Ecosystm VendorSphere – DELL VMware Spin-Off

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Two weeks ago, Michael Dell made the big announcement that Dell Technologies would spin off their shareholding in VMware, leading to a share price spike for both companies. A lot has already been written about the move – we would like to highlight a market-based view which we feel will be significant for the two companies going forward.

First let us break down the facts around the deal:

Dell without VMware - A Comparison

As has been analysed threadbare the deal reduces the total debt Dell is carrying and will even reduce the ratio of Dell debt to EBITDA. As a result, it is highly likely that Dell’s credit rating will move up from their current BB+ level to investment grade – which can have a lot of implications for future capital raising. There is also a buzz in the market that Dell Technologies may also sell off Boomi soon and write down another USD 3 Billion approximately in debt.

It is interesting to note that the company has been willing to let go off VMware even though it will dilute their profitability ratios – VMWare business being obviously more profitable than Dell’s traditional businesses which are heavily based on products.

The last few years has seen Dell reselling a fair amount of VMware products. From a number of perspectives Dell has been a key reseller for VMware and now contributes almost 34% of VMware’s revenues.

Dell VMware Reseller Revenue - 2016-2021

This chart is a testament to the power of execution that is inherent within Dell. This performance was aided by market growth – but even then it is remarkable how Dell has been able to scale up taking VMware to their customers. The two companies have very different sales cycles. A VMware sale typically has a longer cycle with a completely different set of touchpoints from the boxes that Dell is so good at selling – which have shorter cycles. The sales cycle for EMC products is closer to VMware’s which would have helped. The sales of the VXRail hyperconverged appliance have also jumped in recent times and this would have driven an equivalent spike in VMware revenues. It is still a remarkable achievement to be able to bring these three diverse groups together and grow revenue.

Market Impact of the Spin-Off

Does it make sense then for VMware to part with their largest reseller? Would it not be better for VMware to continue to drive this and use Dell’s execution skills to drive more growth? Data suggests that there could be another twist to this story.

VMware Growth 2014-2021

VMware has been growing impressively as a company when one looks at the black line and while the growth has slowed in percentage terms, this is on a much higher revenue base. FY2021 revenue is close to 2x the revenue in FY2014. However, when one considers it without the Dell reselling revenue (the red line) it looks a lot less impressive especially in the last couple of years when it is an anemic 3%. When comparing this growth we also see a slowdown of sorts in recent years for VMware.

Comparison Between VMware and its leading competitors

Til Dell acquired EMC – and VMware in consequence – they were working closely with other vendors such as Nutanix and driving solid growth for them. As they pivoted to doing more with VMware, did this then mean that other vendors – of either bare metal or cloud – drifted away from VMware?

Anecdotal evidence suggests that vendors such as HPE became more cautious and tried to diversify their business. It is entirely possible that if we looked at VMware as two separate businesses – one with Dell and one independent – the independent business has been losing share in the last few years.

The optical separation from Dell may then help VMware in rebuilding stronger relationships with the other players in the market including the hyperscalers. This may fuel further VMware growth. To do that VMware will have to manage a balancing act:

  • On the one hand keep growing their reseller revenue with Dell. They are on a good wicket so far and need to make sure this continues. While the revenue from appliances – which come loaded with VMware – is a sure-fire proposition, other growth needs to be harvested carefully. Dell has a multitude of offerings and taking their eyes of the VMware ball is super easy.
  • Build trust and closer ties with the other vendors to keep driving revenue. VMware’s leadership in the market means they already have ties with other industry leaders like HPE, AWS and so on. These will need to become much deeper; VMware will need to build the trust that they will give these vendors equal status even as they are building new appliances with Dell.

The one complicating factor here is that Michael Dell remains the Chairman of the Board of VMware. This may give other vendors pause and they may still want to keep their options open instead of putting all eggs into the VMware basket.

Ecosystm Comments

VMware is at a fairly critical inflection point in their business. The growth of cloud technologies still bodes well for virtual machines which has been their mainstay, but this is also likely to drive growth for more containerisation. They have great products for that part of the business also. However, as container adoption is likely to explode VMware would not want vendors to shift, to say Red Hat, and develop deeper partnerships with them or other competitors. They would like to keep the vendors on VMware – be it a virtual machine or a container. One does feel the future battle for VMware really rests on how well they will be able to grow in the container space. This will have to be done while continuing to innovate to keep the lead in the virtual machine space. Doing it will be quite a feat!!

