AWS Re:Invent LAS VEGAS — AWS today announced the availability of a private 5G service for enterprises named AWS Private 5G. In his Tuesday morning keynote at AWS Re:Invent 2021, AWS CEO Adam Selipsky described this new service, available as a preview in the U.S. with other markets to follow. AWS is making available an easy-to-procure starter kit for a fully-managed, pay-as-you-go, private cellular service. This service lays the groundwork for expanded offerings, both direct-to-enterprise and through AWS's communication service provider (CSP) partners.
AvidThink's view is that this shrewd move by the hyperscaler reduces friction for enterprises looking to try out Private 5G (or 4G LTE) while preserving their budding relationships with the telcos and retaining the optionality of multiple go-to-market paths in the future.
What do we know about AWS Private 5G?
AWS Private 5G is a fully-managed private wireless solution based on 4G LTE/5G technology. The initial kit comes with a single small-cell radio, supporting the U.S. CBRS bands with the cellular core (likely a converged 4G/5G core to allow them to shift between 4G to 5G) hosted in a nearby AWS Region.
There's an option to run the core on-premises on a small form-factor (2 RU) AWS Outposts. Regardless, the small-cell radios need internet access for management and data traffic (if the core is in a Region). This means it will likely be another product revision for a fully-disconnected version running in a middle-of-nowhere oil rig. This is notwithstanding previous CBRS demonstrations of JMA Wireless’s XRAN/Druid Software’s core on a COTS server and AWS Snowball Edge at Carnegie Mellon University.
The radios are cloud-managed, and the Spectrum Access System (SAS), as required by the FCC for CBRS in the U.S., is included in the service. AWS has not yet revealed the SAS vendor, but it could be Federated Wireless, given that Federated has a private network offering today on AWS Marketplace.
AWS has indicated the possibility of expanding core and RAN choices for AWS Private 5G, given an increasing number of RAN and core solution providers have been testing their stacks on AWS Outposts and in AWS Regions and Local Zones — think Nokia, Ericsson, Cisco, Mavenir, Altiostar (Rakuten Symphony).
AWS Private 5G supports other spectrum options beyond CBRS, including licensed spectrum. We believe that AWS' partnership with telcos like Dish in the U.S. and other CSPs can facilitate the use of their spectrum.
RELATED: Dish makes a splash, picks AWS to host 5G RAN and core — Industry Voices: Chua
AWS Private 5G adopts AWS' pay-as-you-go pricing. A predictable monthly fee is charged based on two variables: the number of radio units you have and the maximum configured throughput for the network. AWS hasn't publicly shared if there's a minimum commitment period, a floor to the configured throughput, or ceiling to that throughput, or what happens if users exceed that configured number (tier bumps, overage charges). While we enter wait-to-learn-more, the simplified pricing is unlike what we've seen from the telcos to date. The pricing is more akin to private enterprise wireless startups that have adopted Wi-Fi-type pricing and should be more appealing to enterprises.
Nonetheless, the number of devices and Subscriber Identity Modules (SIMs) do not factor into the charges, and the use of the AWS Outposts and the SAS is bundled in. AWS prides itself on the simplicity of the pricing model and the elimination of upfront capital costs. Customers can theoretically order as many SIMs as they want, though likely there will be practical limits per small cell.
Management and operation of AWS Private 5G are through the AWS Console. Access control for the SIM-enabled devices is managed via AWS Identity and Access Management (IAM) service, while monitoring is tied into AWS CloudWatch. Users can set traffic priorities on device groups on AWS Private 5G, allowing for quality of service (QoS) controls.
The ordering process is meant to be easy — a few clicks or a few API calls and a private network will be delivered to the address of your choice. Once the SIMs and small cell radio package show up, a quick install and setup process, aided by a CBRS certified professional installer (required by FCC rules) that AWS can provide if needed, and the network shows up on the familiar AWS Console.
Why AWS Private 5G and why now?
AWS and Amazon's usual answer when asked is that their decisions stem from listening to their customers. In our own private 4G/5G conversations with enterprises, telcos, and vendors (findings which are captured in our recent private mobile networks report), we heard similar challenges: private wireless can be confusing, hard-to-procure and manage, and enterprise end-users don't understand spectrum management. In many cases, getting started requires a large capital outlay, which customers don't want to commit to, given their unfamiliarity with private cellular technology.
