Co-author: Deepak Chahar
With every progression in communication technology, businesses have seen a disruption in new markets, new players, and processes. Innovative minds that develop transformative technologies via partnering, collaboration, acquisition, or completely transforming their existing strategy are the leaders of this disruption.
In the present scenario, the world is embracing “digital networks” as connectivity is undergoing evolutionary change with 5G networks. 5G is estimated to be one such transformative technology that is disrupting the industry at many levels, with its new business models, immersive interactive experiences, and new markets to capitalize on.
All the key players of the 5G technology ecosystem from “Silicon to Systems” are innovating and evolving their landscape to meet the 5G requirements. Let us look at the transformation of these key players— silicon, OEMs, hyperscalers, telcos, and over-the-top (OTT) providers of the 5G technology ecosystem.
Transforming Landscape of “5G Technology Ecosystem”
Silicon’s Quick Flip
Silicon players are evolving their strategy to improve the performance and decrease the energy footprint of 5G networks while accelerating the compute and connectivity with custom solutions for next-gen products and applications for OEMs, hyperscalers, telcos, and OTT providers. To meet these demands, silicon vendors are driving mergers and acquisitions and entering a new market of merchant silicon:
- Merger and Acquisitions- Silicon players are increasing their footprint in telecom, edge, industrial, and networking via partnerships and acquisitions. AMD’s acquisition of Xilinx, Nvidia and ARM, Marvell, and Inphi, ST Microelectronics, and French Fabless are some examples in this space to compliment 5G capabilities.
- Movement toward a Merchant Silicon Market- To drive more network agility and programmability which opens the gate for disaggregation and, in turn, the development of Whitebox solutions for telcos, silicon players are moving toward the development of merchant silicon. Example- Cisco embraced the disaggregation of the data center network and are trying to establish their footprint in the merchant silicon market.
OEMs Embracing Change– Open and Disaggregated Architecture
Telcos are moving toward an innovative software-defined network with flexibility, intelligence, and scalability to deliver applications faster, better, and in a cost-efficient way. As 80% of the telco’s network is software today, OEMs are transforming the way they design, deploy, manage, and sell the products and services. To further support 5G networks, the handsets and AR/ VR devices market is also booming at a rapid scale.
- New Entrants - Traditional networks of telcos were dominated by the big three players which included Ericsson, Nokia, and Huawei. However, with telcos moving toward the cloud-native network, new entrants like Parallel Wireless, Mavenir, Altiostar, Radisys, and many others have emerged to offer differentiated services around open networks. Geopolitical pressures will change the vendor landscape, which indicates more network swap opportunities, thus opening the gate for new entrants.
- Revolutionizing the Handsets- For 5G capabilities, smartphone OEMs need to accelerate system-level integration and time to market for new devices while addressing all aspects of end-to-end performance to remain competitive and relevant in this fast-moving ecosystem.
Hyperscalers Innovating the Edge Zone
With the provision of the multi-cloud ecosystem with end-to-end orchestration and seamless life-cycle services, cloud hyperscalers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform are leading the new value creation in 5G edge, by integrating their platform and applications in the telco's environment to deliver innovative solutions to the customers.
- Coopetition with telcos- With several strategic partnerships announced between Tier-1 telcos and hyperscalers, the latter are delivering tools and cloud platforms with agility and a software-driven approach and telcos are complementing with their network, and connectivity experience to deliver an end-to-end edge computing experience to end customers. Azure’s partnership with AT&T and AWS’ partnership with Verizon are some of the recent examples.
- Investment in key players- Through M&As and partnerships, players like AWS and Microsoft are acquiring capabilities to develop telco-specific software workloads and application to tap deep into the business. With the acquisition of Metaswitch and affirmed networks, Microsoft has extended its cloud expertise to the telecom domain.
Telcos are Stepping out of the Box
As the networks are transforming, telcos are no more a mere connectivity service provider in the 5G space. They are trying to deliver applications through agile and programmable open networks. The strategy to achieve this is either by investing in the in-house development of 5G products or building partnerships through the digital marketplace.
- 5G Product development– Instead of buying equipment from traditional OEMs, telcos are planning to develop customized products through their R&D centers or taking the help of partners that can support the adoption of transformative technology. Some of the examples in this space are Rakuten, Airtel, Jio, and AT&T. Rakuten recently announced to develop 5G Radio Units (RU) along with NEC.
- Digital Marketplace– To maximize opportunities for co-creation and value generation, the telcos’ plan to develop a digital marketplace, as digital marketplaces allow them to collaborate with partners to seamlessly launch innovative market offerings for their enterprise customers.
OTT Setting for Explosive Growth
One of the benefits of 5G is that it is enabling ‘anything-anytime-anywhere’, and through faster connectivity, aims to enhance the viewing experience and accessibility to content for the customers. AR/VR, video, gaming, and music, all will see fundamental changes as 5G networks bring the target customer and content closer to each other. With AR/VR, new use cases will emerge such as holographic (which means fans and their idols coming closer with live stadium experience), haptic suits (which means a new sensory dimension to the media industry), and advanced interactive entertainment. To reap the complete benefits of 5G networks, OTTs are investing in telcos and telcos are also acquiring OTT providers.
- Investing in Telcos– OTT giants, Google and Facebook are investing in Reliance Jio platforms. Facebook plans to bring all small retailers closer to the end customer through WhatsApp, while Google with AI plans to support Jio in making a Digital India which will provide millions of users to become owners of smartphones.
- Acquisition by Telcos– Partnering or acquisition of OTT players by telcos is seen as a potential gold mine of primary additions to their subscriber base. Some of the examples are T-Mobile’s acquisition of Layer3 TV, now rebranded T-Vision. AT&T acquired Time Warner and also App Nexus as an advertising platform, to increase its footprint in the media industry.
Leverage HCL’s “Silicon to Systems Ecosystem Experience” for Breakthrough 5G Innovation
We have seen above, how each of the key 5G ecosystem players– silicon, OEMs, hyperscalers, telcos, and OTT have transformed dramatically. However, the requirements of 5G technologies are diverse, and no matter how much a player transforms itself, it is very challenging for one player to cover all the 5G requirements. A collaboration of “Silicon to Systems” will be critical to the future of 5G where each player needs to leverage its respective strengths across infrastructure, products, operations, applications, to create economic profits. All the players of the 5G technology ecosystem like silicon, OEMs, hyperscalers, telcos, and OTT platform providers need to augment and help each other to drive an ecosystem strategy to establish tangible benefits for the society through this digital transformation of networks.
While it is difficult to envisage one company becoming the leader in the 5G space, system integrators like HCL can play a key role in accelerating the overall 5G journey. HCL cultivates a unique and innovative 5G ecosystem– comprising leading silicon players, OEM players, telcos, OTT providers, Google Cloud, Microsoft, AWS partnerships, and 5G labs along with differentiated IPs. We provide a “one-stop 5G platform” to create a runway to experiment, innovate quicker, and take a fast-paced approach to develop a successful 5G ecosystem. Leverage our “Silicon to Systems” experience for breakthrough innovation in the 5G space.