Finally, what then of Dell? The company seems to have a talent for running businesses which are in long-term secular decline – but running those businesses well. Their PC business is delivering almost 7% operating income and has continued to show growth. The PC market last year was on fire thanks to the pandemic which dramatically increased the demand for devices – growth was double digits for a market which has declined almost every year since 2011. As Dell is fond of saying the PC industry has sold over 5 billion machines since the PC was declared dead!

The server market seems to have stagnated over the last couple of years which is a bit of a surprise given the growth in cloud. Dell’s revenue has declined two years in a row pointing to possible issues which need fixing in that part of the business.

As the company focuses on these key challenges in the market it probably makes sense for them to lower their debt and earn more freedom to operate. One never knows – given the number of surprises that Michael Dell has engineered over the last decade such as taking Dell private, acquiring EMC, stabilising it, then going public again, making a windfall in the process – if he has some other rabbits yet to be pulled out of his hat!!!


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Ecosystm VendorSphere: AWS Partner Ecosystem Matures as Hybrid Cloud and Edge Computing Meet

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AWS has been busy this year moving beyond its stronghold of public cloud to bring infrastructure closer to the enterprise and ultimately to where the end user needs computing most. The global availability of AWS Outposts, essentially AWS on prem, the launch of AWS Wavelength, edge computing embedded in 5G networks, and the extension of the AWS Snow Family of edge devices, have all combined to create a compelling hybrid cloud story. This evolution in AWS’ strategy has required a maturing of its partner ecosystem, building alliances with telcos, co-location providers, and integrators that are all still trying to cement their roles in the hybrid cloud space.

Outposts: The AWS Vision of Hybrid Could

Outposts launched late last year with availability extended to many mature countries in January 2020, in addition to India, Malaysia, New Zealand, Taiwan, Thailand, Israel, Brazil, and Mexico in June. The plug and play system delivers AWS compute and storage from the organisation’s own data centre with a rack that requires only power and network access. The system is managed with the same tools and APIs used in public AWS regions, providing a single hybrid cloud management console. Outposts is targeted primarily at the enterprise space, with the cheapest development and testing units coming in at $7-8k monthly or around $250-280k upfront, depending on the country. Other higher-end configurations include general purpose, compute optimised, graphics optimised, memory optimised, and storage optimised. Monthly installments attract a 10-15% premium over upfront payments.

The launch of hybrid cloud solutions by the major cloud providers and containerised services that allow workloads to be deployed in public and private environments will ensure enterprises are willing to continue their cloud journeys. Security concerns and data residency regulations have prevented many organisations from shifting sensitive workloads to the cloud. Moreover, as industries launch new customer-facing digital services or transform their manufacturing systems, latency will become a concern for some workloads. Hybrid cloud addresses each of these issues by employing either public or private resources depending on the data, location, or capacity needs.

AWS Outposts has two variants, namely Native AWS and VMware Cloud on AWS. Organisations already heavily invested in the AWS ecosystem will likely choose Native AWS and use Outposts as a means of migrating further workloads that require an on-prem environment over to a hybrid cloud environment. More traditional organisations, such as banks, may select the VMware Cloud on AWS variant as a means of retaining the same operational experience that they are accustomed to in their existing VMware environments today.

AWS will rely heavily on its network of enterprise partners for sales, management, and maintenance services for Outposts. AWS partners like Accenture, HCL, TCS, Deloitte, DXC, NTT Data, and Rackspace have all shifted in recent years to deliver the full stack from infrastructure to application services and now have a ready-made hybrid cloud platform to migrate on to. AWS is also in the process of recruiting co-location partners to serve Outposts from third-party data centres, providing another option that enterprises are familiar with. This will likely come as welcomed news for co-location providers that have been fighting uphill against AWS.

