Corporations and carriers are getting ready to take the next big leap in mobile connectivity. Expectations are high on 5G to improve business operations and improve lifestyles. With 5G, many are anticipating the performance improvement of existing applications as well as the surge of emerging technologies, such as virtual reality and internet of things (IoT).
Frost and Sullivan estimated that by 2022, Asia-Pacific will have 250 million 5G subscriptions with revenues reaching USD$4.5billion. The 5G mobile connectivity is predicted to be led by China, Japan, and South Korea as they are the forerunners of 5G network deployments.
In this article, we discuss recent 5G developments in the APAC region from a wide range of perspectives. From the 5G testbed in Malaysia’s Langkawi Island to the production disruption of 5G modules due to the coronavirus outbreak, this article will help corporations and technology organizations make better decisions with this information on hand.
The Asia-Pacific (APAC) region is predicted to be the leader in 5G technology adoption, according to research by Global Data. Accounting for 65% of global 5G subscriptions by 2024 with 1.14 billion subscribers, APAC is also predicted to hold the largest share of revenue in 2024 at 44% followed by North America at 32%.
Early launchers of 5G networks, such as China, Japan, South Korea, and Australia, are expected to lead the growth of mobile data traffic in the APAC region through 2024. A rise in consumers’ average monthly data usage from 5GB in 2019 to 11GB in 2024 is also expected in the APAC region. Meanwhile, a mean of 9.98GB of monthly data usage is the predicted global average.
The impact of 5G technology in 2020 was not prominent as suppliers and operators were still in their planning stages. However, 4G technology has shown a sharp increase in its share in the total telecom market in APAC from 6.4% in 2014 to 49% in 2018. By extension, 5G technology is predicted to reach 25-30% of the total telecom market share in APAC by 2024. Moreover, 5G will experience a comparatively higher growth rate as there will be a larger number of use cases, with the invention of internet of things (IoT) and improved mobile broadband services.
Research analyst Ramya Sindhu Jetty from GlobalData predicts that 5G will create demand and opportunities through innovations such as IoT, robotics, and virtual reality with its low latency, high reliability, and greater throughput features. He also predicts that countries with a thriving 4G environment will embrace 5G more readily but the sale of 5G smartphones will grow at a gradual pace. This is because of 5G’s high initial cost and limited network coverage. Despite that, wireless 5G networks will eventually transform not only the consumer market, but also other fields such as manufacturing, automobiles, and IoT. Finally, Jetty believes that network operators such as China Telecom are looking to create a robust environment of 5G, cloud, and artificial intelligence.
With Malaysia’s digital economy growing by 9% annually between 2010 and 2016, the emergence of 5G technology is expected to be a catalyst in the country’s future growth in the digital economy. The Malaysian Institute of Economic Research predicts that the adoption of 5G technology will boost the country’s GDP by MYR12.7 billion between 2021 and 2025.
Along with the announcement of Malaysia’s 5G spectrum band by the Malaysian Communications and Multimedia Commission (MCMC), the regulator also asserts that the implementation of 5G should be inclusive. Besides improving the quality of life of many people, the adoption of 5G technology should encourage business growth and innovation in enterprises of all sizes, be it small companies, large corporations, or the public sector.
MCMC announced that Malaysia will be using 5G spectrum bands of 700MHz, 3.5GHz, 26GHz, and 28GHz. In the second quarter of 2020, the 700MHz band was awarded to Telekom Malaysia Bhd (TM), Celcom Axiata Bhd, Maxis Broadband Sdn Bhd, Digi Telecommunications Sdn Bhd, and Altel Communications Sdn Bhd.
With so much anticipation for the future 5G may bring, TM is leading a collaborative effort to transform Langkawi island into a 5G testbed. A significant amount of resources and innovation will be invested in the island to showcase how 5G can improve digital technologies and big data.
