been a need to support both reliable telephony and data, and it’s also likely there’s an element of mobility in their need for data connectivity. Those who argue that IoT will be the driver of private 5G are right in that it is a driver, but wrong supposing that it’s a driver that will impact a substantial market segment.
Given this, what the heck are vendors thinking with the private 5G push? Answer: Wall Street creds. Many vendors and startups benefited from the 5G hype wave, but 5G has turned out to be what really should have been expected all along, a simple evolution of cellular communications. The big revenue explosion that many had been talking up was clearly not materializing. Solution? Find another reason to say that big bucks were coming. Thus, private 5G explosion.
Of course, as I’ve noted, private 5G wasn’t destined to explode. The cost and complexity of creating your own cellular network would be justified for only that small segment of enterprises with specialized communications needs. But given that, suppose that you could offer 5G in as-a-service form? Lower the bar on the cost and complexity challenge and maybe you’d get some more buyers. It was (and is) a new slant, mixing cloud and private 5G, so the media was in. The Street might be OK with it too.
Cloud providers like Amazon, Google, and Microsoft don’t really need the hypothetical p5GaaS revenue, though, so why would they push the concept? Answer: They want to host public 5G elements, and do so as an on-ramp to becoming the player who fulfills the requirements of the “telco cloud”, which is really more about edge computing than about 5G.
There are credible, if yet unproven, applications that demand processing hosted closer to the point of activity, meaning “the edge”. The common challenge for all of them is the “first telephone” problem. Who buys the first telephone, given that there’s nobody for them to call? There are plenty of things that edge computing might do, but who will plan to do them, absent any available edge computing services? Who will offer those services, absent anyone really planning to use them? Bootstrapping the edge is complicated, but 5G promised at least a way of getting things started.
5G requires hosted virtual functions, which obviously requires something to host them on. Most of the requirements would focus on the metro area, where user concentrations are high enough to justify resource pools and where user-to-hosting latency is low. Those same factors are the underpinning of the generalized applications for edge computing, so 5G-justified resource pools could also serve as edge computing resources, making edge services available and encouraging the planning of applications that require them.
Google, despite very strong cloud technology, hasn’t been able to gain much, if any, market share in cloud computing services. The last thing they need is an emerging edge computing opportunity that they can’t address. There is clearly interest among the network operators for 5G as a service, but much of the reason for that is that the operators themselves don’t want to capitalize telco cloud, given that so far 5G is mostly a radio access network (RAN) play. That suggests that the current telco opportunity for 5GaaS could be very small.
The best solution to that, from the cloud provider perspective, is p5GaaS, but in a particular form. Google’s approach is to offer p5GaaS as an application of Google Distributed Cloud Edge. This is Google’s “cloud-on-the prem” model, announced last year, and it extends the Google cloud right onto customers’ premises, using customer-provided hardware. Google joins its competitors in deploying a model of edge computing that’s slaved to their cloud, yet capitalized by the buyer. If GDCE proves popular enough, even if that’s just in select locations, Google can easily push its own hosting toward the edge to tap the additional potential revenue.
Seen in this light, Google’s push for p5GaaS makes a lot of sense. They cannot afford to let other cloud providers ride private 5G to extend their cloud onto customers’ premises. It is possible that there will be no third-party edge computing deployed at all; that all that will happen is that the cloud-as-a-platform will end up extending outward to customer equipment. If that happens, could the cloud become effectively the data center platform? Companies like Red Hat and VMware, after all, want the data center platform to become the cloud platform.
The other possible strategy Google may be pursuing is simply dominating the telco opportunity. As I’ve noted in other blogs, telcos in my experience have seen Google as less a threat to them than the other cloud providers. Google is the only company that Tier Ones solicited me to contact on their behalf (Google at the time rebuffed the initiative, but this was before the cloud wave) for a relationship. Among the cloud providers, AWS has the startup businesses, Microsoft generally has enterprises, but Google lacks a big core constituency. Telcos might make a very nice one.
Of course, all of this demonstrates Google’s technology more than it validates their marketing/positioning, and that seems to be their problem with the cloud. I would argue that Google has already done more for cloud technology than any other company, and it’s gotten less for its efforts. I’m not sure what’s going on with Google in the engagement process, but the need to fix that just as much as they need to advance their cloud capabilities.