Wavelength: Embedding Cloud in 5G Networks

Another major announcement in AWS’s drive towards hybrid cloud and edge computing was the general availability of Wavelength in August. This service embeds AWS into the data centres of 5G network operators to reduce latency and bandwidth transmission. Data for applications residing in Wavelength Zones is not required to leave the 5G network. AWS is looking to attract mobile operators, who previously might have viewed it as a competitor while the public cloud space was more fragmented and open to telcos. These partnerships are another example of AWS expanding its ecosystem. Current Wavelength partners are Verizon, Vodafone Business, KDDI, and SK Telecom. With their own take on edge services, Microsoft has signed up the likes of Telstra and NTT Communications, while Google has enlisted AT&T and Telefónica. Edge computing in 5G networks will be the next battleground for cloud supremacy.

On a smaller scale, AWS has released new additions to its Snow Family of edge computing devices. AWS Snowcone is a compact, rugged computing device designed to process data on the network edge where cloud services may be insufficient. The processed data can then be uploaded to the cloud either through a network connection or by physically shipping the device to AWS. The convergence of IT and OT will drive the need for these edge devices in remote locations, such as mines and farms and in mobile environments for the healthcare and transportation industries.

Competitive Strategies

Openness will become a critical difference between how cloud platform providers approach hybrid cloud and edge computing. While AWS is certainly extending its ecosystem to include partners that it previously would have viewed as rivals, as the dominant player, it will be less compelled to open up to its largest competitors. If it can control the full system from ultraportable device, to $1M server rack, to cloud management console, it can potentially deliver a better experience for clients. Conversely, the likes of Microsoft, Google, and IBM, all need to be willing to provide whichever service the client desires, whether that is an end-to-end solution, management of a competitor’s cloud service, or an OEM’s hardware.


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Nutanix Strengthens Hybrid Offering with Microsoft Partnership

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Nutanix has emerged as a leading hyper converged infrastructure (HCI) provider and is partnering with public cloud infrastructure providers to bring greater value to its customers. Last week saw the partnership between Microsoft and Nutanix, aimed to evolve the hybrid offerings of both providers. As part of this collaboration, both companies will focus on extending Nutanix hybrid cloud infrastructure to Azure. The collaboration will include the development of Nutanix-ready nodes on Azure to support Nutanix Clusters and services. The benefits expected include improved cost, security, and efficiency. Clients will also be able to deploy Azure instances from Nutanix interface for a consistent experience across their cloud environment. The solution is aimed to eliminate re-tooling, re-architecting processes and other technical challenges of maintaining a hybrid environment.

Ecosystm Principal Advisor, Darian Bird says, “The announcement of Nutanix Clusters on Azure is another piece of the hybrid puzzle that will allow Nutanix clients to extend their private cloud environments into public infrastructure. Organisations want the control associated with a private cloud but with the flexibility to scale up and down in the public cloud. Key to hybrid cloud is an additional layer that enables applications to be shifted from one cloud to another, either to prevent lock-in or to choose the best environment depending on the circumstances.”

The deal will also broaden the sales and support experience for Microsoft and Nutanix. “Nutanix has emphasised licence portability as a key characteristic of its hybrid cloud strategy. Microsoft clients will be able to use Azure credits to pay for Nutanix software, while those already with Nutanix licences will be able to port those over to Clusters on Azure. Simplified cloud procurement will be critical for IT departments looking to optimise cloud expenditure across multiple providers.”

Bird adds, “Organisations will now be able to manage servers, containers, and data services on Nutanix HCI, on prem or in the cloud through a single control pane with Azure Arc. Microsoft has realised that producing a true hybrid cloud system requires it to manage as many types of infrastructure as possible, whether they come from niche partners or major competitors. IT departments want the choice of supplier without adding complexity to their systems.”

Nutanix Strengthening its Partner Ecosystem

“The partnership with Microsoft Azure comes only a month after Nutanix announced the general availability of Clusters on AWS. Considering Nutanix’s close connection to Google, it seems likely that it will also launch on the search giant’s cloud before long,” says Bird.

Last year, Nutanix partnered with HPE for the general availability of HPE’s integrated hybrid cloud as a service offering, HPE GreenLake for Nutanix, and the HPE ProLiant DX solution.

Earlier in the month, Nutanix launched its global partner multi-cloud program – Elevate – to bring Nutanix’s global partner ecosystem under one integrated architecture managed through consistent tools, resources and platforms, to accelerate their clients’ multi-product, multicloud roadmap in their transformation journeys.