Nevertheless, upstarts like Celona (both directly and with their partners HPE/Aruba and NTT) and Expeto (with Rogers) have been trying to simplify private wireless deployments, making it as easy as enterprise Wi-Fi. AWS is looking to help accelerate private 5G uptake, indicating substantial success with trials of the starter kit. It has now brought Amazon's cloud resources, financial strength, distribution might, and partner ecosystem to that same table.
Market impact of AWS Private 5G
Previously, AWS played an indirect role in the enterprise private 4G LTE/5G market through partners. In addition to the CMU example earlier, AWS participates in Verizon On Site 5G with 5G Edge with AWS Outposts, with telco partner Telefónica Germany, and with Boingo at O'Hare airport.
From a partner perspective, the new AWS Private 5G offering for telcos, system integrators or private wireless service providers represents an asset-light approach to on-premises cellular. Through this lens, AWS provides on-demand fully-managed infrastructure, charging a premium for taking on the burden of capital financing, software development, operations, and management — the same as the cloud and edge offerings they have.
However, from a direct-to-enterprise perspective, with AWS Private 5G, Amazon is taking on the full responsibility (with their solution partners) for an enterprise network offering, from SIMs to hardware platform and radios, to the software stack and management. That can be a plus for enterprise customers on AWS looking for a quick-to-deploy private network solution, assuming the cost numbers (which we have not yet analyzed) make sense.
The product will need to mature over time, with new features for fine-grained configuration and improve scaling. We do not yet have any scalability or performance metrics for the offering. However, AWS's Private 5G approach gives AWS a way to rope in telco partners when more sophistication and scale are needed — detailed RF planning, large deployments, spectrum licensing.
As we get more details on the offering, we'll update our analysis, and will check in with AWS on enterprise uptake on this starter kit, but in the meantime, our quick take is as follows:
- The Private 4G/5G market has the opportunity to be as large and perhaps larger than enterprise Wi-Fi today (absorbing part of today's wired LAN market) — even as private cellular coexists with Wi-Fi. Telcos are eyeing the market, and many have expansion strategies built around private 5G. AWS Private 5G will take a portion of that revenue. Despite the potentially sizable direct revenue opportunity for AWS, there's a bigger play in using 5G technology to unlock more enterprise use cases that consume more computing power, more storage, and more cloud services like analytics and AI. That's likely the more significant reason behind this AWS Private 5G move.
- Telcos can look at this as competitive because it competes for the same dollars, but they can also look at this as additional investment from a partner in simplifying the deployment of private 5G. AWS' investment in certifying RAN and core stacks on their infrastructure, simplifying install and deployment steps, improving controls and monitoring could potentially be leveraged by telcos. Telcos that partner with AWS on private 5G can look at the starter kits as lead-generation for them, stepping in when more sophistication and scale are required.
- Private 5G is early, and there's plenty of unknowns. AWS admits that this is a toe-in-the-water for it but reiterates pre-launch positive feedback from trials. This move by AWS can serve as a bellwether of the appetite by enterprises for private 5G, with a pay-as-you-go starter kit approach and simplified deployment. Slow uptake might mean AWS has misread the critical concerns in deploying private 5G and focused on building the wrong features. Or that private 5G isn't as desired by enterprises as we think. We'll know in a few months.
For now, AWS Private 5G is another bold step by AWS (similar to Wavelength and Local Zones) that impacts the telco market. This move will shine an additional spotlight and add to the hype in private 5G/4G. Ease and availability coupled with AWS’ market presence will drive awareness. AWS' move will allow us to collectively learn more about market readiness for private cellular networks at enterprises. If successful, it could accelerate the market for all parties in the ecosystem.
Roy Chua is founder and principal at AvidThink, an independent research and advisory service formed in 2018 out of SDxCentral's research group. Prior to co-founding SDxCentral and running its research and product teams, Chua was a management consultant working with both Fortune 500 and startup technology companies on go-to-market and product consulting. As an early proponent of the software-defined infrastructure movement, Chua is a frequent speaker at technology events in the telco and cloud space and a regular contributor to major leading online publications. A graduate of UC Berkeley's electrical engineering and computer science program and MIT's Sloan School of Business, Chua has 20+ years of experience in telco and enterprise cloud computing, networking and security, including founding several Silicon Valley startups. He can be reached at [email protected]; follow him at @avidthink and @wireroy