Align your 5G vision to the changing demands of the post-pandemic enterprise
Enterprises are relying on their technology providers more than ever before.
Alongside its other profound impacts, the COVID-19 pandemic has accelerated enterprises’ digital transformation plans, spurring greater demand for emerging technologies that can play a central role in their post-pandemic recovery. This is creating new opportunities for service providers to the enterprise: the majority of respondents now agree that the crisis has brought them closer to their technology suppliers than before.
COVID-19 has boosted enterprise interest in 5G and IoT
5G and IoT are more prominent within an organization’s thinking than ever before. Among respondents, 52% say that the pandemic has increased their organizations’ interest in 5G and IoT, with just 13% reporting a downturn. At the same time, 41% agree that the crisis has triggered greater leadership focus on 5G opportunities. This is an important development, mirrored elsewhere by a drop in the proportion of respondents year-on-year citing a lack of leadership support as a 5G challenge.
5G’s importance is reflected in enterprises’ long-term spending intentions. Fifty-six percent of organizations plan to begin investing in 5G in the next one to three years, the highest proportion of any emerging technology category. This will see 5G overtake both legacy IoT and augmented or virtual reality in terms of enterprise adoption in years to come.
5G-based IoT use case preferences are evolving
Preferred 5G use cases are also the scene of change as businesses look for new sources of growth, innovation and operational efficiency. Across all sectors, critical infrastructure monitoring and private network capabilities have both grown in importance, now cited by 41% and 39% of respondents respectively. However, interest in 5G-based virtual reality (VR) or augmented reality (AR) applications has dropped, cited by 31% of organizations, compared to 35% last year.
Enterprise views of sector-specific use cases are even more fluid, reflecting the quickening pace of industrial transformation in the wake of the COVID-19 pandemic. 5G’s role in health care is a striking example. Collection of wellness data has dropped in importance: the pandemic has seen health systems achieve this without the need for 5G. However, more sophisticated use cases where 5G can play a unique role — including connected hospitals and remote surgery, for example — have grown in importance.
However, growing receptivity toward more sophisticated use case preferences is not common to all sectors. The enterprise views of automotive and transportation application scenarios reveal a more nuanced shift in perspective. Although interest in self-driving cars has increased, the appeal of vehicle-to-vehicle communications — where 5G’s ultralow latency is critical — has declined. Freight monitoring is a growing focus, underlining that established IoT use cases are also candidates for improvements via 5G.
These changing sentiments toward use case development create opportunities for 5G providers, but challenges are also present. The ability to pivot and adapt to new customer demands is vital. Furthermore, resilience and business continuity are also top-of-mind among enterprises: 31% believe that use cases provided by suppliers do not adequately address their business continuity needs. Looking ahead, tangible visions of what 5G can deliver will help enterprises invest with confidence.
Articulating the 5G vision74%
of enterprises believe vendors should articulate a more coherent vision of 5G so they can construct a robust investment case.
Convince customers that you are the ideal partner to deliver digital transformation with 5G
Businesses want 5G to complement both emerging and existing technologies.
One important feature of enterprise attitudes is that companies do not see 5G providing a potential increase in value by itself. Companies are keen for 5G to take advantage of – and be harnessed alongside – other emerging technologies, many of which they are already investing in. This is reflected in their expectations that 5G is complementary to other technologies. More than half of the respondents see artificial intelligence (AI), automation and edge computing as complementary to their organizations’ 5G and IoT strategies.
These expectations around complementary investments in emerging technologies are not optional benefits of the enterprise 5G and IoT agenda, they are viewed as critical to its success. Businesses’ 5G priorities highlight this: exploring 5G’s relationship to other emerging technologies ranks highest, while alignment of 5G and cloud or edge capabilities specifically is also top-of-mind. These sentiments, as well as interest in the role 5G can play in new business models, underline that 5G investment is intrinsically linked to enterprises’ digital transformation journey — a reality that 5G providers cannot ignore.
|Enterprise 5G priorities|
|1. Explore 5G's relationship to other emerging technologies|
|2. Explore 5G's impact on future business models|
|3. Align 5G and cloud or edge computing capabilities|
|4. Explore 5G benefits compared with Wi-Fi and 4G technologies|
|5. Mitigate cybersecurity risks relating to 5G|
Ultimately, enterprises are not considering 5G in isolation. Apart from its relationship to other emerging technologies, businesses are also mindful of how 5G can be harnessed with existing technologies and processes. The perceived complexity of integrating 5G and uncertainty regarding deployment scenarios lead as internal challenges, those that are within organizations’ control. Although businesses are warming to sophisticated 5G use cases, many of the uncertainties they face are practical rather than strategic.
