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5G Factor: 5G Ecosystem Adjusting

5G Factor: 5G Ecosystem Adjusting

In this episode of The 5G Factor, our series that focuses on all things across the 5G ecosystem, we review recent adjustments by key players throughout the 5G ecosystem including Verizon Business’ debut in the neutral host network segment, Dell and Ericsson commercially debuting Ericsson Cloud RAN software on Dell PowerEdge servers to spur telco cloud journeys, and how Red Hat’s open source approach is making inroads across telco hybrid cloud and Open RAN environments.

Our analytical review drilled down on:

Verizon’s First Neutral Host Deal with Cummins. Verizon created a 5G ecosystem stir in announcing its debut neutral host private 5G deal with Cummins Inc., a manufacturer of heavy-duty truck engines. Cummins is tapping Verizon as the technical lead and anchor tenant for a combo network to be deployed at its Jamestown engine plant in Lakewood, New York. Verizon will collaborate with Ericsson to implement the neutral host model using Verizon’s C-band and mmWave spectrum bands, plus support for 3.5GHz CBRS connections. The move follows T-Mobile already tossing its hat into the neutral host arena with suppliers such as Celona certified on its 4G-based neutral host system within T-Mobile’s “Bring Your Own Coverage 2.0” (BYOC 2.0) program that has the property owner financing and hosting the neutral site. We delve into how the neutral host model can deliver benefits like ensuring all users, such as employees, get the same level of signal across all carriers, vital to making sure emergency calls inside or outside the facility are received as well as the prospects that other operators will warm to Verizon acting as the “neutral” anchor tenant at such sites.

Dell and Ericsson Target Stimulating Telco Cloud Journeys. At Dell Tech World 2024, Dell and Ericsson announced they have bolstered their partnership to push telco cloud transformation journeys forward. To help make this happen, the duo is commercially debuting Ericsson Cloud RAN software on Dell PowerEdge servers underpinned by continuous testing and lifecycle management plus joint services that offer telcos integrated network infrastructure support. They are working together to cultivate customized cloud network transformation journeys and provide guidance on network structures and operational frameworks that minimize the deployment risks across open, heterogeneous vendor environments. We assess the potential impact of the alliance on the 5G market including how Dell’s AI Factory solutions can ultimately play a key role in stimulating telco cloud journeys including the acceleration of Cloud RAN implementations.

Red Hat Seeks to Reduce Complexity Through Open Source Principles. Red Hat is focused on using open source principles to help telcos improve their business outcomes by reducing complexity with open source underpinning Red Hat’s pre-integrated platform approach that includes orchestrating 5G automation, hybrid cloud, AI, and edge computing capabilities. Specifically, Red Hat offers a unified cloud-native application platform that spans the telco’s network from core to edge. To that end, Red Hat has integrated Ericsson Cloud RAN with Red Hat OpenShift to provide telcos more flexibility in choosing a cloud platform. The move comes after Red Hat announced in 2023 a partnership to deliver Nokia’s core network applications together with Red Hat’s cloud infrastructure platforms. We assess the practical outcomes of Red Hat’s portfolio development and marketing strategy as shown by its collaboration with telco organizations such as KDDI, Telenor, Turkcell, Perfectum, and an array of others to help accelerate cloud-native network deployments within multi-vendor environments including progress working with Nokia’s anyRAN framework as well as Mavenir’s Open RAN solutions in the Vodafone Idea network.

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Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

Transcript:

Ron Westfall: Hello and welcome everyone to The 5G Factor. I’m Ron Westfall, Research Director here at The Futurum Group. And I’m joined here today by my distinguished colleague, Tom Hollingsworth, the networking nerd and event lead at Tech Field Day here at The Futurum Group. In fact, I believe we’re coming off a very successful one that is the Mobility Tech Field Day that was conducted last week at Silicon Valley and it focused on Mobility.

And with that in mind, let’s turn our attention to, now, other major 5G ecosystem developments that have caught our eye, including neutral host developments, the partnership between Dell and Ericsson, as well as, hey, let’s look at hybrid cloud and cloud-native capabilities and how that can impact 5G. And we’ll look at Red Hat as a starting point there. So with that debuting, what about you, Tom? How have things been going along for you since we did Mobility Tech Field Day last week?