2.1 The nuts and bolts of 5G
The four different 5G spectrums in Malaysia have different features. The 700MHz spectrum can cover a wider area and is ideal for connecting rural areas, and long-range highways while the 3.5GHz spectrum can cater to users in high-density areas. The 26GHz and 28GHz spectrum are millimeter wave (mmWave) bands that can have very high bandwidth but limited coverage and very limited ability to penetrate solid particles – even light rain will interfere with its transference.
It is revealed during a site tour in Langkawi of TM’s preliminary 5G project that the telco is the first to test a standalone 5G network successfully with both 700MHz and 3.5GHz spectrums operating simultaneously. A standalone 700MHz spectrum only 5G network is put to the test just one month earlier and is the first of its kind outside of China. It offered speedier connections with ultra-low latency of 10ms and below as well as the ability to link up millions of IoT devices and all kinds of sensors.
Tengku Muneer Tengku Muzani, TM’s chief strategy officer, also revealed that they will put more focus on the 700MHz spectrum as it will benefit more Malaysians and enable a Digital Malaysia. This is because a single base station of the 700MHz network is, in theory, able to provide coverage to up to 10km. This allows TM to cater to rural areas as well as provide more high-speed access to more users in remote locations.
TM’s head of mobile 5G, Nor Hisham Md. Nordin, revealed that the 700MHz network is seven times faster than what Malaysia’s National Fiberisation and Connectivity Plan (NFCP) aims to provide to the population by 2023. The 700MHz network can provide speeds of more than 200Mbps whereas the NFCP aims to provide an average speed of 30Mbps of broadband connectivity to 98% of the population.
2.2 Why Langkawi Island?
Langkawi Island’s bounded variable environment is said to be ideal for testing and developing new 5G use cases, according to Sharlene Thiagarajah, the helm of TM’s innovation division. The construction and development of the 5G command center (5GCC), application programming interfaces (APIs), and other 5G related projects on the island are performed on an open, sharing model to encourage collaboration. In the coming months, the command center will be open to other service providers and organizations in other Malaysian states.
Eleven 5G use cases are already on its way for release with many others still in its development stages. TM’s research and development portfolio records projects such as smart city, smart tourism, smart agriculture, and other 5G applications. TM’s technical team utilizes the 5GCC to monitor the island’s 5G testbed and its use cases round the clock, according to Azrin Aris, TM One’s head of emerging solutions. My Smart City, a mobile app developed by TM, provides services such as parking and public safety in line with the smart city project. Thiagarajah is confident that innovation is the answer to connecting the many pieces of 5G development and adds that the island 5G project will be the start of a successful attempt at improving the quality of life of many and transform the digital economy.
2.3 Inclusivity and collaboration
The executive vice-president and CEO of TM One, Ahmed Taufek, believes that the reason TM’s 5G efforts and assortment of use cases seen today are realized quickly is because of industry collaboration, particularly partnerships with China’s Huawei as well as home-grown companies. The island’s 5G transformation also provides a hint on future offers TM would like to provide all across Malaysia.
CEO of TM group, Noor Kamarul Annuar Nuruddin, shares that TM has always encouraged sharing of telecommunications infrastructure. A brand new collaboration between TM and Huawei is formed to test interoperability on the 5G network in Langkawi, as an extension to their earlier joint efforts to commercialize 5G telecommunication services. Agreements with other telecommunication companies and service providers to participate in experimentation with network sharing on Langkawi’s 5G network are also announced in January 2020.
The Chinese government’s efforts to curb the COVID-19 spread has caused massive disruption to its manufacturing industry. Production of mobile phone components are pushed back, prompting Omdia, a research company specializing in tech market analysis, to revise its global forecast of 5G smartphone shipment from 250 million to 200 million in 2020.
The 20% reduction likely took into account the interruption in the manufacturing of mobile phone components, from smartphone screens to 5G antenna modules, which would inevitably delay the release of some new phone models to the first quarter of 2021. Strategy Analytics, another research firm, also lowered its 2020 predictions to 199 million phones.
