February 9th 2018.
The Mobile World Congress in Barcelona is just around the corner and tech. suppliers are briefing the analyst community on what to expect. Given the importance of connectivity, be it in a mobile device or a simple sensor, this year’s event could be the year when many emerging and maturing technologies finally hit a point where they have satisfied the sceptics. The technology list is long and included #IoT (The Internet of Things), #5G, #AI (Artifical Intelligence), NB-IoT, Lora and Sigfox, and Machine Learning. Carriers will be looking for new business models as they plan and strategize what new data services they can create and deliver to tech. buyers. Of course any time the carriers make a move, they are matched by the OTT (Over The Top) and IT vendors – all jockeying for the mind share and wallet of the buyer.
I will be at MWC covering the event looking at what disruption and trends I will see that are emerging from the abundance of data being generated by connected devices. My coverage began earlier this week with an analysis of a Huawei pre-briefing in London. Please take a moment to see what one of the most influential tech. suppliers is announcing at MWC.
Huawei’s executive director of the board, and president of the carrier business group, Ryan Dings kicked off the session with forecasts that by 2025 there would be 40 billon devices ‘sensing the physical world’, 100 billion connections with ‘data going online to power machine intelligence’, and180 billion terra bytes of data resulting in ‘big data and AI powering applications’. He also stressed, like many in the industry today, of the importance of using #AI, and in Huawei’s case, this means AI in the cloud, in the pipe (with intent-driven networks), and AI chips, AI voice assistants devices. All of this will be driven on one physical network (5G) giving rise to new carrier opportunities with business models based off IoT and business services off video. Finally, Huawei is not slowing down its R&D spending as it continues to invest between $10 Billion - $20 Billion over the next 5 years (Note: in 2017, they invested $12 Billion).
At the pre-briefing, one of the highlights for MWX will be Atlas. Huawei executives shared generic details about its AI platform designed to manage and orchestrate AI functions from the edge of the network to the core. Atlas is described as a heterogeneous computing solution managing CPU, GPI and FPGA chipsets with the single click. However, in our opinion, we should view Atlas as very strategic to the success of 5G management. Atlas should give carriers the ability to create 5G management services using a framework built on three tenets – Intelligence, Synergy and Ultra Broadband.
Huawei has also invested a lot in Narrow Band IoT, or NB-IoT, and they believe that the industry is near a market inflection point. They estimate that in 2018 there will be 100 networks running NB-IoT , up from 39 in 2017, 1.2 million sites up from 500,000 in 2017, and 150 million connections up from 10 million in 2017. All of these statistics are good news for telco carriers who see this broadening infrastructure support IOT. Overall IoT growth rates translate to revenue for telco carriers and Huawei forecasted that in 2018 the revenue will be $8 Billion, rising to $38 Billion in 2020, and hitting $400 Billion in 2025. The important metric for everyone is that IoT as a percent of total revenues will finally break 1% in 2019.
This is significant as it represents the knee in the revenue curve rising to 2% in 2020 and shooting up to 20% in 2025. Carriers are now seeing IoT beyond a connectivity sensor, but rather an enabler of business life cycle solutions services.
Finally, Huawei promoted its ‘3T+1M’ IoT security framework. The 3T represents 3 technologies – Defense @ The Device, Assurance @ The Pipe, and Analysis @ The Cloud. We assume that the ‘3T+1M’ will wrap itself into the OceanConnect cloud IoT Platform as part of the overall ‘Cloud plus AI’ go to market strategy.
In our opinion, it is clear that Huawei is working hard at creating, enabling and sustaining the carrier eco-system to take full advantage of the next connected world. This environment will be running off a 5G network, bring data via IoT and video, serviced at the edge of the network or in the cloud, and driving analytics and machine learning in a full vertical stack. We would like to see the broader strategic picture whereby Huawei’s carrier group integrated its capabilities with its core enterprise network and data center group and its consumer/mobile group. This vision would differentiate Huawei from most of the ICT tech. suppliers, while not under playing how challenging it would be.