5G adoption is increasing in industries, Capgemini report says

TechRepublic’s Karen Roby spoke with Shamik Mishra, VP and CTO of connectivity at Capgemini, about industrial 5G adoption. The following is an edited transcript of their conversation.

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Shamik Mishra: Our report had some surprising results as well. We actually surveyed over a thousand industries and enterprises and we tried to figure out what kind of 5G adoption that they’re really looking for. And if you look carefully at the outcome of this report, it seems that over 40% of the organizations expect to roll out some kind of 5G solutions in at least a single site or more in the next two years, so that’s extremely encouraging. That means 5G is indeed picking up for industries and that’s also quite important for the overall 5G market, because unless there is an adoption, there wouldn’t be an innovation. So, the innovation in terms of what kind of applications we can build for 5G, what kind of productivity improvement we can do for 5G, through 5G rather. And what kind of new experiences can be built for 5G. That cannot happen unless industries adopt it.

So, this is the first one. The second interesting outcome that came out is there are multiple ways to deploy 5G today. You can go with an operator, a telco operator who provides a network slice on which the 5G is built out for an industry, or there are certain industries who are willing to build their own 5G network on their own, and they will acquire spectrum in some ways. That’s very interesting because the different rollout means each of the industries would have a different model for driving their 5G adoption, so that’s quite an interesting outcome. And we see the split roughly 50/50 there.

The third one is that 5G alone will not work. I mean, at the end of the day, the 5G is the connectivity pipe. What actually is at the end of the pipes are most important. The devices, whether the devices are ready for 5G prime time, and whether the applications that will be consuming the data generated by the devices are equally important. And these applications require either a cloud solution or an edge compute solution. And that innovation also has to go hand in hand with 5G. So these were the three major takeaways from the report, which is, innovation will drive how 5G will be taken up by the industries in the coming years.

Karen Roby: Shamik, when you look at this report, is there anything that really stood out to you, really surprised you?

Shamik Mishra: Well, I would say that there are a couple of things that surprised me most, which it wasn’t really surprising, but I was kind of expecting it. But the depth of it varied from industry to industry. One of them is that many of the industries for them, 5G is new. It’s something new. They haven’t used it before. Some of them are trying to actually figure out how to build an organization or how to expand their IT organization, or their connectivity organization in order to adopt 5G. And many organizations actually are still going through that transformation. Some of them are very early in even thinking that through. Which is surprising, because we expected people to actually at least build an organization going forward.

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The second thing that surprised me was that there are a lot of initial trials and early implementations that are happening. These may not be production ready yet, but as many as 60% of early adopters said that 5G is helping them realize higher operational efficiency. Now that’s a great news, but at the same time, it is also a little worrying because we also need to understand how to make revenues out of 5G, not just improve cost. That’s another surprising factor I would say that came out of this particular report.

The third one, which was a little more surprising, is that the industrial organizations are quite optimistic about 5G, that it will drive their revenues. But how the business model would get implemented, what new products and services would get implemented, isn’t very clear. That also means that enterprises will have to open up their innovation engine. Look at more open innovation, ultimately. It’s bringing in a larger developer ecosystem to build the innovation that will drive their industries.

Now, if you go back and look at the mobile community or the mobile technology in 4G, the whole application ecosystem that drives the majority of the mobile commerce today was innovated not by the telecom industry, but it was innovated by people outside the telecom industry. The same thing should happen for the industries as well. The innovation will be driven from outside. How open innovation will be eventually implemented by industries are going to be very, very important. And that, surprisingly, is still not very clear from the report.

Karen Roby: When we look say a year down the road from now, how will things change? What will be the state of 5G?

Shamik Mishra: Oh yes, absolutely. So in the next year or so, we would see more real-life implementations. We expect the number of early trials to go up at least to maybe double or even triple the number of initial trials that are going on today. We would see a lot more industries collaborating with each other. We have already seen that happening. There are 5G automotive associations, there are 5G connected industry associations, who are actually coming together to solve a certain problem around 5G. Which is extremely encouraging because industries do need to come together so that they can solve the problem together, rather than trying to solve problems in isolation. So that’s something we really would like to see in the next one year. And I’m pretty confident that will be the case.

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But we would also like to see, again, it’s my personal opinion, to see more and more application developers from outside the industry join the 5G bandwagon. They start to innovate around 5G. And an application developer, if they get access to high-speed networks, more granular information of how a 5G network works, gets more details about how a 5G network is performing, I think the innovation engine, the global innovation engine can be charged and a lot of new applications and use cases will get built. And I personally think that in the next one year we will see more of that.

The third area, which I think is going to be most important, and I’m pretty sure that’s going to happen, is a creation of a business model that works for each industry. A business model for an automotive will be very different for a business model for maybe a manufacturing or shipping or transportation like trains. So, the business model for these individual industries have to be developed first. So what kind of ecosystems the industries should build, what kind of partners they need to onboard, what would be their end-to-end solution that they would offer to their customers? What kind of operational efficiency do they need to attach to that? What kind of sustainability goals they need to meet with 5G and what kind of security implications they need to learn out of 5G, those are going to be very, very important in the next one year. I’m pretty sure a lot of work will happen in that space.

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