The novel coronavirus disease, COVID-19, was first reported in Wuhan, China in December 2019. Since then, the potentially deadly coronavirus strain has spread to more than 150 countries, infecting more than 4000 people across China in a day at its peak. The number of daily infections in China is reduced to roughly 200 cases a day by the end of the first quarter of 2020 due to China’s aggressive actions in containing the spread.
However, halting of factory works, strict quarantine rules, and isolation of areas of the disease has hindered the manufacturing of active-matrix OLED (or AMOLED) smartphone displays, where much of its assembly takes place in Wuhan itself. Production of smartphone displays dropped by 40% to 50% in the first quarter of 2020 but steadily rose with each quarter, according to research by Omdia.
3.1 Impact on 5G antenna manufacturing
The production of 5G antenna in China was also affected when factories were shut down due to COVID-19 but was somewhat offset by factories in Taiwan that remained open, according to Omdia. Kevin Anderson, a senior analyst in Omdia claimed that smartphone makers in China such as Huawei, Oppo, and Xiaomi had aggressive plans in 2020 and were rolling out 5G quite vigorously before the delay in production of 5G components.
Production delays in China did not influence Samsung and its smartphone manufacturing yield. Samsung owns the largest global smartphone market share and most of their production takes place in Vietnam. Apple, who makes most of its iPhones in China, pushed back the reveal of its 5G iPhone to the early fourth quarter of 2020 – iPhone 12, 12 mini, 12 Pro, and 12 Pro Max – and preorders began in early November.
Smartphone manufacturers are said to typically introduce new models late in third quarter to drive sales in the fourth quarter to the highest. Delays in unveiling of new models are predicted to extend sales cycle to the first quarter of 2021.
Many believe that the 5G network evolution will be the most revolutionary one yet – a significant majority of businesses views 5G positively despite worries about its safety or security implications it may bring, according to Accenture’s 2020 global study.
In its study to understand how much businesses understand about 5G, the extent of their adoption of the technology, and their perceived impact of 5G technology, more than 2600 businesses and technology decision makers were interviewed in 2019. The results of the study were published in the Accelerating the 5G Future of Business report in the following year. Businesses across 12 industry sectors from Europe, North America, and Asia-Pacific participated in this study. The interview questions were repeated from a previous study featuring the same topic published in 2019, with the 2020 study placing more emphasis on security, consulting, and monetization.
Businesses that are actively adopting the 5G technology are looking forward to a promising future, with many that are aware of the huge potential of 5G technology, according to survey findings. Adoption of 5G technology is seen as tremendously beneficial and awareness of its capabilities is growing. When asked if companies expect 5G usage to support mobile workers in the next four years, 85% of the respondents agreed compared to 68% in the previous year. Almost four-fifths (79%) of the respondents anticipated a significant impact 5G will have on their organization while more than half (57%) thinks the technology will be revolutionary, compared to the previous comms networks where only 24% of the respondents think that the impact of 4G was revolutionary.
4.1 Price concerns
Accenture’s 2020 global survey also investigated how far along businesses have weighted the potential costs of embracing 5G technology. One hot topic is the operational cost of 5G, where four-fifths (80%) of the respondents are convinced that the adoption of 5G technologies will increase the cost of managing the organization’s IT infrastructure and applications. When asked about their thoughts on the upfront cost of adopting 5G technology, almost one third (31%) of the respondents expected it to be rather cost prohibitive.
Many corporations are also starting to realize that they may need external support when implementing 5G technologies if they want to unlock its full potential, with almost three-quarters (72%) of the respondents voicing that they would need assistance in imagining how 5G can be used as a connectivity solution. Business corporations also seem to be less keen on developing their own 5G applications in-house, with only 14% of the respondents expressing plans to do so, which is a significant drop from 23% of the respondents from the study conducted in the previous year.