Tom Hollingsworth: It’s been busy. We’ve been getting all the videos posted from the presentations and just been looking at the statistics that a lot of people are very interested not only in topics like Wi-Fi 7, but of course Private 5G is something that a lot of people who operate these so-called uncarpeted enterprise locations are very interested in. And I think that that kind of will be borne out by some of the conversations that we’re going to have today about where the value is, but also what people need to keep in mind as they start looking at providers who have these capabilities because you know they’re going to want to sell them to you.

Ron Westfall: Exactly. In fact, I was certainly stimulated by the conversations we had at Mobility Tech Field Day, and it’s good news to see that there’s so much interest in the various conversations. And yeah, to kick things off, we will actually segue from Mobility Tech Field Day. But before that, I just want to do a quick shout out that there is other upcoming Tech Field Days. One specifically that comes to mind is Networking Tech Field Day that will be taking place July 10th and 11th, also again, in Silicon Valley. And Tom, can you also share some other upcoming Tech Field Days that people should pay attention to?

Tom Hollingsworth: Absolutely. So we’re going to be on site at a couple of events coming up at Cisco Live as well as HPE Discover. We’re going to have content coming to you, obviously, from Cisco and HPE Aruba Networking around topics like Private 5G, security, wireless. But we also have a cloud focused event that’ll be happening in that in-between weeks. So the second week of June, Stephen Foskett is going to be bringing you some great conversations, honestly from some networking companies like Juniper Networks and some other great companies. Make sure you check out techfieldday.com to see the entire list of presenters as well as the schedule so you can tune in for what appeals to you, maybe you want to hear about hybrid cloud, maybe you want to hear about cloud networking. There’s a good mix of topics for you.

Ron Westfall: Yeah, it’s great wealth and what’s not to like. And so now, here for 5G Factor, I think, something that definitely ties us together is the very technology of neutral host networks. And I think that’s something that’s been around for a while, however, I think, just within the last few weeks it’s gained some high profile attention and I believe as a result some important momentum going into the second half of 2024. And so, with that, I’m looking at the Verizon business announcement specifically where it revealed its first customer for its new neutral host product, which combines a neutral host network with a Private 5G network for an enterprise located in upstate New York, Commons.

Now as a quick refresher, I basically summarize what is a neutral host network, I think most folks understand that. But some people might be looking at this for the first time. And so what it’s enabling is a set of networking equipment to support multiple wireless network operators on the same platform basically. Now that way, an enterprise or a venue, for example, is not obliged to install multiple separate networks to support users such as their workforce or customers and so forth from multiple different operators. And so, here in the US that usually means being able to support the big three mobile operators such as Verizon and T-Mobile, as well as AT&T, but it can also entail supporting MVNOs or perhaps DISH network and so forth. So the idea is that you’re going to have the ability to support multiple network operators without having to go through the complexity of supporting multiple separate networks.

Now Cummins Inc., which came to my attention for the first time because of this announcement, is the industry that selected Verizon, I should say, for this. And so as a result, Verizon is the technical lead and anchor tenant for a combo network that will be developed in its Jamestown engine plant located in Lakewood, New York. So the engine plant and these I think are important stats, has 1 million square feet of industrial space and 1 million square feet of outdoor space and it has 1,500 employees producing approximately 500 heavy duty truck engines each day. So basically, they make truck engines. And so, I find that pretty intriguing and this, as a result, qualifies and certainly as a massive scale industrial site that is a strong candidate naturally for a neutral host site implementation. Now, I think, there are some key aspects here to keep in mind. That is, the network runs across Verizon’s C-band and millimeter wave spectrum, and it can also support 3.5 gigahertz CBRS connections as well.

