Sunday, December 2, 2018

Size of Network Slicing Depends on How We Count It

The network slicing market might be relatively small if one considers the sales volume of network infrastructure, perhaps large if one measures “value” created by network slicing.

It all depends on how one counts. It might be reasonable to predict revenue in the hundreds of millions for the former; billions for the latter.

That is the same problem one faces when comparing the value of goods sold using the internet, and the “value” of the internet, or of various suppliers within the ecosystem.

The adoption of 5G network slicing for manufacturing alone is expected to create a US$32 billion of value, at a CAGR of 96 percent through 2026, according to ABI Research. “The second biggest revenue opportunity lies in the logistics sector, where the market is projected to increase from US$65 million in 2019 to US$20 billion in 2026, at a CAGR of 127 percent. “

Of course, value created for an industry is not the same thing as revenue for service providers. Nor will it be easy to separate out value created specifically by network slicing, from the associated value of mobile access, network transport, cloud computing and other connectivity contributors that play a role in creation of a virtual network using a network slice.

And even when looking specifically at value for a connectivity service provider, there are net revenue, capital investment and operating cost savings to consider. On the revenue side, “net” revenue often will matter when a “network slice” (virtual network service) actually displaces some other amount of current spending by a customer with a given service provider.

In other cases, the impact include higher incremental sales of existing or new products; churn reduction; longer customer lifecycle or other benefits that are harder to quantify.

Better customer experience, faster time to market, simpler resource management or greater flexibility are some of the contributors to value.


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