“Nutanix has made great strides in its shift from hardware vendor to HCI provider and it’s now focused on delivering tools that enable the shift to cloud. These recent moves will help Nutanix catch up to VMware and become a viable alternative in a hybrid cloud environment,” says Bird.


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Tech Spotlight for May – Cybersecurity

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5/5 (2) In his blog, The Cybercrime Pandemic, Ecosystm Principal Advisor, Andrew Milroy says, “Remote working has reached unprecedented levels as organisations try hard to keep going. This is massively expanding the attack surface for cybercriminals, weakening security and leading to a cybercrime pandemic. Hacking activity and phishing, inspired by the COVID-19 crisis, are growing rapidly.” Remote working has seen an increase in adoption of cloud applications and collaborative tools, and organisations and governments are having to re-think their risk management programs.

We are seeing the market respond to this need and May saw initiatives from governments and enterprises on strengthening risk management practices and standards. Tech vendors have also stepped up their game, strengthening their Cybersecurity offerings.

Market Consolidation through M&As Continues

The Cybersecurity market is extremely fragmented and is ripe for consolidation. The last couple of years has seen some consolidation of the market, especially through acquisitions by larger platform players (wishing to provide an end-to-end solution) and private equity firms (who have a better view of the Cybersecurity start-up ecosystem). Cybersecurity providers continue to acquire niche providers to strengthen their end-to-end offering and respond to market requirements.

As organisations cope with remote working, network security, threat identification and identity and access management are becoming important. CyberArk acquired Identity as a Service provider Idaptive to work on an AI-based identity solution. The acquisition expands its identity management offerings across hybrid and multi-cloud environments. Quick Heal invested in Singapore-based Ray, a start-up specialising in next-gen wireless and network technology. This would benefit Quick Heal in building a safe, secure, and seamless digital experience for users. This investment also shows Quick Heal’s strategy of investing in disruptive technologies to maintain its market presence and to develop a full-fledged integrated solution beneficial for its users.

Another interesting deal was Venafi acquiring Jetstack.  Jetstack’s open-source Kubernetes certificate manager controller – cert-manager – with a thriving developer community of over 200 contributors, has been used by many global organisations as the go-to tool for using certificates in the Kubernetes space. The community has provided feedback through design discussion, user experience reports, code and documentation contributions as well as serving as a source for free community support. The partnership will see Venafi’s Machine Identity Protection having cloud-native capabilities.   The deal came a day after VMware announced its intent to acquire Octarine to extend VMware’s Intrinsic Security Capabilities for Containers and Kubernetes and integrate Octarine’s technology to VMware’s Carbon Black, a security company which VMware bought last year.

Cybersecurity vendors are not the only ones that are acquiring niche Cybersecurity providers. In the wake of a rapid increase in user base and a surge in traffic, that exposed it to cyber-attacks (including the ‘zoombombing’ incidents), Zoom acquired secure messaging service Keybase, a secure messaging and file-sharing service to enhance their security and to build end-to-end encryption capability to strengthen their overall security posture.

Governments actively working on their Cyber Standards

Governments are forging ahead with digital transformation, providing better citizen services and better protection of citizen data.  This has been especially important in the way they have had to manage the COVID-19 crisis – introducing restrictions fast, keeping citizens in the loop and often accessing citizens’ health and location data to contain the disaster. Various security guidelines and initiatives were announced by governments across the globe, to ensure that citizen data was being managed and used securely and to instil trust in citizens so that they would be willing to share their data.

Singapore, following its Smart Nation initiative, introduced a set of enhanced data security measures for public sector. There have been a few high-profile data breaches (especially in the public healthcare sector) in the last couple of years and the Government rolled out a common security framework for public agencies and their officials making them all accountable to a common code of practice. Measures include clarifying the roles and responsibilities of public officers involved in managing data security, and mandating that top public sector leadership be accountable for creating a strong organisational data security regime. The Government has also empowered citizens to raise a flag against unauthorised data disclosures through a simple incident report form available on Singapore’s Smart Nation Website.