Now, one of the major business challenges that Cummins was facing was that the company did not have a system that enabled all of its employees to get to the same level of signal across all the different carriers that can be supported there at its location. And, as we know, employees need to make emergency calls sometimes inside or outside the facility. And that call, well, needs to be received, it needs to be put through. And so, fundamentally, neutral hosting addresses this critical need. Now, I see that neutral host, excuse me, the neutral host model picking up momentum. And why is that? Well, quite simply, the competition is heating up. It’s intense. We’re seeing players like Federated Wireless, Dense Air, Celona, Kajeet, InfiniG, Druid Software and Halo Networks. And out of that mix, I think, we’re going to see some breakout in terms of the competition.

Now, as we already talked about, we already had the opportunity to listen to Celona at the recent Mobility Tech Field Day XI event. And from those conversations, I see that the Celona approach when it comes to neutral host solutions can pretty much provide that competitive advantage over, say, a distributed antenna system implementation, which is where I think this is going to be a real difference maker. And, again, a little foreground, distributed antenna systems are what have been used to try to really enable the communications inside facilities or across industrial sites and so forth, however, as we’ve seen it could be complex and costly. And so I think Celona’s solution is a good example of how these costs can be halved or potentially halved as well as quite simply providing visibility into the network as well. But the distributed antenna system implementations, that really wasn’t part of the package as well as quite simply going back to that age-old problem of how do we eliminate complexity in no 5G networks?

Now, what also is important is that the Verizon business move is following on T-Mobile, which has already tossed its hat into the neutral host arena. And so, for example, here, Celona has been officially certified for the 4G-based neutral host system that is within T-Mobile’s Bring Your Own Coverage 2.0 program or BYOC 2.0. And I think it’s a great program. What it does is that the certification of Celona’s neutral host technology can ensure service integrity for T-Mobile subscribers, but also include support for voice and data services, emergency 911 calling, and other important subscriber services with full regulatory compliance. So this is really bringing it together. And so, with that in mind, Tom, what do you think about other operators shining to rise and being a neutral host? And also now, how do you see the neutral host model evolving over the second half of ’24?

Tom Hollingsworth: Well, I think it’s important for people to understand that for a long time, the value that people were trying to sell you was in their network, right?

Ron Westfall: Yes.

Tom Hollingsworth: Think of all the Verizon commercials that you’ve heard, the AT&T commercials that you’ve heard, the T-Mobile commercials that you’ve heard, our network is the best. But eventually you’re going to run out of everything. You’re going to run out of spectrum. You’re going to run out of space to put up towers. And then, you’ve got a real problem because now you’re trying to sell them on a network that can’t really expand. And that’s where this neutral host model comes in. I love the fact that you kind of compared it to the MVNO craze. Remember when everybody had their own mobile network? I remember it was the Disney phone that everybody was trying to sell. It’s specialized to your kid, but it was a mobile phone that could receive calls and things like that. It ran on Verizon and most people didn’t know and didn’t care as long as it worked.

Well, in today’s market, somewhat, 10, 12, 15 years later, what we’re selling is the software stack. We’re selling the orchestration layer on top of all of those networks. Verizon wants to be a utility player because when’s the last time you went into a building and said, “I’m going to go ahead and use this, but I really need to run all new power. I need to own the power infrastructure in here because my power is going to be better than your power.” You never do that. You just assume that the power is good enough to support whatever you’re going to do. That’s what Verizon wants because at that point, people will have to start renting time on their network. And they are attacking the right market here. Like you said, the Cummins plant, if you drive a big truck that’s a diesel engine, you probably have a Cummins engine because they specialize in making those giant diesel engines. They have an enormous warehouse factory floor that is what I consider the epitome of the uncarpeted enterprise, right? It’s smelly, it’s dusty, musty, dirty. You would never go in there with these bright clean APs and try to stick one of them every 10 or 12 feet.

