Everyone has heard politicians talk about the “Race to 5G” as various countries around the world are all pushing to be recognized as leaders in 5G networks. But who cares? If Telia builds an awesome 5G network in Estonia, it really doesn’t affect the revenue picture for AT&T in the USA. Telia simply doesn’t compete with AT&T or Verizon.
Similarly, if China Mobile has nationwide 5G coverage, it really means nothing in terms of their competitiveness with the USA. China cannot export their 5G services. So the Race to 5G is only the first lap of the race!
Let’s talk about something that is much more important for the future of global business: the cloud. As we develop 5G networks with great low-latency connections, the cloud providers are considering how to implement edge computing, bringing both consumer and enterprise services closer to end users.
You can’t export a 5G service, but if you create a great cloud platform, you can sell it globally. So Mr. Trump and Mr. Xi are both too focused on the first step—it’s a funny image to consider, but Trump and Xi should be chatting about MEC instead. The 5G connectivity will be one part of the overall solution. But the investment in localized data centers and software platforms for automation will be the key. Will AWS or Microsoft dominate? Or will Alibaba and Tencent create a better platform? That’s the key to dominating trillion-dollar industrial markets in 2030.
How big is it? The current size of the public cloud services market is around $200 billion. The revenue is dominated by American companies (AWS, Microsoft, Google) that have enabled the automation of office functions such as sales databases and email marketing. There’s a lot more revenue waiting out there to be captured, through industrial automation that can save trillions of dollars in industrial costs.
We’ve recently published our third-annual market study on edge computing and we’ve analyzed five different business models to illustrate how edge computing will play out for telcos, cloud players, and enterprises. It’s a Tower of Babel right now, with each ecosystem speaking a different language. But we’ve developed a Rosetta Stone to help all of these players to understand the constraints and motivations of the others.
So, the Race to 5G is really a relay race, where the telcos run the first lap, followed by the cloud providers, and finally the app developers. In the end, it’s the Race to Real-Time Computing that includes all of these elements. Having a network in place is an important step… but the connectivity is quickly becoming a commodity.
Global industrial GDP is $20 trillion, so the cost savings of automation will save a few trillion dollars. Enterprises should be willing to pay $500 billion or more to unlock such huge savings. Connectivity will be one component of this giant automation marketplace.
Joe Madden is principal analyst at Mobile Experts, a network of market and technology experts that analyze wireless markets. The team provides detailed research on small cell, base station, carrier Wi-Fi, and IoT markets. Madden currently focuses on trends in 5G, IoT, and enterprise markets for wireless infrastructure. Over 26 years in mobile communications, he accurately predicted the rise of digital predistortion, remote radio heads, small cells, and a mobile IT market. He validates his ideas with mobile and cable operators, as well as semiconductor suppliers, to find the match between business models and technology. Madden holds a physics degree from UCLA. Despite learning about economics at Stanford, he still obeys the laws of physics.
"Industry Voices" are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.