Australia is also ramping up measures to protect the public sector and the country’s data against threats and breaches by issuing guidelines to Australia’s critical infrastructure providers from cyber-attacks. The Australian Cyber Security Centre (ACSC) especially aims key employees working in services such as power and water distribution networks, and transport and communications grids. In the US agencies such as the Cybersecurity and Infrastructure Security Agency (CISA) and the Department of Energy (DOE) have issued guidelines on safeguarding the country’s critical infrastructure. Similarly, UK’s National Cyber Security Centre (NCSC) issued cybersecurity best practices for Industrial Control Systems (ICS).

Cyber Awareness emerges as the need of the hour

While governments will continue to strengthen their Cybersecurity standards, the truth is Cybersecurity breaches often happen because of employee actions – sometimes deliberate, but often out of unawareness of the risks. As remote working becomes a norm for more organisations, there is a need for greater awareness amongst employees and Cybersecurity caution should become part of the organisational culture.

Comtech received a US$8.4 million in additional orders from the US Federal Government for a Joint Cyber Analysis Course. The company has been providing cyber-training to government agencies in the communications sector. Another public-private partnership to raise awareness on Cybersecurity announced in May was the MoU between Europol’s European Cybercrime Centre (EC3) and Capgemini Netherlands. With this MoU, Capgemini and Europol are collaborating on activities such as the development of cyber simulation exercises, capacity building, and prevention and awareness campaigns. They are also partnered on a No More Ransomware project by National High Tech Crime Unit of the Netherlands’ Police, Kaspersky and McAfee to help victims fight against ransomware threats.

The Industry continues to gear up for the Future

Technology providers, including Cybersecurity vendors, continue to evolve their offerings and several innovations were reported in May. Futuristic initiatives such as these show that technology vendors are aware of the acute need to build AI-based cyber solutions to stay ahead of cybercriminals.

Samsung introduced a new secure element (SE) Cybersecurity chip to protect mobile devices against security threats. The chip received an Evaluation Assurance Level (EAL) 6+ certification from CC EAL – a technology security evaluation agency which certifies IT products security on a scale of EAL0 to EAL7. Further applications of the chip could include securing e-passports, crypto hardware wallets and mobile devices based on standalone hardware-level security. Samsung also introduced a new smartphone in which Samsung is using a chipset from SK Telecom with quantum-crypto technology. This involves Quantum Random Number Generator (QRNG) to enhance the security of applications and services instead of using normal random number generators. The technology uses LED and CMOS sensor to capture quantum randomness and produce unpredictable strings and patterns which are difficult to hack. This is in line with what we are seeing in the findings of an Ecosystm business pulse study to gauge how organisations are prioritising their IT investments to adapt to the New Normal. 36% of organisations in the Asia Pacific region invested significantly in Mobile Security is a response to the COVID-19 crisis.

The same study reveals that nearly 40% of organisations in the region have also increased investments in Threat Analysis & Intelligence. At the Southern Methodist University in Texas, engineers at Darwin Deason Institute for Cybersecurity have created a software to detect and prevent ransomware threats before they can occur. Their detection method known as sensor-based ransomware detection can even spot new ransomware attacks and terminates the encryption process without relying on the signature of past infections. The university has filed a patent for this technique with the US Patent and Trademark Office.

Microsoft and Intel are working on a project called STAMINA (static malware-as-image network analysis). The project involves a new deep learning approach that converts malware into grayscale images to scan the text and structural patterns specific to malware. This works by converting a file’s binary form into a stream of raw pixel data (1D) which is later converted into a photo (2D) to feed into image analysis algorithms based on a pre-trained deep neural network to scan and classify images as clean or infected.

 


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Ecosystm Snapshot: Oracle Continues to Expand Global Cloud Footprint

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4.5/5 (2) In the Top 5 Cloud Trends for 2020, Principal Analyst Claus Mortensen observed that 2020 is a do-or-die year for Oracle if they wanted to remain as a key contender in the Cloud market. Mortensen said, “Oracle has not been able to break into Cloud in the same way as their competitors and has so far not made the same “leap of faith” into this area as similar companies have. Unless the company makes a clear decision about their Cloud strategy and succeeds in communicating it to the market in 2020, Oracle may quickly find itself more of a niche Cloud player going forward.”