You need something that works across the whole board so that your users can use their cellphone kind of like in a DAS infrastructure that you might see in like a hospital or a stadium. But more importantly, the IoT devices that are going on the floor, the tablets that people are using to check in work, the communications infrastructure that they’re using to be able to report line problems and things like that. Even for some of those older machines that haven’t technically been connected to the grid yet, there are solutions that will allow them to do that, but they’re going to basically work like access points. We’re going to plug the machine in through whatever communication method it needs, and we’re going to connect to the network using CBRS or private 5G technology of some kind. Verizon really needs to get people to start buying into this because rather than going into partnership with other companies like Celona, like you mentioned, they are basically saying, “Well, we’re going to be the neutral, neutral third party. We’ll work with anybody as long as it’s not AT&T or T-Mobile, but you’re going to basically pay to be a part of us.”

And I don’t know if that is going to play out the way that they want because the problem is they’ve spent all of this money investing in this infrastructure, they’ve got to recoup some of those costs because they can’t keep raising prices on their subscribers because we’ve essentially hit kind of this cost-cutting parody with subscriber numbers. People will jump to another subscriber to save five bucks a month, so you can’t really tweak the prices too much because people are already squeaking. So you’ve got to expand into the enterprise because those people, it takes a lot to make them squeak as long as they’re getting good connectivity. So, I’ll be curious to see how this experiment plays out with them.

Ron Westfall: Yeah, no, those are excellent points, Tom. And I think, yeah, there was a sentiment certainly at Mobility Tech Field Day that Verizon is going it alone in terms of how it’s implementing the neutral host model. Yes, they’re using Ericsson equipment. But, again, they’re the ones who are basically in charge of how it’s being built out and supported. Now, with AT&T and T-Mobile, there is a contrast here. They are willing to work with third parties to enable the model, Celona certainly coming to mind. But also, I think, it’s good for the competition out there. That is, let’s see, which model actually brings on more basically investment support. And that’s going to be certainly a bottom line here. And that is with the T-Mobile and AT&T approach, we see the enterprise themselves basically funding the neutral host model. And this is something that is to their benefit as well. That is, this is something that can really be, I think that was a good point, the equivalent to having water, to having power.

These are things that you just automatically expect any industrial site to have or let alone other places like venues and so forth. And so, this is basically making connectivity all the more integral to everyday living that this is a society-wide expectation. And I think this is going to help fuel the overall neutral host model, but also I think it is good to see that there are different approaches here and that I think will help the overall competition. So with that in mind, now let’s turn to things that have also been going on over the last week. And that, I think, also can entail taking a look at Dell Tech World 2024. And so, that was definitely a show that focused on AI and that is certainly, I think, a tribute to Dell’s portfolio that’s able to address AI throughout so many of the parts of the network as well as use cases and so forth. And this is something that, I think, we’ll see more of. I think, with HPE Discover, AI is going to be a major thing.

So why I’m invoking that is that there was also an announcement that pertained specifically to telcos and 5Gs, and that is a partnership with Ericsson that is really focused on pushing cloud transformations forward. And this is going back to the theme of how do we make the journey more simple? How can we eliminate the complexity that’s already out there because of things like DAS and legacy implementations and so forth. And as Celona pointed out, LTE to 5G transitions and so forth. Well, to make this happen, the duo is commercially debuting Ericsson cloud-ran software on Dell PowerEd service that are underpinned by continuous testing and life cycle management plus joint services that offer telcos integrated network infrastructure support. And what I think is important here is that we’re going to see more of that, that we know that the telcos across the board have been dialing back CapEx that they’ve been rationalizing workforce numbers and so forth. And so, that is going to, I think, put more emphasis on the suppliers, the supply chain, the value chain to come up with solutions that are quite simply pre-integrated and come with a healthy dose of support.

Now, this has always been in play, but I think it’s just going to be more accident now, all the more important. And I think also what’s important is that both companies are looking to unstuck, really, the telco transformation journeys out there. 5G debuted five years ago and there was a lot of hype and this is not unique to 5G. The hype’s died down, but now we’re trying to figure out how can the telcos really make 5G sizzle? That is, how can it be more effective at monetizing a new service or quite simply enabling exciting new applications that, well, consumers, but certainly businesses will want to pay for. And they invoked, I think, an interesting study from Ameritalk that indicates that a whopping 96% of telcos or communication service providers have indicated that their network transformation journeys are lagging due to factors such as time and budget constraints alongside reliability and security issues. Now, the time and budget constraints aren’t unique, but I think they’re more acute now. We’ve all been hearing about skill shortages. But also, it’s wondering about the reliability and security issues. And that, I think, will play to the strains of partners like Dell and Ericsson.