4.2 Skepticism on security
Despite the overwhelming positivity on the adoption of 5G technology, security is still a huge concern. There is a small increase in fears and worries about the security implications of adopting 5G technology, from 32% in the previous year to 35% in 2020. More than half of the respondents (62%) were fearful of the vulnerabilities 5G may expose them to, such as cyber-attacks. The respondents also believe that most of the risk would originate at the user level, be it the devices used or the people themselves.
The relationship between 5G and its perceived security risk is complicated, according to George Nazi, Accenture’s senior managing director and lead of communications and media industry. He elaborated that the study showed that while executives anticipate the business security 5G may promise, the network architecture of 5G also presents new challenges to user privacy, increase in connected devices and networks, and supply chain integrity as well as service access.
In response to these concerns, about three-quarters (74%) of the respondents expressed that they expect to redefine security procedures and policies as 5G adoption takes place. Nazi also added that the right combination of business strategy and environment would bring forth exciting 5G use cases and business outputs. Communications service providers will need to act now if they want to be at the core of the 5G environment to unlock its full potential.
Unlike 4G, the fifth generation of mobile connectivity is not just a single flavor. Some may even akin 5G to a block of Neapolitan ice-cream, in which the three-flavored confectionary has three distinct personalities, each with its own new and advanced characteristics.
The three different frequencies that 5G operate in separate 5G into three distinct types – low-band, midband, and high-band. Each frequency has its own unique characteristics, which makes the three different types of 5G so different from each other, according to senior vice president of 5G strategy and global carrier operations at Cradlepoint Inc. Lindsay Notwell. Cradlepoint Inc., based in Boise, Idaho, is a networking vendor that has since been acquired by Ericsson.
What makes 5G revolutionary is not the discovery of new characteristics of each spectrum. In fact, the unique capabilities of each 5G spectrum are built upon that of the previous cellular generations and are aimed to solve the problems that the past generations brought to existence. What makes 5G revolutionary is its ability to enable the application and use of advanced techniques to enrich enterprise networks.
5.1 Low-band 5G, the vanilla of 5G
Back to our comparison to Neapolitan ice-cream, low-band 5G is akin to the vanilla flavor. Closest to 4G and 4G LTE, low-band 5G operates on frequencies closest to TV and radio stations. It is a classic flavor that people are familiar with and basic in terms of advanced frequencies.
You might ask, what makes low-band 5G unique from its predecessors? For starters, low-band 5G can travel ten times faster than 4G as well as long distances, according to Notwell. Traditional TV stations utilized similar, if not identical, frequency bands because of how capable it is at providing coverage to large areas. Some TV stations are still using the same frequency band to provide their services. Low-band 5G ranges from 600MHz to 900MHz, according to the United States Federal Communications Commission (FCC).
One thing about low-band 5G though, is that it is not as fast as its other band brothers. This explains its ability to travel further than the other 5G spectrums. Its low bandwidth characteristic means that it has a lower capacity to carry data but it can carry further compared to higher frequency spectrums. Notwell compared it to a two-edged sword – on the one hand, low-band 5G have a greater reach, lower frequency, and better penetration, but on the other hand it is not very wide.
5.2 Midband 5G – the Chocolate of 5G
The chocolate flavor of our three 5G frequencies is the midband. Although it is said to be a bit more adventurous than vanilla, it is still not as hyped as its higher frequency brother. Mainly synonymous with the sub-6GHz spectrum, midband 5G ranges from 2.5 GHz, 3.5 GHz, and 3.7GHz to 4.2 GHz bands, according to FCC. It is five times as wide as low-band spectrums, according to Notwell.
Midband 5G’s wider characteristic allows it to carry more data but its ability to travel is limited compared to low-band 5G. Higher frequencies of midband 5G can be hindered by buildings and other solid objects but issues of permeation are more prominent with high-band 5G.