Oracle’s intentions to remain one of the leading global Cloud providers becomes clear as they actively expand their global coverage. Last week Oracle announced that, as part of their ongoing regional expansion plan, they have added local regions in Jeddah (Saudi Arabia), Melbourne (Australia), Osaka (Japan), Montreal (Canada) and Amsterdam (The Netherlands). This expands the reach of Oracle’s Generation 2 Cloud to 21 independent locations, and Oracle intends to further add 15 locations by the end of 2020. At OpenWorld last year, Oracle had announced their plans to have Cloud sites dedicated to the enterprise market as well as government customers.

Dr Alea Fairchild, Principal Advisor Ecosystm, thinks that Oracle appreciates the needs of their enterprise customers. “Oracle understands the sensitivity of the enterprise to the location and availability of their data, which remains an issue with Cloud implementations involving large data sets. They have broken some ground as the first public Cloud vendor with data centres in Saudi Arabia, and are putting efforts in to offer a minimum of two regions in almost every country in which they operate,” says Dr Fairchild. “From a corporate user’s perspective, regional data management and appropriate licensing models are still sensitive spots when it comes to database management.”

Getting Ready for the Hybrid Cloud Market

Oracle also appears to be ramping up for the growing hybrid Cloud market. Ecosystm research shows that more than a third of global organisations have adopted the hybrid Cloud and this will only increase. Given the increased uptake of hybrid and multi-cloud environments, Oracle offers preconfigured links between Oracle and Microsoft Azure cloud regions in the eastern states of the US, London, and Toronto, as part of the Cloud interoperability partnership announced in June 2019. Last year, saw another mutually beneficial partnership between VMWare and Oracle, that supports their customers’ hybrid cloud strategies, allowing the VMware Cloud Foundation to run on Oracle Cloud Infrastructure. Organisations can also avail technical support for Oracle software running in VMware environments both in on-premise data centres and Oracle-certified cloud environments.

“Oracle’s Generation 2 Cloud is now available in 21 locations and is on track to have a total of 36 Cloud regions up and running by the end of the year,” adds Dr Fairchild.  “But when compared to AWS, Microsoft and IBM, Oracle still holds a fraction of the market share.  They can be seen as a niche infrastructure provider, but indeed the partnerships with Microsoft and VMware are set to help Oracle’s Cloud business make traction with companies that are adopting multi-cloud strategies.”

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MWC 19 – 5G’s Report Card Shows Key Industry-wide Changes

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4.3/5 (6) When I wrapped up my visit to this year’s Mobile World Congress (MWC) in Barcelona, I had wondered if my pre-trip question of what would the 5G story be after several years of being told that each preceding year was ‘the’ year. However, this year had a very distinct vibe to it, and I was rewarded for my pilgrimage to the Grand Fira.

Let’s not forget that technology takes longer to roll out that all of us want to think and 5G is no different. We have had no excuses since we only have to look at how long it took 3G and LTE to become mainstream and how long the transition from the prior technology took to move to the next generation.

However, the mobile and telecom industry is not the same as it was when earlier telecommunication tech was being upgraded. In the past hardware, benchmarks feeds and speeds dominated the marketing messages, but now it is about software, cloud and ecosystem collaboration. Gone are the days when the telecom equipment vendors ruled the conversation about their technology – that has clearly been replaced by IT companies leading the charge with topics such as virtualization, IoT, analytics and new services. Once there was a US automobile commercial that touted the latest edition of its cars was ‘This is not your father’s Oldsmobile’. Well, 5G is not your father’s telecom infrastructure!

This time around, operator and equipment vendors may have to take the collaborative partner role in any new digital solution. Instead of 5G projects being dominated by Ericsson or Huawei for example, there is a role for the likes of VMware, Microsoft, and Salesforce to be the lead company. In some cases, it could be Bosch, PTC, or Siemens while in others it could be Audi, BMW or Mercedes. The overall trend here is that all of these companies are being digitally driven to deliver new services to a customer that is firmly at the center of an ecosystem. The one industry sector who might lose out could be the telco operators who could be squeezed by the surge from IT vendor relevance, despite them investing heavily on 5G licenses. However, this time the operators are in a much stronger position to be the perfect channel for the massive amount of intelligence-laden data being created by smart connected devices that are not typical mobile devices.

