One Small Story; Many Big Ones

Our uncle Ralph Ahn was a chronicler of the lives of second-generation Korean Americans in the Los Angeles area. They, in turn, were mostly the children of the first generation that arrived in 1903 to 1905. More than that, Ralph was such a good friend to our mom. 

I cannot actually think of anything "extraordinary" that our second, third, fourth or fifth generations actually "achieved," save to give their children a better life. They will go unnamed, as most Americans will also do. 

What stands out, however, is the extraordinary fortitude it took our grandfathers to leave everything they had known to risk life a hemisphere away. My grandfathers--and those of others in the early community--arrived to work on pineapple and sugar cane plantations in Hawaii or Mexico. 

Grandpa Chung was 15, traveling with his younger brother and no parents. I do not recall that he ever saw his parents again. I don't recall that he worried about his "identity." He had much bigger problems to deal with. 

This is his arrival document.

His story is the story of so many other immigrants to the United States. Their stories--some more similar, some less so--help me think of us as "one." E pluribus unum: out of many, one. 

And that, perhaps, is the story. 

5G Uptake Actually is Not Low: the S Curve Still Holds

It is not hard to find critics citing slow 5G uptake as a problem. It might be more accurate to say 5G adoption is slower in some markets than in others. 

Though we are not yet at peak 4G in every market--4G subscriptions are growing in Latin America, Asia Pacific, CIS, MENA and Sub-Saharan Africa--we likely are past peak 4G in China, Europe and North America, according to GSMA estimates. 

source: GSMA 

Right now, by an old rule of thumb, 5G already has reached the point where consumer adoption has reached and passed a key inflection point. Generally speaking, once any popular consumer technology or product reaches 10 percent of households, the mass market begins to adopt as well. 

source: GSMA 

Consumer uptake in most markets has yet to reach the point where consumer adoption accelerates. So we can expect to see “5G has failed” storylines for some time. Not until consumer take rates approach 10 percent will we see an adoption inflection point for 5G. 

That is the pattern for virtually all successful consumer product innovations. 

source: GSMA 

source: LikeFolio 

Is Edge Computing Really "More Sustainable" Than Remote Cloud Computing?

Edge computing is coming for any number of reasons, including some we do not necessarily and routinely tout, such as support for compute-intensive operations such as artificial reality and other forms of extended reality; real-time process control or any applications that require ultra-low latency. 

Consider power efficiency and footprint. 

“Even with 5G right now, which is a little more power-efficient and has a lot more programmability of the network, from a sustainability point of view, it is impossible to continue transmitting everything to the cloud,” says Stacey Shulman, Intel VP, network and edge computing. 

The actual benefit remains to be verified. Some argue that hyperscale computing facilities and instances are inherently more efficient than small distributed instances. But that only accounts for power consumption per million cycles, and not the full footprint. 

source: Benjamin Davy 

Also, some use cases might require local computing, and the footprint simply must be optimized. The cost of a computing instance or its environmental impact is arguably always secondary to the value of the function: keeping cars from crashing and injuring people, for example, when operating autonomously. 

And different processing tasks consumer different amounts of power.  Still, it has been argued that power consumption does not scale linearly with the volume of computing instances.  

If one considers applications that require the use of artificial intelligence in real time, “here’s a lot of data that can’t go straight to the cloud,” she notes. 

Some analyses already suggest that bandwidth cost savings are a benefit of edge processing. Power footprint might well wind up as among the key benefits of edge computing, Shulman argues. 

Some argue edge computing should be more efficient. But the total impact has to include operating the communications infrastructure, adjust for the types of workloads and utilization of server resources, for example.  

In the past, precisely the opposite argument has been made. AWS has argued that 

remote cloud computing is more efficient, and has a smaller footprint, than “premises” computing at the edge. 

As always with identifying the precise impact of any activity or product, the analysis is complicated and requires many assumptions. 

source: Benjamin Davy 

source: Benjamin Davy

So far, modeling has focused on computing footprint at hyperscale data centers. We do not have enough data, yet, on edge computing instances, except to the extent that we can assume minimum and maximum power consumption for a single physical server or virtualized workloads run on a shared server. 

The full footprint then will hinge on other inputs. Some might also include any substitution effects, where using edge computing reduces the footprint of other activities that are displaced or lessened. 

source: Ericsson 

The point is that we still are not sure how edge computing will wind up, when compared to remote cloud computing,  in terms of carbon and other greenhouse gas footprint.

Uneven Telecom Impact (Still) from Covid

The key metric for Covid-19 infections is debatable. Is it "new cases" or "hospitalizations" or something else? Does it matter which variant is causing most of the new activity? 

source: Google News

Nor is there actually scientific or political consensus on policies to combat the outbreaks. And no less than in any other sector of the global economy, Covid affects connectivity end user demand and supply chains. 

We are not yet done with Covid, it appears. 

source: Global Data 

Telcos Need to Change: We've Been Hearing that for 40 Years

It might be one thing for an industry under threat to agree it has to change to survive. It is quite another matter to figure out precisely where to go and what to become, as part of that effort. And difficulties are greater when roles occur within an ecosystem.