5.3 High-band 5G – the Strawberry of 5G
High-band 5G is the complete opposite of low-band 5G – high-band 5G has a short travel distance but it can travel at extremely high speeds. As the strawberry flavor of 5G, high-band 5G prides itself in its speedy flavor. This spectrum lies in 24GHz, 28GHz, 37GHz, and 47GHz bands, according to FCC.
Additionally, much like how strawberry ice-creams have extra strawberry bits in them, high-band 5G also has its own addition – millimeter wave (mmWave), a spectrum of frequencies between 30GHz and 300GHz. The mmWave spectrum has high bandwidth capabilities, allowing it to carry more data at high speeds while also offering high download speeds. Its high capacity and tremendous speed led to an increase of global interest in 5G technology.
However, the mmWave spectrum has one huge drawback – its ability for penetration is dismal. The mmWave spectrum can only travel where there is no physical obstruction at all and its transmission is susceptible even to heavy rain as raindrops can absorb, scatter, depolarize, and diffract mmWave signals. Notwell notes that its permeation issue is its biggest challenge and strategic installation of mmWave technology will determine an organization’s success or failure in adopting 5G technology.
Since it is not recommended to rely solely on mmWave, new technologies are in the works to enable simultaneous implementation of both 4G and 5G technologies at the same frequency. This is also known as dynamic spectrum sharing, according to Notwell.
5.4 Assorted toppings to enhance 5G capabilities
Dynamic spectrum sharing can be applied on every 5G spectrum, like an assorted topping that effectively enhances every 5G flavor available. Other toppings include ultrareliable low latency, enhanced mobile broadband, and IoT capabilities.
With dynamic spectrum sharing, the different types of 5G can coexist with 4G on the same spectrum. Implementation of both 4G and 5G technologies on the same spectrum will become increasingly common as carriers began shutting down 2G and 3G services to free up spectrums that were previously allocated solely to 2G and 3G technologies. This would allow them to reassign some of those spectrums to increase their investments the operation of both 4G and 5G technologies, according to Notwell.
Dynamic spectrum sharing is beneficial to organizations that already have 4G technologies in place but are not ready to fully invest in 5G technologies. Notwell explains that 4G is capable of supporting more than 95% of use cases that are out today. One common strategy is to utilize 4G while deploying 5G only when and where it is available. This essentially allows organizations to enjoy both 4G to 5G simultaneously, as if adding a scoop of coffee ice-cream, that is, 4G, to their Neapolitan flavor of 5G technologies.
Ultra Reliable low latency – a topping which fits well with every single 5G flavor – will unlock all kinds of possibilities and use cases that can be enhanced by real-time responses, such as video conferencing and augmented reality (AR). With 5G, communication can still be instantaneous and seamless even when participants are not physically present in the same room.
This feature could potentially save organizations millions of dollars as it eliminates the cost and need to fly their employees to conferences or training, according to Notwell, as these could be done remotely with the use of video conferencing and AR. Moreover, 5G can also enhance video surveillance capabilities and facial recognition.
Enhanced mobile broadband is a no-brainer – it is an upgraded mobile broadband connectivity with better speeds and lower latency than existing mobile broadbands. Notwell believes that organizations would be able to cut costs by “cutting the cord”, literally and figuratively, since 5G will be much more reliable and faster.
Some experts even questioned if 5G will completely eliminate Wi-Fi, seeing as enhanced mobile broadband promises to offer better connectivity in terms of reliability, speed, and flexibility, compared to traditional Wi-Fi connectivity and existing cellular technology.
Notwell further predicts that there will be a radical change in wide area networking, from one that relies on wired connectivity to that of wireless connectivity, since wireless provides so many benefits and frees up both space and time. According to Notwell, one big challenge retailers face is aligning their store opening date with the internet wiring installation date. However, wireless connectivity will solve this issue promptly with its plug-and-play capability.
All three 5G spectrums are able to support large scale machine-to-machine (M2M) communication, enhancing the use of IoT devices for both communication and data collection. Particularly, the ability of 5G to support narrowband IoT, which is a type of low-power IoT technology, means that a massive amount of IoT devices can be connected using 5G.
