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Forbes Column
March 30, 2020 Most of the initial attention given to 5G and the deployment of the first 5G networks has focused on the new radio technologies that it uses, notably millimeter wave and what’s collectively referred to as sub-6. These new sets of frequencies, along with the 5G NR (New Radio) protocol standard are what’s allowing the latest batch of 5G modem-equipped devices to connect to these new networks. However, there’s a lot more going on behind the scenes with 5G, because an equally critical, but much less understood, part of the story has to do with the infrastructure that’s powering the network. In fact, arguably, some of the most important aspects and widely touted capabilities for 5G—everything from greatly reduced latency and faster download speeds, to advanced applications—are frankly now more dependent on advancements in infrastructure than anything else. The growing interest in infrastructure is also being reflected in business developments around the new wireless network standard. A few weeks back I wrote about some important chip-based announcements focused toward 5G infrastructure (see “Major Chip Vendors Driving Revolutionary Changes In 5G Infrastructure”) and last week Microsoft made a huge splash in the infrastructure market by purchasing Affirmed Networks. For those who may not know, Affirmed is a company that creates tools that enable software-defined networking capabilities, such as network function virtualization (NFV), that are at the heart of what 5G infrastructure demands. What’s fascinating about the purchase is that it places Microsoft into a potentially very important and unique position in the 5G world. In order to understand why, here’s a bit of context. The telecom industry has been moving away from a world of proprietary hardware-based infrastructure towards an open, software-defined networking world for the last several years. Some of this work began well before the launch of 5G, but the transition to the standard is now accelerating that move. As a result, the opportunity for new types of players to come into the network infrastructure market and make a significant difference has grown tremendously. Microsoft clearly saw that opportunity, and by purchasing Affirmed Networks, essentially guaranteed themselves a seat at the table with major telcos and other service providers all over the world. By itself, this makes a great deal of sense. Combine it with Microsoft’s Azure cloud computing business, however, and the deal looks to be even more important. Not only could Microsoft use this connection to have Azure potentially serve as a core platform for 5G infrastructure, it also provides a tighter potential link to bring cloud computing resources running on Azure into closer connection with the network infrastructure. In other words, it could significantly both speed up and ease the process of running cloud-based edge computing applications on 5G networks, an opportunity that many see as tremendously promising. In addition, the move could accelerate the adoption of software-defined networking architectures overall. While Affirmed Networks was certainly a known entity, the confidence that carriers will have in running their future 5G networks on software that comes from Microsoft will be much higher. As a result, potential concerns of making a big bet on a smaller company simply goes away. From a competitive perspective, it remains to be seen how all of this will play out longer term, but there will undoubtedly be some interesting discussions in the near term. Cisco, for its part, has made significant investments in software tools for enabling virtualized networks as well and has begun working with telco vendors around the world on these efforts. In fact, Cisco’s software technologies are helping to power what many believe is the world’s first completely cloud-native virtualized telco network from Rakuten, scheduled to publicly launch in Japan next month. Leveraging large amounts of computing power from commodity Intel-powered whitebox servers and Cisco’s Virtualized Infrastructure Manager software, among other tools, early tests of the new Rakuten network show it offering significantly higher ROI than traditional networks. Regardless of what happens, though, it’s clear that there’s a new level of intensity and focus on the 5G infrastructure market that’s likely to increase over the next few years. As carriers are just starting to talk about moving their early 5G Non-Standalone (NSA) networks—which still use 4G cores—to fully Standalone (SA) 5G networks—which require fully 5G native core networks, the timing for all these moves makes perfect sense. Most importantly of all, faster developments in the infrastructure can help bring the real promise of 5G to life at a quicker pace, and that’s something from which we can all benefit. Disclosure: TECHnalysis Research is a tech industry market research and consulting firm and, like all companies in that field, works with many technology vendors as clients, some of whom may be listed in this article. Here’s a link to the original column: https://www.forbes.com/sites/bobodonnell/2020/03/30/microsoft-purchase-of-affirmed-networks-highlights-5g-focus-shifting-to-infrastructure/ Forbes columnist Bob O'Donnell is the president and chief analyst of TECHnalysis Research, a market research and consulting firm that provides strategic consulting and market research services to the technology industry and professional financial community.
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