RAN Vendors Targeting Enterprises Aren’t Waiting for 5G

Ed Gubbins - Senior Analyst, Mobile Access Infrastructure
Ed Gubbins – Senior Analyst, Mobile Access Infrastructure

Summary Bullets:

  • The lull between 4G and 5G operator spending motivates RAN vendors to penetrate enterprises before 5G, aided by new RAN technologies relevant to enterprises.
  • In penetrating enterprises, even RAN vendors with enterprise businesses face challenging organizational changes and market hurdles.

When RAN vendors talk about 5G, much of the discussion tends to involve targeting enterprise verticals and the Internet of Things (IoT). Take Ericsson, for example, demonstrating unmanned construction vehicles and remote surgery concepts. But, like many elements of their 5G discussions, RAN vendors aren’t waiting for 5G to target enterprises.

In recent months, Nokia has been promoting a strategy of penetrating enterprises, including web-scale firms, extra-large technology-centric enterprises and public sector entities in addition to IoT. And although these efforts could be extended with 5G, they are starting with LTE. For example, Nokia’s public sector plans include LTE for railways, and its plans to target large enterprises include LTE solutions using unlicensed spectrum.

Part of the urgency behind the enterprise push is easy to see. For some time now, RAN vendors have been caught in the valley between global 4G and 5G spending waves, and the expectations for near-term revenue from mobile operators aren’t very inspiring. Expanding the focus of their RAN businesses to include enterprises yields a potential near-term growth story to compensate for that lull in operator spending.

That said, breaking through to new customer bases isn’t easy – finding fertile prospects, understanding the needs of a new client base, explaining the (new) value proposition and building trust, etc. In the past, we have talked about the potential for RAN vendors with existing enterprise IT businesses – e.g., Huawei, NEC, Samsung, ZTE – to leverage those assets for the benefit of their RAN businesses. An enterprise customer base, enterprise-facing go-to-market channels and a brand presence in enterprise markets can all help RAN businesses expand. But, even with such assets, challenges remain. For example, Samsung has deep enterprise-related assets that could benefit its RAN ambitions. And its activities around public safety and IoT use cases show it has made headway in these areas already. But, as the company eyes enterprise-related 5G opportunities, its executives have acknowledged operational hurdles in drawing efforts and incentives across organizational silos. That’s why, last June, the company launched a new team to foster collaboration among different business groups on everything from product and industry standards development to go-to-market moves.

Huawei, meanwhile, began bridging similar divides some time ago. In mid-2014, the vendor started making internal organization changes to encourage more communication between its enterprise and carrier groups – enabling its fast-growing enterprise business to inform both solution development and go-to-market efforts in relevant wireless areas such as small cells. This has long been important to Huawei because, for years, its LampSite solution for large enterprise environments has been the most aggressive effort within its small-cell strategy. The vendor created a business unit within its Carrier Networks group (separate from its Enterprise group) to address enterprise verticals with a range of access solutions including small cells, WiFi access points and LTE macrocells.

Huawei admits it has faced headwinds in the market; for example, different product and upgrade cycles between WiFi APs and small cells can complicate sales efforts. But, the advantage Huawei is chasing is validated by the envious moves made by some of its rivals. Ericsson acquired WiFi specialist BelAir Networks in 2012, partnered with HPE for its Aruba WiFi business in 2015 and expanded its partnership with Cisco to include WiFi assets in 2017. Nokia introduced its own in-house WiFi access points in 2016.

Whatever obstacles RAN vendors have faced in the past trying to straddle the divide between operator and enterprise, they may face new ways to overcome those obstacles in 2017. Emerging technologies and business models pose new opportunities in this area: Citizens Broadband Radio Service (CBRS), license-assisted access (LAA), LTE/WLAN aggregation (LWA), LTE/WLAN aggregation with IP Sec (LWIP) and MulteFire. These aren’t 5G technologies, though some of them have been swept into vendors’ 5G stories. So, vendors and operators don’t need to wait for 5G to use these technologies to penetrate enterprise verticals, but they can also use them to enhance enterprise-related 5G strategies once 5G arrives.

And beyond technologies, vendors are more likely to succeed here, and in 5G, if they have already begun the organizational, operational and customer engagement work necessary to expand meaningfully into enterprises.

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