While overall private networks adoption remains low, growth indicators for market commercialization are emerging. The wide proliferation of 5G by traditional wireless carriers indicates that adoption of private networks will follow. Private networks also answer a growing concern around cybersecurity vulnerabilities. Finally, the flexibility of private networks to enhance hybrid deployments will lead enterprise IT to adopt secure private networks for company devices, trickling to OT adoption later. Realizing the potential of Private IoT and 5G networks will require the formation of new ecosystems where innovation will be driven by a collaborative community—from customers, from partners, and from their own people. To do this, they’ll need to:
Meet Increasing Customer Demand: There are currently 900 disclosed private wireless deployments across 350+ organizations. These use cases represent diverse industries, including mission critical resource management and mining operations, industrial and infrastructure projects, and transportation use cases. Focusing on the right opportunities with the right partners will be a critical success factor. Segments showing strong early adoption. high value potential and promising growth include Industrial Manufacturing, Mining & Resources (O&G), Electric Utilities, Education, and Transport Venues (Ports & Airports). Each of these industries reflect strong markets for 5G disruption harnessing the value of high-performance wireless (1-10ms latency, gigabit data rates, etc.).
Adopt Diverse Spectrum Options and Tap into Government Initiatives: Private LTE initiatives are disrupting traditional network and broadband deployments, with flexible infrastructure, services and spectrum access enabling new wireless applications and capabilities across a diverse set of industries. There is a rise in popularity of not just private networks, but of hybrid networks that embrace diverse spectrum options, like CBRS. Also, recent government initiatives, such as the Infrastructure Investment and Jobs Act have promised bold spending to expand networking. Further policy initiatives around cyber security and data privacy may also increase the adoption of private networks. Significant investment and collaborative ecosystem initiatives make the U.S. and Europe (specifically the UK and Germany) the most advanced markets for private networks today.
Understand the Entire End-to-End Customer Experience: Companies often fail to develop networking solutions focused on the right capabilities and benefits because they don’t have a good understanding of what users and customers are trying to achieve and how they want to achieve it. Players can increase their chances of success by understanding the unique wireless networking requirements (i.e. performance, reliability, latency, managed services, etc.) in new applications, such as safety-critical, real-time location systems.
Look for Non-Conflicting Business Models That Encourage Collaboration: Collaborative ecosystems are coalitions of self-motivated market participants that pursue a common goal, not mere subcontractors tied to a “command and control” scheme. Successful market development for new privately managed wireless networks will depend upon understanding and choosing new or modified business models. As control of these networks shifts to more neutral hosts, many new and novel managed services business models could and should emerge.
Build Open Collaboration / Align Partner Behaviors: M&A activity in the private network space is accelerating, with programs like Microsoft Affirmed Networks and AT&T Network Cloud. But M&A is not the only way to build your ecosystem. The customer is buying an experience with a desired result, and the ecosystem partners must work in concert to create a superior experience that provides tangible benefits to all participants. Successful ecosystems are usually composed of proactive participants, not simply a group of companies in and around a particular market space. Accordingly, a community’s design needs to allow participants to invest resources and reap rewards—indeed, to innovate openly with one another—while pursuing individual interests. Players innovating around network software and managed services, such as Expeto, Neutroon, and Allot, are emerging to enable seamless network lifecycle management and hybrid network orchestration, which are disrupting the traditional networking landscape
Act Early, Act Often: Assembling a collaborative ecosystem calls for a balance of timing and participants. Most collaborative opportunities will fail and re-form as learning grows. These communities do not necessarily have a finite window but they need to be initiated early and gain momentum before a competitive ecosystem emerges in its place.
The opportunity for private IoT and 5G networks will be significant. By 2032, the network infrastructure and services market opportunity will be $133 billion and the broader digital ecosystem market for private networks across all venues will be $350 billion. With this highly anticipated growth, industry players will move to capture and expand this value. The U.S., PRC, and broader APJ regions reflect the most promising markets relative to value and growth for Private LTE and 5G reflecting over 60% of the Private Networks global TAM opportunity in 2032.
Private IoT revenue opportunities exist across the entire technology stack, where much of the opportunity exists in industrial manufacturing, supply chain, resource segments and energy. The benefits of IP-based networking have become very clear and this, combined with innovation around Private IoT and 5G Networks, will accelerate the uptake of wireless adoption.
