CSPs are being cut out of enterprise 5G projects – study

A new bit of research conducted by Omdia and BearingPoint//Beyond has found that only a small proportion of B2B 5G deals are being done by operators.

This finding is somewhat counter-intuitive when you consider that most CSPs also expect most of their 5G revenues to come from sources other than consumers. You’d think they would be putting a bit more effort into getting chummy with the enterprise sector in that case, but maybe they are and they’re just rubbish at it.

“Only one in five early enterprise 5G deals are CSP-led, proving that the way CSPs want to sell is at odds with the way in which businesses want to buy,” said Angus Ward, CEO of BearingPoint//Beyond. “What’s deeply concerning is that some of these early deals, such as the ones we see in automotive, cut out CSPs entirely – even connectivity is being provided by other suppliers.

“Businesses want to buy complete solutions that fit their needs and help them solve business problems, rather than individual technology assets. This is a multi-billion-dollar opportunity that CSPs need to address fast and requires CSPs to collaborate with enterprises and SMBs to better understand their reality.”

“CSPs will only realize value from 5G if they can identify, partner, codevelop, implement, and run a proposition with application-specific and industry-specific specialists,” said Evan Kirchheimer, Research VP, Service Provider & Communications at Omdia. “CSPs that can orchestrate such a complex web of relationships will be capable of capturing a greater share of the market and will not be relegated to being one of many connectivity providers competing solely on price.”

That’s the thing they seem to be especially rubbish at. Even now operators are selling on features and benefits rather than solutions, even though the rest of the world got that memo a decade or two ago. The report urges them to focus on applications and vertical-specific solutions rather than just banging on about how great 5G is.

According to Omdia almost 80% of early enterprise 5G deals involve the manufacturing, transport, utilities and energy/mining sectors, so that seems to be where the smart money is. Furthermore the COVID-19 pandemic seems to be making industry keener than ever to digitise and automate, presumably to minimise disruption when none of their employees are allowed to leave the house. As ever a culture change at CSPs is required, which they’ve shown little historical inclination towards.