Project managers, technologists, entrepreneurs. SMEs who have mastered the key technologies and services could be the real winners when it comes to taking 5G to market. SMEs are expected to enable some of the new business models emerging from the inevitable disruption not only in the telecommunications ecosystem but also in the vertical sectors making use of 5G including automotive, manufacturing, health, energy, and others.
The imminent arrival of 5G will bring disruption in business models for incumbent operators and verticals alike. While opportunities will surely arise for large, well-positioned market participants, the real winners may well be those SMEs who have mastered the key technologies and services enabling the new business models emerging from the inevitable disruption not only in the telecommunications ecosystem but also in the vertical sectors making use of 5G including automotive, manufacturing, health, energy, and others.
Whenever disruption has upended a market, incumbent players have often been caught without access to the key capabilities needed to play a role in the aftermath. This is where SMEs have an advantage – traditionally agile, close to the leading edge of technological innovation, without legacy baggage to slow them down. SMEs with expertise in Network Function Virtualization and service orchestration will become key partners to their larger counterparts in the drive toward full Network Slicing, a foundational capability in the new business models. SMEs pioneering vehicular connectivity and secure mobile data transfer will benefit from the emergence of new forms of monetisation ranging from media streaming to usage-based mobile commerce. 5G will open up technology gaps that the SMEs can rush in to fill. SMEs are leaders in technologies needed to solve the spectrum allocation problem (e.g. beamforming) for mobile business models; technologies for supporting new services in areas like stadia (edge computing, small cells); new forms of data mining and analytics to support usage-based business models (e.g. machine learning, Big Data). SMEs well introduced in vertical sectors may also find new opportunities for offering new services to their customers via 5G. This workshop will explore the new playing field that is emerging with the advent of 5G, and the opportunities for SMEs to be at the leading edge.
To explore these opportunities, Global5G.org (www.global5G.org) co-hosted a workshop at EuCNC 2019 in Valencia on Emerging 5G Business Models: Opportunities for SMEs and large companies-lesson from 5G PPP (https://www.global5g.org/news/report-eucnc-2019-business-models-workshop) with NetWorld2020 SME Working Group (https://www.networld2020.eu/sme-support/) and To-Euro 5G (www.5g-ppp.eu).
The workshop brought together nine projects from 5G PPP phases 2 and 3 along with their European SME partners and other small business that can benefit from 5G market opportunities. The workshop zoomed in on what kind of business models really were poised to emerge from the inevitable disruption of 5G, and what opportunities this disruption was really bringing for SMEs.
As a featured workshop by the 5G PPP during EuCNC (https://www.eucnc.eu/workshops/workshop-5/), it gathered a full room of participants, coming from enterprises large and small, public and private, including EC representatives. Co-Chair Nicola Ciulli highlighted the complex environment faced by SMEs, giving the participants much to keep in mind as they listened to the presentations.
Darko Ratkaj from the European Broadcasting Union (EBU, https://www.ebu.ch/home) expects enormous disruption in the services of broadcasting coming from the advent of digital broadband, which is destined to reach higher levels with the coming deployment of 5G . But even more to the point of the workshop, he explained at length the role that SMEs will be able to play in this disruptive environment (https://tech.ebu.ch/groups/5gdeployments; https://tech.ebu.ch/groups/5gcp; https://www.ebu.ch/legal-policy/5G). Broadcasting is first of all a creative activity; secondly, it is invariably a local activity, reflecting local culture and mores. As such, it needs local, creative talent, which is difficult to nurture, and difficult to replace. SMEs are the ideal entities to provide this creative talent in their local environments.
Perspectives on the intriguing concept of Open Source Software Networks and 5G came from Josep Martrat of Atos. The open source business model has made huge advances in software, and it is not unreasonable to be curious about its possible relationship to 5G technologies. Josep coordinates the 5G PPP 5Gtango project (https://www.5gtango.eu/), where much open source development is being used and consolidated. Since the well-known “some additional development needed” maxim of open source is operative here, there are opportunities for third-party, specialised SME actors to play key roles in the introduction of open source into the 5G mainstream.
A key feature of the workshop was a series of Lightning Talks from SMEs looking at what innovations they are planning to take to market.
The workshop participants queried the maturity of 5G today, both in terms of technology and business model development. For example, technologies like WiFi still retain a high level of “stickiness”, and are themselves evolving at the same time as mobile generations, thus retaining also a strong value proposition.
Caution is key but so is courage. Some parts of the 5G community are pushing the classic “hype cycle”, which mismatches marketing messages with deployment realities, thus creating undue expectations that are inevitably but unfairly dashed. We must recognise that current research and innovation will not have a return on investment that is coincident with the peak of the hype cycle (where we are now), but rather within some years. 5G today is a bit like a Swiss army knife – designed to do many things, but too many forget that it is only a tool to enable real applications. However, the newly launched ICT-19 projects may well have an opportunity to exploit this Swiss army knife in real, realised applications. All agreed that when 5G arrives in full, it will also bring in new value chains and players, which will surely impact current SMEs one way or another – for better and for worse.
What should SMEs do in the meantime? Should they just wait for 5G to eventually arrive in full deployment at some unspecified time? The unanimous response of SMEs and others in the group was a decisive No. On the contrary, it is the other way around, they observed: SMEs can and should exploit their expertise and capacity for innovation to work with the state of the market as it stands now. They will be the generators of new business models capable of exploiting the advantages of 5G when it has fully matured. The future won’t create them – rather, they will create the future.
The workshop was organised by Jacques Magen, Interinnov and chair of the SME WG, and Stephanie Parker, Trust-IT and Coordinator of Global5G.org. It was co-chaired by John Favaro of Trust-IT, who is the Deputy Director of Global5G.org, and Nicola Ciulli, Head of R&D at Nextworks, a leading SME in 5G technologies and Co-Chair of the SME WG. The workshop was also organised in the context of the European Commission’s Common Dissemination Booster with project group 5G-TRANSFORMER and 5G-CORAL.