That is the thing about open ecosystems: it is vastly easier to construct new value in the internet ecosystem, compared to the older world of closed networks and applications. 

You might think that is a good thing for connectivity providers: it should be easier to change. But it also is easier for others in the ecosystem to make the changes, and occupy new roles, themselves. In that sense, change is easier for everyone in the ecosystem. But that magnifies the threat of competition.

w3.org 

“The reality of transformational business models and technologies…it is incredibly hard to foresee what is really going to work, and how,” say researchers at STL Partners. 

Firms and industries generally hate uncertainty. It raises questions about where to invest capital, what skills employees require, how to manage demand curves, what products to create. 

One thing seemingly has not changed: advice to connectivity providers to change, which has been routinely heard for four decades. 

“A big question in all this is whether operators have really understood how outdated their traditional operator centric view of the world has become as the industry has changed,” says STL. “Value has increasingly moved to the players that can make all the stuff work: systems integrators and other technology and software players.”

That is what one would expect when vertical integration is replaced by disaggregation; when ecosystems and dynamic marketplaces replace bi-lateral relationships; when friction is removed from business processes by removing or replacing whole segments of the value chain. 

Consider machine-to-machine use cases, which Ericsson notes are built in a fragmented industry context.

source: Ericsson 

Basically, if connectivity providers want to become more relevant and add more value, they are literally forced to consider taking on additional roles in the ecosystem and value chain. That rarely is easy. 

Nor will industry advice-givers ever stop pointing out that telcos have to change, and change faster. All of us have been saying that for 40 years.

Uncertainty--perhaps more than change--is a reality in a connectivity industry that finds its roles changing; new competitors emerging; older value disappearing and new roles as suppliers of value yet to be created. 

IoT, Edge Computing, 5G Private Networks are a "10% of Revenue" Opportunity for Telcos

No matter where one looks--private 5G networking; internet of things or edge computing--it seems observers believe system integrators, hyperscale cloud computing suppliers, solution specialists and infrastructure providers are positioned to reap about 90 percent of revenue in those businesses. 

Mobile platforms, for example,  are being leveraged for private networking. Non-carrier 5G and networking offerings are gaining momentum, says Dan Bieler, Forrester principal analyst. By about 2025, perhaps 90 percent of private 5G revenue will be earned by hyperscalers, system integrators and solution providers, not telcos, predicts TBR. 

source: TBR 

“All major hyperscalers showcased (at Mobile World Congress) how they are getting more heavily involved in the networking  arena,” says Bieler. 

Google is working on network slicing on Android 12 for providing access to Google Cloud. 

Microsoft’s Azure for operators is a 5G overlay on Azure cloud WAN where Microsoft’s internet backbone carries the customers’ traffic.

Amazon Web Services is offering  private 5G solutions and cloud WAN and edge application offerings. 

“A new threat for telcos is on the horizon,” says Bieler. Importantly, “the lines are blurring between cloud computing and networking.”

No matter the stumbles telcos routinely have had in attempting to diversify their business models, or wring more value out of their positions in value chains, such movement remains necessary, if exceedingly difficult. 

Estimates for the total 5G opportunity range from $4 trillion to $6 trillion by 2030, says Dan Bieler, Forrester principal analyst. But the connectivity part accounts for only five percent to 10 percent of this opportunity. 

You can see the pattern in forecasts of internet of things revenue in Africa and the Middle East. 

source: GlobalData 

Or look at “smart city”  IoT revenue by platform.

source: ABI Research 

In one sense, that should come as no surprise. Connectivity typically represents about 10 percent of market opportunity for any network-based product. The rest is devices, operating systems, platforms, enablement and applications. 

To gain more than about 10 percent of the revenue upside, connectivity providers have to move outside that role. That never has proven easy, or successful.

Connectivity and Cloud Computing are Merging: Danger for Connectivity Providers

One big strategic change in the era of distributed, competitive, virtualized computing and networking is that the demarcation between industry participants is becoming more porous. That is to say, formerly-distinct roles are becoming less distinct. 

To put it another way, firms that once were not direct competitors now are emerging in such roles. This is not a new theme in the connectivity business. Encroachment has been happening for close to 20 years,  

according to Michael Porter.

To be sure, product demand also has shifted. People prefer to use mobile networks and devices for voice and messaging. But voice over IP also has destroyed the gross revenue and profit margin of international calling. App messaging has replaced carrier-sold text messaging. 

 

And now mobile platforms are being leveraged for private networking. Non-carrier 5G and networking offerings are gaining momentum, says Dan Bieler, Forrester principal analyst. 

“All major hyperscalers showcased (at Mobile World Congress) how they are getting more heavily involved in the networking  arena,” says Bieler. 

Google is working on network slicing on Android 12 for providing access to Google Cloud. 

Microsoft’s Azure for operators is a 5G overlay on Azure cloud WAN where Microsoft’s internet backbone carries the customers’ traffic.

Amazon Web Services is offering  private 5G solutions and cloud WAN and edge application offerings. 

“A new threat for telcos is on the horizon,” says Bieler. Importantly, “the lines are blurring between cloud computing and networking.”