They certainly have deep expertise in this area. They certainly have vast service resources. And this is something that, I think, is going to become more into play as the telcos quite simply try to figure out how to make their telco cloud transformation journeys all the more successful. Now, what this is also bringing is that they’re cultivating customized cloud network transformation journeys and really providing guidance on network structures and operational frameworks that the telcos can use to quite simply minimize risk across, well, increasingly open and heterogeneous vendor environments. And Ericsson’s cloud RAN software will now be launched on the Dell PowerEdge service. And that is going to, again, also help not only the deployments but also minimize day two operations, which I don’t think get enough attention. And that includes the upgrades, the updates, and also providing integration testing and life cycle management. So, all of these things have to really come together. And if it’s in a package from two trusted providers, I think, that will prove more attractive. And so, it was no coincidence that AT&T was present at Dell Tech world as well as at Ericsson’s 5G factory tour event that also overlapped.

So this is something that I think is how this is all coming together. We have a major operator like AT&T basically working with Dell and Ericsson to really modernize their network, to really enable things like an open RAN implementation according to their view of what open RAN is. But I think it’s also showing that it’s adding momentum, really, to the Dell and Ericsson partnership that’s already been in place. They’re already announced last year the combination of using Dell PowerEdge servers with the Ericsson cloud RAN capabilities. But also, I think, it’s going to make a difference in terms of bringing that choice and flexibility that CSPs prioritize when it comes to certainly their overall cloud transformation, but also their cloud RAN implementation specifically and stay tuned. Both Dell and Ericsson I think are to be very capable at enabling these multivendor implementations because as we know, the operators just make a great deal of priority on that. And so with that, Tom, what do you think about the latest update to the Dell-Ericsson partnership and what quite simply the implications for the 5G ecosystem?

Tom Hollingsworth: The trough of disillusionment, if you want to call it that, is basically filled with technical debt. And that’s one of the problems that a lot of people don’t really understand when they start this cloud journey. The easy things to convert to cloud native infrastructure have already been done. Unless you work in a super highly regulated industry, it’s those hard problems. If you don’t believe me, look at how many workloads still are required to run on AS400s or Z series mainframes. Those things never even made the transition to on-prem client server architecture, let alone making the transition all the way into the cloud. You’ve got to analyze how that’s going to operate. And that’s just what you and I would consider from an IT perspective, technical debt, this is a whole other realm. A lot of the stuff that lives in those base stations and out at the edge is this weird custom kind of proprietary setup. It does not translate well.

So what you really need to do is you need to kind of, well, rip and replace But you need a solution that’s going to work well together because a lot of the reason why that technical debt exists at the edge is because they were cobbling those solutions together. It kind of make them work and that is not supportable. So like you said, let’s say we go out and we buy a Dell PowerEdge, we run our Ericsson RAN solution on top of it and one of the servers goes down. Well, nobody has to go out there now with a soldering iron and a electrical schematic and some chewing gum and MacGyver the thing back together, they could just order parts from Dell. And that’s one of the reasons why Dell is still such a valuable commodity. And we mentioned that this week on the Gestalt IT Rundown, people want Dell’s support infrastructure, they want that parts availability. They don’t want to have to go see if they have to order a part off of eBay or, heaven forbid, go find a RadioShack that’s still in business to get something to put this thing back together. They want advanced replacement on it. And that calms the minds of the stakeholders who are willing to make these investments.

If it comes down to a choice between building the best platform possible, but there’s no way that the person who built it can ever leave or retire because he’s the only one who knows how to work on it. Or ordering a Dell solution that has the backing of Dell and Ericsson and I’m going to put it out there and deploy it and it gives me a little bit more flexibility. If it costs a little more, I don’t care because I want the ability to fix it when it goes wrong. And that’s going to help these 5G deployments kind of leapfrog in coverage because now that we’re able to have known good hardware that we can put in the base stations that allow us to expand operational services out there, it’s going to make everyone’s life so much easier.

