At Volaris, our philosophy is to acquire good vertical market software companies and help them become great companies. We do this by investing in the business itself, as well as in the people that run those businesses.
In addition to providing training on how to efficiently operate vertically focused software companies, we also focus on ensuring that our business leaders keep up to date with industry trends, or help define the direction of their niche markets.
Most recently we have attended the Mobile World Congress in Barcelona, where we had the opportunity to gain insight into the latest trends that are expected to define the communications space for the foreseeable future.
Below is a summary of our learnings and takeaways, which in some shape or form will find their way into how our products serving the communications space will evolve, so that we remain successful in this exciting market.
The Mobile Network: From 4G to 5G
As the current generation of mobile network technology is still being aggressively rolled out, one of the most discussed topics was 5G, which is the next protocol in broadband wireless communications. While there are no technical standards defined for 5G, the general agreement is that 5G capabilities will be required to accommodate the explosion of communication between devices that are expected to be internet-enabled over the next few years. Once deployed, 5G is expected to bring about the full realization of the potential of the "Internet of Things" (IoT), such as connected smart cities, all manner of wearable health and wellness applications, driverless cars, etc.
From a performance perspective, 5G promises vastly greater network speeds of up to 800Gbps, which would allow 33 HD films to be downloaded in a second. This is sufficient network capacity for even the dreamiest of IoT scenarios, where 50 to 100 billion devices are estimated to be connected to the internet. Whether the above mentioned speed of 800Gbps is reached or not, we can be sure that capacity and speed constraints will be a discussion topic of a prior generation.
When will we get to see the first 5G networks is still very much unclear, however, Samsung hopes to launch a temporary trial 5G network in time for 2018's Winter Olympic Games in South Korea. Not to be outdone, Huawei is racing to implement their version of 5G for the 2018 Soccer World Cup in Moscow.
Internet of Things is Here
Cisco predicts a $19 trillion global opportunity, and it is easy to see that global investment capital is rushing towards this space. At this years show, the volume and prominence of IoT devices beyond smart phones was staggering. The devices ranged from a proliferation of wearables to smart cars, and smart home monitoring devices. As more money pours into IoT, innovation is likely to continue and connected devices will start to become mainstream. The big question is whether the appetite for IoT is ahead of the network capability without higher speeds of fixed broadband and 5G. The topic and fates of higher capacity and speed of fixed broadband access, 5G, and the proliferation of IoT are clearly intertwined.
Beyond selling devices, monetizing services from those devices was also a hot topic of discussion. As advertising is always a logical choice, Nokia’s research into predictive advertising and services based on data collected from IoT devices is an exciting new proposition. This will allow for highly targeted ads that go beyond the users’ profile by analyzing data real-time from an individual’s connected device, and ads will be served by other connected devices, also real-time: ‘Jack, you’ve burned 900 calories this morning. Time for a dozen donuts for half price right here, just look to your left”.
It will be exciting to see next year if the first IoT “killer application” that is monetizable clearly emerges to drive necessary acceleration of industry-wide investment.
Software on the Network: SDN and NFV
Software-defined networking (SDN) and Network Functions Virtualization (NFV) are new ideas around the orchestration and management of networks and services. It is evident that big money is being poured into SDN and NFV, as these technologies threaten to revolutionize communications networks over the next 20 years. The key benefits center around network functions being deployed on general purpose standardized hardware to reduce capital and operational expenditures, combined with highly flexible and configurable software that accelerates service and product introduction timeframes.
It is not clear yet that standards exist to make these concepts a reality on a large scale, but it is it clear that innovations will come from a combination of large established players with deep pockets and new innovative well-funded new entrants. I expect SDN and NFV innovations to be an expanding “mainstay” at this show moving forward.
Innovation Coming from China
At this year’s show, Chinese manufacturers had their largest presence to date. Not only have they demonstrated their willingness to invest in innovation, but they have also delivered and I would expect them to have a strong presence in 5G, IoT, and SDN/NFV moving forward. Their competitive edge is extreme focus and work ethic, access to capital and manpower, combined with passion for technology innovation.
At future shows, floor space dedicated to Chinese companies could match and outpace the rest of the world. Partnering with Chinese innovators will be key to existing players maintaining their leadership, sustaining their macro-economics, and continuing to be at the forefront of innovation.
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