5G integration anxiety38%
of enterprises view the complexity of integrating 5G with existing technologies and processes as a top internal challenge.
Operators and equipment vendors are considered lacking in digital transformation expertise
Enterprises’ holistic attitude to 5G, one which focuses on its transformational role, puts pressure on 5G providers to engage with their customers in new ways. Communicating the technological advantages of 5G is not enough. In this light, 5G providers simply have to adapt their dialogue with customers, but this in itself presents challenges for some types of suppliers. Telecommunications operators provide a striking example in terms of how they are perceived by businesses. Although clearly viewed as experts in IoT, less than one in five respondents view them as digital transformation experts. This is an area where network equipment vendors also underscore, relative to other types of service providers to enterprises.
Resolving this credibility gap is a critical action that telecommunications providers and technology vendors must take. As things stand, 64% of businesses are struggling to identify the right type of supplier to address their 5G strategy: traditional providers of mobile technology must do more to convince enterprises that they are best placed to support them.
Agility, end-to-end capabilities and a collaborative mindset: attributes of the successful 5G provider
As enterprise strategies for 5G-based IoT continue to evolve, their supplier needs are also changing and the attributes they are seeking are in flux. While competitive pricing is important now, enterprises will attach less importance to this in years to come. End-to-end solution capabilities will rise in importance, while speed of deployment and execution will retain its prominence as a key attribute sought in suppliers.
|1||Speed of deployment and execution||Speed of deployment and execution||No change|
|2||Competitive pricing or pricing model||End-to-end solution capabilities||Up|
|3||Ability to customize and tailor offering||Ability to co-create new products and services||Up|
|4||Ability to co-create new products and services||Understanding broader business or industry needs||Up|
|5||Breadth of service offering||Breadth of service offering||No change|
5G providers’ ability to co-create new products and services with their customers is another attribute that will be critical. Ultimately, businesses want a 5G provider that can work closely alongside them in the years to come. Pure cost or technology advantages alone will not distinguish suppliers in the new world of enterprise 5G. Respondents are emphatic on the need to achieve business outcomes in collaboration with their suppliers.
The 5G collaboration imperative79%
of enterprises believe their organization will prioritize vendors that can deliver 5G business outcomes as collaborators rather than on pure cost or technology benefits.
Adapt your approach to the needs of specific regions, industries and buyer groups
European enterprises are most at risk of failing to take advantage of 5G.
While 5G adoption rates in all regions are promising, there are signs that European businesses may not be as well positioned to take full advantage of 5G’s potential to transform. Their investment intentions are promising, with 71% currently investing or planning to invest in 5G, compared with 73% of all respondents. However, they underscore other regions in terms of both their appetite for digital transformation using 5G and accompanying demand for suppliers to help them achieve this.
With these attitudes in mind, 5G providers should double down on enterprise customers in this region, ensuring that they understand the true potential of 5G and the business outcomes it can deliver. This focus on education of 5G’s potential and benefits is important: 29% of European respondents view a lack of understanding of 5G benefits and use cases as a leading challenge at their organization, scoring ahead of other regions.
Energy respondents in focus: more demanding customers pose new challenges
As 5G providers engage with customers from different industry sectors, they should adapt their approach based on their specific needs. While some sectors may require more education about 5G benefits, others are already better informed and more demanding. Energy sector respondents bear this out. They are less likely to cite a lack of understanding of 5G benefits as a challenge compared to other sectors but are more likely to have accelerated their digital transformation programs due to COVID-19. The energy sector is more likely to demand better 5G visions from their suppliers and more inclined to feel that current use cases offered by vendors fail to meet their needs. This underlines that even when enterprise customers are more confident and knowledgeable about 5G’s potential, this creates additional challenges, such as meeting changing use case demands.
Product development teams want greater engagement with suppliers
Survey responses according to respondent roles also generate interesting findings. Respondents in technology functions — who account for 50% of the survey sample — tend to be more attuned to the gains made possible by 5G. However, those with product development responsibilities are in a prime position to help develop new use cases that can take advantage of 5G-based IoT. They place greater emphasis on increasing collaboration with 5G providers and growing their exposure to 5G trials and testbeds. 5G providers should respond accordingly, ensuring that their engagement with customers embraces roles well beyond the technology function and that they meet this need for increased collaboration.
Enterprise interest in 5G has increased in the wake of the COVID-19 pandemic, but they need better support from their suppliers if they are to maximize 5G’s role as a catalyst for pervasive business transformation.