And I think that Dell finally understands that because the transition to 5G, honestly, is about coming into commodity hardware. It’s about creating operational synergy with the things that are going on and making sure that people understand that this is not just some kind of house of cards that we’ve built over the years and don’t touch anything because if you do, it’ll break. Dell has a real valuable opportunity here to uplift a lot of server sales in these areas where people are ready to make that move because their stakeholders are pushing them into 5G and they’re not liking the pace that it’s taking so far.

Ron Westfall: No excellent points, Tom. And I think it triggers two additional factors here. I guess you can call them Megatrends. And so, in the background, why Dell services? And I think we touched on it’s because AI is now introducing this new competitive dynamic. Now it could mostly be good news for telecos but it not necessarily be. Now we see, to your point about going to the cloud, the low-hanging fruit has already been implemented, but the rest is more challenging. And I think we’re seeing the same kind of thing with AI. Some of the more easier implementations have been put in place now that is using GenAI to help customer support to help with understanding bills more effectively. But I think it’s going to grow. I think, it’s going to have impact where the operators can enlist AI or specifically GenAI to help with coding efficiency as well as helping field tech, which is basically an iteration of what’s already going on with customer support. So, there you go. Dell support can play a major role in also helping telecos figure out what to do with AI.

The other thing is, I think, it was smart of Ericsson to build its 5G Smart Factory now here in Texas, USA. I think that was a factor in why AT&T decided to go with Ericsson for its version of an open RAN implementation so forth. But it’s not just that, I think it’s just overall. I think we know there are geopolitical factors out there that are driving more of the decision-making and how can we secure supply chains, how can we minimize disruption and so forth. And this partnership I think is a good example at least when it comes to working with AT&T. And so, keeping with the theme of 5G ecosystem adjustments, I think, we touched on two major ones. Now, let’s look at going back to cloud initiatives and more specifically hybrid cloud.

Now we’ve seen that Red Hat has been focusing on using open source principles. I think people automatically think open source and Red Hat in the same sentence. But I think it’s also important to look at how they’re focusing this on the telecos specifically. And once again, what is kind of their lead marketing mantra? Reducing complexity. So this has been a constant theme in everything we touched on in our conversation here. And it’s open source that, really, I believe is underpinning Red Hat’s pre-integrated platform approach that includes, again, a blending and orchestrating 5G automation, hybrid cloud AI and edge computing capabilities. And how are they doing that specifically? Well, they’re offering what could be characterized as the unified cloud native application platform that really is looking to span the telecos’ entire network from the core to the edge, outer edge.

And to that end, Red Hat has integrated, again, the Ericsson Cloud RAN with its OpenShift technology for more flexibility and how an operator can implement a hybrid cloud approach and also how they can select, for example, multiple cloud partners. Also, this is following on the fact that Red Hat announced a partnership to deliver Nokia’s core network applications together with, again, Red Hat’s cloud infrastructure platform. Now, are there practical outcomes coming from this? Because, again, 5G still has a hangover from the hype cycle. What is different now? What is new? Well, I think, when it comes to what is different, we have to look at customers and I think Red Hat has an interesting one in Perfectum. And you might ask, who’s Perfectum? Well, that’s an Uzbekistan operator. So, yay, we got to get honorable mention from Uzbekistan and the 5g factor.

And what I think is important there is pairing the open source platform agility in that network with Nokia’s core network applications. And, again, it’s to enable that flexibility. But it’s not just that network. I’m seeing Red Hat offering a growing number of new pre-integrated and validated cloud native network functions or CNFs that, again, focus on 5G core and other business-related applications. And so, what is this doing for teleco customers that is, I guess you could say beneficial? Well, I think it’s a way for a platform approach to ease the path in terms of moving to, again, those more open multi vendor implementation. So we’ve already emphasized that and this is reinforcing it. What is Red Hat doing? Also, I think, it’s going to help with, again, gaining that more consistent operational experience across the entire network. And that’s helping to drive revenue streams that are more diversified and hopefully ultimately more profitable.