Narrowband IoT enhances the battery life of its devices drastically, allowing an IoT device to operate up to 10 years without needing a single battery change, according to Notwell. Moreover, 5G allows interoperability among different IoT systems, minimizing management of multiple different systems in a single network. Each 5G spectrum seeks to support in a rapid and reliable manner to all devices with its numerous and varied capabilities, in a single 5G network.
Organizations in the Asia-Pacific region are growing more interested in software-defined wide area network (SD-WAN), a technology that allows organizations to become less reliant on traditional multiprotocol label switching (MPLS) connectivity links while also supporting their transition to a more cloud-based work environment, according to Silver Peak’s president of global field operations, Ian Whiting. Additionally, the region’s appetite for SD-WAN would increase in conjunction with the availability of 5G services, as it offers a backup link to improve network resiliency.
Whiting and Dean Vaughan, Silver Peak’s vice-president for Asia-Pacific and Japan, offered their views on the adoption of SD-WAN in the APAC region, challenges in deploying SD-WAN, and common misconceptions about the technology.
6.1 SD-WAN Market in Asia
Whiting describes Asia’s SD-WAN market as exciting and especially abundant compared to other regions, although the region poses challenges of its own with its many different players and markets. It is vital to pick the right countries to focus on and to employ the right strategy and people. This is especially crucial since the SD-WAN market is evolving beyond its early adoption use cases.
While early SD-WAN adopters are looking into replacing traditional MPLS with SD-WAN, enterprises nowadays are using SD-WAN to simplify the infrastructure of their branch offices, retire legacy assets, and increase connection speeds. Although some markets are still in the early stages of adopting SD-WAN, many others are realizing the multiplier effect benefits the deployment of SD-WAN is providing. This is especially evident in companies that prioritize their transition to a more cloud-based work environment, with the advent of more sophisticated cloud applications.
Whiting elaborates that there are some very interesting use case examples, where companies that have acquired other companies use SD-WAN to give different branches access to their core applications. Compared to traditionally laying out multiple new links to connect fresh sites and data centers, a cloud-based WAN architecture simplifies and shortens the time needed to connect everything together.
One of the challenges Silver Peak faces is their restricted capacity to meet all market demands, as they are a relatively small company with investments in Asia tied directly to its growth in the region. In response to this challenge, the company decided to employ a strategy that allows them to offer their products to a larger market by partnering with other service providers and system integrators.
Silver Peak initially sold directly to their customers, but as both the company and market experience continuous growth, they adopted a different strategy by relying on partnerships. Through these partnerships, they are also able to cover more markets as most businesses prefer to work with managed services providers that are able to offer a multitude of services and products, including SD-WAN.
6.2 Market Quirks in Asia
Vaughan is keen to share the different SD-WAN use cases in Asia, depending on the characteristics of selected countries. For example, Japan and Singapore are looking for an efficient way to break and route out traffic from branch offices to SaaS (software-as-a-service) applications like Salesforce and Microsoft Office 365.
On the other hand, countries like Malaysia, Philippines, and Indonesia are concerned with both breaking out internet traffic as well as scaling down their dependence on the costly and mostly unreliable MPLS lines. SD-WAN is a viable solution that allows these countries with large and dispersed populations to improve enterprise network stability by building network redundancy using broadband or LTE. This way, businesses can reconsider their usage of expensive and difficult to maintain MPLS equipment at branch offices.
SD-WAN use cases in Australia are driven by a combination of MPLS cost-cutting, internet breakouts, and voice traffic. SD-WAN ensures high quality voice traffic by using two links to maintain the call. Up to 30% of performance degradation can be handled by SD-WAN, allowing end-users to enjoy seamless voice calls while remaining oblivious to the presence of network disruption.
