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Is Open RAN on the path to dominance?

We have tiny operators endorsing O-RAN, and some giant operators saying they’ll be deploying it (at least in some areas) in 2022. We have giant vendors dissing it, while another giant vendor opens a lab that seems aimed at encouraging it, and a third seems to be promoting it actively. Two vendors have gotten together to address the biggest technical issue that’s been presented as a reason not to adopt it. Lots going on, but what’s underneath all the talk?

First, operators are telling me that they absolutely want to see an open RAN for 5G. That’s true of almost 100% of operators, in fact. Well over 80% say that they will be deploying it in at least part of their service footprint. Not only that, network vendors are expecting to see open RAN deployments and are looking at how their own products can be woven in to take advantage of the momentum.

Second, if there is a market for private 5G at all, that market is going to be based on an open RAN implementation. Few enterprises have done any rational planning of a private 5G deployment, but those who have don’t hesitate in telling me that they are presuming they would use an open RAN strategy from the first, everywhere.

Third, open RAN is well beyond being “half-baked”, but it’s not iced yet. There are way too many pieces of technology involved, too many vendors in some areas and too few in others, and the nature of the relationship between open RAN solutions, 5G overall, and IP networking, is far from clear even to network operators with savvy staff planners available. For those without the in-house skills, the whole picture is so murky that most don’t even know where to start or who to ask.

Forth, by 2022 we will have reached a critical point in the open RAN space, the point where we either resolve all the significant issues with the open-model approach to 5G, or we throw in the towel and admit that 5G has to be a vendor-specific deployment. Huawei, the giant but politically troubled price leader in networking, seems confident that the open approach will fail. Or, maybe, they’re confident that their own future depends on its failing. Either way, there’s sure to be a giant throwing shade on whatever happens in the open RAN space.

I’ve heard a dozen different presentations by open RAN suppliers and integrators, and the truth is that none of the ones I’ve heard would address all the concerns that operators are expressing in my dialogs with them. The suppliers seem to fall into one of two categories; either they’re savvy and technically optimized, but too small to have any business credibility, or they’re big, credible, firms who are trying to shoehorn open RAN into their current technology direction.
In other words, it’s not impossible that this whole wave will in fact collapse, that Huawei’s dismissing of the concept and Ericsson’s maybe-fingers-crossed endorsement are prudent choices to be proven correct within a year.

What’s the problem? There’s more than one, and there may even be a cascade of them.
To me, the big problem is that 5G isn’t even finished as a standard. The 3GPP’s 5G core specifications already define a Release 18 that’s not even started. Release 17 won’t be finalized and frozen until mid-2022. Almost all of what we hear about today in the media, and all that’s available in real services, are either implementations of 5G RAN overlaid on 4G networks, the so-called “non-stand-alone” or NSA version, or pre-standard versions of the standalone 5G model. Most vendors think that implementing anything in the 5G core before Release 17 gets to its Stage 2 freeze point this summer is a risk. All this means that we’ve not really had a model for all of 5G, we’ve been kissing its fingertips. That makes it difficult for a vendor to present the entire story of 5G credibly, because they’d be unable to deliver a standard implementation if somebody liked what they heard.

The second problem is that vendors are about making money first and foremost, and about solving problems or addressing opportunities only if they make money. There will surely be mobile network equipment vendors (like Ericsson, Huawei, and Nokia) who will be providing everything needed, because that’s how they do make money. The problem is that open-model networking in general, and open RAN (O-RAN) in particular, doesn’t even have many vendors who offer everything in the RAN space, much less the rest of 5G. You can see that by the fact that we’ve only now heard that there’s a solution to the massive MIMO problem that’s been a stumbling block for open 5G RAN strategies.

The third problem is that the question of the business case for 5G hasn’t been answered in a way satisfactory to many operators and vendors. Sure, the biggest reason why the media is full of 5G hype is that hype is the foundation of click bait, which is the foundation of media revenue, but the pace of 5G adoption is dependent on whether it’s simply an evolution of 4G or that it opens a new revenue stream.

How do we solve these problems? “We” almost surely don’t, in the sense that the collective pronoun represents some sort of community effort. The problems are going to get solved because some big player decides to solve them. Who will that player be? A cloud software player or a cloud provider.

In this corner, as the boxing introductions go, we have the cloud software giants, Dell/VMware, HPE, and IBM/Red Hat. These players understand how to build software, and large and complex software ecosystems. They probably have the majority of the pieces of a complete and open 5G, including and especially the RAN, and they certainly have enough of the pieces to be able to make money selling an integrated strategy. That means they could step up and draw a diagram of what open 5G would look like, and they wouldn’t have to get former sideshow pitchpeople to give the presentation.

In the opposite corner, we have the cloud giants, Amazon, Google, and Microsoft. These are the companies who understand hosting as a service, which means they understand both hosted function deployments on which 5G is based, and “as-a-service” in terms of a consumption model. They know that they could make open 5G into a populist revolution, something that could launch itself as a social media craze, and that’s a good thing. They also know that if they do that, and if they tap off the hosting that 5G would create, they could keep a major competitive group out of the market. That market could amount to one hundred thousand data centers, so keeping competitors out is an even better thing.

Every one of the players I’ve mentioned, in both corners, have the technology resources to make open 5G RAN, and open-model 5G overall, succeed. They could make money, a lot of money, on it. But every one of those players also has a fear, perhaps the greatest and most paralyzing fear that any seller ever faces, the fear of the educational sell.

Seller comes in for a meeting with Buyer to present WizzyOpen 5G, the Next Big Thing in Just About Everything. Buyer is dazzled by the PowerPoint, drinks a few lunches, and when the seller whips out the order book to get something signed, says “OK, all I need is for you to help me make the business case for my CFO, get my staff trained, write a contract that unloads every possible risk I might have onto you, and set up the service sale program that I’ll use to sell the services WizzyOpen produces to my prospects.”

No seller could possibly even attempt that, because they know that when they do all that up-front heavy lifting, somebody else will jump in and sell SuperWizzyOpen at a discount (because they didn’t have to bear the cost of all that fluffery). The sellers also know that no salesperson could ever make quote if they sat around waiting for all those objection dominoes to fall, so all their salesforce will be doing job interviews instead of sales calls. Case closed.

That raises the biggest problem, which is buyer education. And no, don’t say that the buyer will get it online. Many believe my blogs are interminable; they want their insights digested into 500 words or less. I did a quick calculation, and a minimum complete 5G story of a credible level of detail would require 150 slides and 50,000 words of text. Who would develop that? The vendors would all wait for a competitor to do it, saving them the trouble.

We have to figure out how to get 5G presented holistically. We have to get open RAN and open 5G framed out and presented in that context. If that can be done, then we are assured of open RAN success. Do we get an industry group to take it on? It will take three years to get consensus on what should be in it. So how?
The only realistic avenue I see for 5G education in general, and for open RAN education in particular, lies in the vendor certification programs. However, these programs usually focus on individuals who are responsible for maintaining a product set rather than considering it, and they usually develop after the product set has been sold successfully. For open RAN in particular, the risk of depending on vendor certification is clear; how does a vendor justify the cost of such a program and prevent seeding the market with literate buyers for competitors to exploit?

Time, and opportunity, is how. At some point, one of the three sellers in one of the two corners will get so complete a solution put together, and will get so powerful a presentation of that solution built, that they’ll know they can jump in and steal the majority of the opportunity before others can build on their educational success. The question is whether the open RAN market can wait for that. I think it’s going to be close.
Authored by Tom Nolle, President, CIMI Corp.

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