And also, again, deliver a better customer experience for all the customers, both on the consumer side and on the business side. But in addition to Perfectum, Red Hat certainly has other telco customers that it’s been working with, and that includes Japan’s KDDi, Telenor and Turkcell come to mind. And basically, it’s the same theme here. They’re using Red Hat to enable cloud-native application development, but also being able to better administer and handle a multivendor environment in the hybrid cloud world. And, well, let’s wait for it. It’s also about our new friend AI. And so, what I think is interesting here is that Red Hat is actually working with players like Cisco Intel to also integrate and, again, simplify operationalizing AI within these new validated designs as well as automated platforms for common AI models. Now, where else can we see this AI approach making a difference? Well, it also is going to impact the RAN part of the network, and we can see that with the RAN framework, Red Hat, and again, Nokia are working in a collaboration to provide pre-integrated and tested solutions for their cloud RAN customers.

And so this is, again, giving customers a cloud RAN reference design that supports, again, a choice of general purpose hardware platforms that they could combine through, again, Red Hat OpenShift. And to basically put a exit on it. Red Hat’s also working with Mavenir. And the reason why I’m bringing that up is because they’re actually advancing the commercial phase of an open RAN network deployment in the Vodafone idea network. And so, what I think we’re seeing is the mainstreaming of open-source, Cloud-native AI-infused capabilities becoming well more widely adopted. And as such, I don’t know, is this something that is going to inject more cheer into the telco community? Is this going to move the needle for the delivery of more competitive 5G services? And Tom, so what’s your take on the Red Hat telco proposition and the telco prospects and working with Red Hat?

Tom Hollingsworth: Well, like we mentioned in the previous story, you want reliable rock-solid hardware that doesn’t create technical debt. And I can buy the biggest baddest server out there and if it’s still running VMS, it doesn’t matter because … Does anybody even write for that anymore? It’s like walking into a programming class in college and asking people who knows Fortran. They’re probably going to look at you like you’re crazy. The reason why people want cloud has nothing to do with paying Amazon to host your stuff or not wanting to buy hardware. And it has everything to do with creating a less variable operational cycle, whereas something would normally take two to three days to do with cloud principles, it could take one to two days consistently. And that’s really what people are looking for is that repeatability, that predictability, that orchestratability. And that’s why it’s so valuable to get an operating system like Red Hat Enterprise Linux or any of the other flavors, whether it’s OpenShift or what have you, into that system because that provides capabilities that you can build on that people know how to write for.

I mean, just go google any one of the apocryphal stories about how the insurance company is still running on COBOL because nobody knows how to translate all of that stuff into something more modern. The telco space is in danger of doing that. And if they can’t figure out how to make this more modern, make this more operational, they’re going to be stuck in a past where they’re basically having to train people to work on their stuff. And if you don’t know how that’s spelled, it includes four dollar signs because those people cost a crap load of money when they only know how to work on your stuff. And the market for those people is extremely rare, they pretty much can charge whatever they want. Whereas if you move this to something that’s a little bit more operationalized for things like Kubernetes or cloud native principles or anything that’s been built since the ’90s, people can go in and go, “You know what? I know how to work on this,” but so do 55,000 other people. So that makes your resources a little bit more fungible, which reduces the complexity needed to put on the shoulders of any one person.

But also allows you to rotate teams in and out so that your infrastructure doesn’t become effectively kind of snowflaked around one or two people. And I think that Red Hat recognizes this because of all the things that they’ve been doing over the years and they’re trying to kind of break into that market like Dell was. If Dell is the hardware side of it, red hats the software side of it. If you’re going to have to pull this stuff out and replace it anyway, why don’t hire some of those new whiz bang kids coming out of college who understand this Kubernetes thing and we’ll build an OpenShift cluster inside of your edge and you can have them write services that run on top of that. In the meantime, your existing infrastructure people can figure out how to enable all of the other stuff that you’ve been doing for years on top of that infrastructure. And your technical debt problems, they may not go away overnight, but they at least are significantly lessened. And then, where does that go from there? Well, ask AI how to write programs for VAX. And they’re going to go, “I don’t know. I’ve never been trained on that.”