The reason organizations use SD-WAN in one country can be very different from another country depending on their needs and existing infrastructure. Moreover, as time goes by and customers have experienced a proof-of-concept (PoC), they will quickly realise that SD-WAN not only provides MPLS cost savings but also many other additional benefits.
6.3 Challenges in SD-WAN deployment
Since SD-WAN is a relatively new technology, understanding its interdependencies and potential complexities of its deployment is vital, according to Whiting. Much like how when complex multi-site routing started deploying 10 to 15 years ago, there exists a learning curve to know how to integrate new mechanisms with legacy infrastructure.
Many customers prefer to keep their existing infrastructure instead of ripping everything out and replacing it with SD-WAN. As such, it is important for both SD-WAN and legacy architecture to work in tandem. While this does not completely inhibit the deployment of SD-WAN, this led to a need for technical know-how as well as partners who understand what the market wants.
SD-WAN is not suited for small and medium enterprises, Whiting pointed out. While SD-WAN can still be beneficial to small companies, Silver Peak has decided to focus on mid-sized companies and large enterprises as the gains of SD-WAN is more obvious with more sites. To add further advantage in using Silver Peak’s SD-WAN technology, its API (application programming interface) stack has product level integration with key security vendors, allowing customers to integrate SD-WAN with their security platforms.
Further down its development, SD-WAN may evolve to be more of a commodity and packaged into something else five years from now, and the discussions around SD-WAN would be different. However, as far as Silver Peak is concerned, adoption of SD-WAN is a discrete decision that can only be accurately evaluated over a duration of six to nine months. Over time, the evaluation cycle will condense to a shorter period as the technology is better understood by the people.
6.4 Common Misconceptions about SD-WAN
One very common misconception that customers have is that there exists technology that solves every problem, Whiting revealed. However, it is usually a combination of different technologies that solve multiple problems. This is the reason compatibility with legacy network infrastructure or backward integration are vital.
Ripping out existing infrastructure to accommodate SD-WAN is not a viable solution no matter how much customers love the technology and are moving to the cloud. This is because customers have to honor their contracts and other commitments, which is something that people may not fully grasp or understand completely.
6.5 Companies prefer working with Managed Services Providers when adopting SD-WAN
Silver Peak is very comfortable with working behind the scenes with managed services providers to offer their SD-WAN services, according to Whiting. Since the Silver Peak brand is already established in the marketplace, they are very comfortable with having managed services providers deliver their SD-WAN services on behalf of them.
Moreover, companies have been preferring to work with managed services providers for a while now. Value-added resellers are aware that they cannot profit much by selling hardware and are reinventing themselves as service providers. For Silver Peak, their strategy is to collaborate behind the scenes with large global systems integrators that are interested in having the ability to sell SD-WAN appliances as software while wrapping services offering around it.
There are also huge telcos that are delivering metered managed service. The flexibility of Silver Peak’s SD-WAN allows customers to choose how they want to connect to its orchestrator – either on-cloud or on-premises. Whiting predicts that in the next three to four years, there will be a much faster uptake of fully managed services which could prove beneficial to Silver Peak.
6.6 Future of SD-WAN
Over time, 5G is anticipated to be one of the use cases and benefits of SD-WAN, according to Whiting. With most companies having some form of five-year plan for their IT infrastructure and networking and as SD-WAN develops further, the utilization of LTE or 5G as an alternative transport is possible depending on the customer’s location and budget they are willing to work with. The integration of mobile connectivity will be an interesting use case but the current primary reason for using SD-WAN is still for transitioning to a cloud-based work environment. Companies that are not adopting cloud architecture that enables them to maximize their cloud application use will be left behind, according to Whiting.
Vaughan also points out that some SD-WAN suppliers have built-in SIM cards in their hardware. However, one big challenge with having this feature in their hardware is that when it comes time to transition from 4G to 5G, customers will be forced to upgrade their hardware altogether. By deliberately keeping the LTE detached as an external device, Silver Peak is able to keep business expenditures low in the advent of 5G.
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