So what was the outcome at MWC? I visited both the Huawei and Ericsson booths following pre-MWC briefing sessions to see if the customer buzz was there – and indeed it was.

 

Huawei Stand at Mobile World Congress 2019

 

Ericsson may have won the prize for the most crowded booth, while Huawei’s sprawling booth wins the most lavish and largest booth. The two company’s 5G messages could not have been more different.

The Big Two

For me, Huawei had invested heavily in making its hardware products very compelling for operators to install. Clearly, there had been a lot of research had gone into replacing existing infrastructure with massive performance upgrades and deployment friendly attributes e.g. size and weight of base stations that could be mounted by individuals rather than by cranes. The result of this strategy is that Huawei’s customers can quickly deploy 5G platforms with lower CapEx and OpEx thus creating significant incentives for operators to migrate to 5G networks.

Ericsson’s leading story was about migrating to 5G by highlighting its key enablers (i.e. carrier aggregation, LTE-NR spectrum sharing, and dual mode 5G cloud core). It appeared that Ericsson had moved its message off hardware (which, by the way, is still table stakes in any selection process and Ericsson had plenty of new 5G related offerings) and onto a strategy of smooth evolution and deployment at scale – a much more business leader discussion than a network, driven by software. Finally, both companies had strong messages around their AI capabilities to help their service providers make sense of the growing complexity of services that will be generated by the connected smart IoT devices.

The Importance of IT Software On 5G

IT and industrial companies played an increasingly important role at this year’s MWC as service providers and they became involved in deeper partnerships. 2019 was the year when the gaps for 5G between the network and IT services were being filled in. For example, I saw AR (augmented reality) solutions by PTC supported by Microsoft and being fed by data off a 5G network. This showed how industry, cloud and network service providers will accelerate new technologies.

In another example, Salesforce showed how Edge Computing events triggered Salesforce SaaS-based enterprise management services while being supported by AT&T’s 5G network and the modules being designed and tested at AT&T’s Foundry. Here, AT&T 5G network was being used as a high-value channel for Salesforce’s customers to run their business functions at the edge of the network.

Digital twins have shown up as a digital representation of a physical device or asset. However, this year, I saw a Wipro example of how 5G could drive digital twin concepts beyond physical assets and into the workflow, supply chain management, logistics and worker safety. Every ‘asset’ that was to be used in a factory floor was digitized into a digital twin and then a 5G network was used to monitor and manage every aspect of the factory. It seemed that Industry 4.0 had arrived in its full glory.

Finally, VMware continues to be the IT company that service providers will either love or dislike – I still don’t know which one it will be. VMware’s virtualization and cloud management capabilities have been extended right into 5G networks. For example, NFV (Network Function Virtualization) is critical to operators as they slice the 5G bandwidth into the appropriate services. VMware has its strategy correct when it says that it could virtualize the network just as it has with the cloud, but in doing so is making itself either a partner or a competitor of the operators for their 5G services revenues. 2018 was the year when VMware made a big splash at MWC, 2019 was the year when they showed that they have something to offer – will 2020 be the year when they take over the network software virtualization profit pools just as they did with the enterprise server virtualization market?

Crawl, Walk, Run

In conclusion, MWC 2019 was the year that the 5G gaps to make end-to-end infrastructure solutions where clearly being filled in. Service providers had stepped up their willingness to be part of the customer-centric ecosystem that is almost certainly being led by IT software companies. Telecom equipment vendors were offering technology solutions to speed up 5G deployments while making forward compatible solutions much easier. Finally, 5G-supported applications remain the last piece of the puzzle that MWC hasn’t addressed fully. As a result of the massively varied 5G use cases, there is still a look of curiosity on which industry will be the lead for 5G – will it be the auto industry with autonomous cars, will it be Industry 4.0 and the smart factory, or will it be smart cities with video surveillance. In addition, it is certain that IoT is still very much a necessary part of any 5G strategy just as AI outcomes continue to fuel IoT-based sensors in technologies such as the self-driving cars, AR, and digital twins. 2019 may have been the year that decided that it won’t matter whether the connected IoT device used licensed (NB-IoT) or unlicensed (LoRa) spectrum protocols as both will be seamlessly connected to a 5G network. IoT was not dead, it had simply grown up and was now integrated with more valuable solutions.

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