But man, it can spit out code all day long about being able to modernize your infrastructure to run on something that at least understands. And all of the solutions that are going to go out there and scan and provide more operational enhancements and capabilities, they’re going to need some kind of consistent infrastructure. Because to me, it’s like when you go and you need to look up how to replace a part in your car, but the only person who created that video, it was like a car that was three years older than yours and none of the parts match up. So you’re sitting in here scratching your head, you’re like, “Okay, he says to pull this, but that’s not here. So is this the part that I need to pull?” And that’s when you’ve already lost the game because you’re going to break something. Don’t do that with your telco infrastructure. If you’re looking to do this upgrade, don’t give it a little bit of a push, just rip the whole thing and go with a newer solution like the one that Red Hat’s proposing. And I promise you, the pain you’re going to feel now the band-aid getting ripped off is going to feel a whole lot better than it will five years down the road when you own this infrastructure and you can’t do anything about it.

Ron Westfall: Excellent point. I think that does help crystallize why the telcos are looking at cloud increasingly. Again, it’s about the life cycle management aspect here. It’s about avoiding that technical debt. And I think that hasn’t really gotten its due relative to the other considerations that are always important, cost savings, operationalized streamlining and so forth. So I think that’s great. And I think it’s also certainly reinforcing a couple of the other themes that have come out with a lot of these initiatives that is, pre-integration, pre-validation or ongoing validation and so forth. So yes, I think we’re going to see the telecos relying more on their partners, their suppliers to come through with these services and capabilities. And so I think that’s going to be a key differentiator when they’re thinking about, okay, how do I evolve my network? How do I really get to 5G standalone, let alone 5G advance to really energize customer interest in why they should get 5G from them beyond, say, fixed wireless access in terms of new revenue streams. And so with that, I think, yes, we are definitely set for an upcoming 5G Factor covering a lot of these same things, that is the AI dimension. And with that, I’m certainly looking forward to our upcoming tech field days. And, again, thank you Tom for coming on board and talking all things 5G with us today.

Tom Hollingsworth: Well, thank you for having me, Ron. I really appreciate it. And we’ve mentioned a lot of the companies that presented at Mobility Field Day. If you want to check out those videos, make sure you head over to youtube.com/techfieldday. We have a playlist full of all of the great stuff that we’re talking about, whether it’s hardware or software related. You can get caught up pretty quickly and be ready for the next one when it comes up later in the fall.

Ron Westfall: Perfect. In fact, I’ll be putting links into this 5G Factor webcast right up. So there’ll be all kinds of opportunity, I believe, for folks to check it out, not only the Mobility Tech field day, but hey, what else is on the horizon? And with that, thank you again everyone for joining us. Don’t forget to bookmark us in terms of The 5G Factor and keeping us in mind. And with that, have a great 5G and AI day, everyone.

Other Insights from The Futurum Group:

5G Factor: Private 5G Kindling

5G Factor: Key MWC24 Takeaways – The Cloud and Telcos

5G Factor: Making AI Open, Responsible, and Transparent

Author Information

Ron is an experienced, customer-focused research expert and analyst, with over 20 years of experience in the digital and IT transformation markets, working with businesses to drive consistent revenue and sales growth.

He is a recognized authority at tracking the evolution of and identifying the key disruptive trends within the service enablement ecosystem, including a wide range of topics across software and services, infrastructure, 5G communications, Internet of Things (IoT), Artificial Intelligence (AI), analytics, security, cloud computing, revenue management, and regulatory issues.

Prior to his work with The Futurum Group, Ron worked with GlobalData Technology creating syndicated and custom research across a wide variety of technical fields. His work with Current Analysis focused on the broadband and service provider infrastructure markets.

Ron holds a Master of Arts in Public Policy from University of Nevada — Las Vegas and a Bachelor of Arts in political science/government from William and Mary.

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