Accenture exec: ‘Cloud is cool, but without an advanced network, it can’t deliver the value’
Mobile service providers are spending billions of dollars building out nationwide 5G networks and are touting the benefits of the new services in TV and internet ads, but according to Accenture’s Communications & Media Industry Lead for North America Andrew Walker, those service providers are unlikely to see a rate of return when it comes to consumer subscriptions.
“It will be interesting to see whether they can raise prices,” he told RCR Wireless News, adding that they probably won’t be able to. “There’s no incremental revenue that they’re getting that they weren’t getting from 4G. It seems like a colossal waste of shareholder value.”
So, where is 5G going? Where is the value for telcos? For Accenture, the answer is cloud computing.
“We see 5G becoming the edge to enable cloud computing,” stated Walker. “There is a lot of focus around 5G as a transformative technology for businesses. Think about the image of dystopian movies like The Terminator, where the machines are making machines. 5G and the use cases we’re seeing right now [are about]how to make IoT work and achieve giant steps in thinks like productivity and worker safety.”
“If you have wicked fast speeds, now you’re able to do all of those analytics and super-fast computing in real time without having to plug in cables,” he continued.
The potential snag for operators is that cloud industry giants like Amazon, Google and Microsoft are emerging as huge competitors in this space.
“If you look at their capex spend and the undersea cables they’ve laid over the past few years,” began Walker, “essentially what they’ve built is a giant telecommunications network with processing and crazy speed ’round the globe.”
Naturally, this can be viewed as a major threat to telcos. But, that’s not the whole story.
According to Walker, what these tech giants are building — corporate date centers being transformed by the cloud — are “nice” and “neat,” but that without that last-mile connection being delivered by the telco— without fast connectivity speeds being delivered to the company, its employees and its machines—these cloud services “don’t deliver the value.”
“The telcos can deliver the edge cases and the connectivity and the speeds that make cloud far more impactful to businesses,” finished Walker.
A recent example is the July announcement that Accenture is working with AT&T to outfit Phillips 66, a 2,000-acre refinery in Belle Chasse, Louisiana, with a private cellular network solution that will lay the foundation for potential future 5G use cases.
Walker provider further insight into the project: “We are working with AT&T to kind of overlay the network across the entire space and then start to look out how people are doing their jobs and how machines are interrelating. And all of this goes back to the cloud to look at safety, throughput, where there are leaks and spills. Now all of the sensors on the machines can immediately report back to whatever cloud provider they’re using and run all of the analytics.”
“Cloud is really cool,” he added, “but without the advanced network across these 2,000 acres, it doesn’t help the company a lot.”