The Global Pandemic Ends Blockchain Market Volatility

IT vendors seeking to convince CIOs and CTOs about their blockchain-related solutions have been challenged by an apparent shift in market perception. Distributed ledger technology hype reached a peak and as a result, the upside growth potential had fallen significantly.

Global blockchain revenues fell by 35 percent between 2018 and 2020. According to the latest worldwide market study by ABI Research, the potential loss could have reached $2.8 billion.

Moreover, the reported 'crypto winter' of 2018 removed 80 percent of the aggregate market cap, and more than 2,000 cryptocurrencies collapsed. However, that market correction was enlightening.

Blockchain Market Development

This dampened overall blockchain adoption significantly in other markets, with many startups folding and different verticals showing a distinct lack of market adoption. Furthermore, the COVID-19 pandemic had a significant impact on investment opportunities and appetite for new blockchain applications.

That said, according to the ABI assessment, this dramatic dip in revenue will likely be short-lived. These adverse events culled much of the IT vendor hype and effectively ended the prior blockchain market speculation.

"Many speculative offerings were purged from the marketplace. However, this will be relatively beneficial for the blockchain ecosystem overall, strengthening existing startups and ensuring sounder and more valuable business models emerge over the next few years. ABI Research expects the market to get back to 2018 revenue levels by 2023," said Michela Menting, research director at ABI Research.

The vertical markets poised to take advantage of the new traction are those where successful business use cases are currently applied. The pandemic has had some positive impacts on select blockchain applications, most notably supply chain and logistics management -- due in part to the international scramble for medical systems and personal protective equipment (PPE) supplies.

The pandemic also revealed the inadequacies and flaws of existing procedures, especially in terms of transparency and quality assurance. Blockchain is now a technology that is recognized as capable of addressing these issues.

As such, interest and demand could boost revenue for blockchain applications focusing on use cases in the manufacturing, transport, and storage sectors -- as well as within retail and consumer markets.

Beyond that, interest in blockchain applications for healthcare is soaring, notably for sharing timely, relevant, and authenticated information on the pandemic (including regarding the spread of infection, containment practices, hygiene-based information, data related to trials and vaccine research, etc.), especially in light of misinformation increasingly being spread online and through social media.

Outlook for Blockchain Applications Growth

"Blockchain projects launched by the United Nations' World Health Organization, alongside many national Centers for Disease Control, show the usefulness of blockchain in these circumstances. Healthcare applications are expected to increase faster than anticipated in light of the pandemic," concludes Menting.

I believe that the global pandemic will continue to drive additional high-growth opportunities for the savvy IT and networking vendors that are able to capitalize on global market disruptions and associated trends.

As an example, in addition to the renewed blockchain technology upside, there will be an increasing demand for comprehensive cloud-based enterprise access security solutions for remote workers. More CIOs and CTOs will be seeking new information and guidance on this key DevSecOps topic.

Why Pioneers Deploy IoT and AI with Digital Twin Apps

Across the globe, many forward-thinking leaders continue to provide funds for Information Technology (IT) innovation that's intended to fuel their digital growth. Some apply proven ways to reduce their Communication Services spend, which is typically the largest IT expense, and thereby reinvest that budget.

As an example, despite the disruptive impacts of the COVID-19 global pandemic, 47 percent of organizations plan to increase their investments in the Internet of Things (IoT), according to the latest worldwide market study by Gartner.

Following the COVID-19 lockdown, the survey found that 35 percent of organizations reduced their investments in IoT, while a larger number of organizations are planning to invest more in IoT implementations.

IoT and AI Market Development

One reason behind the increase is that while companies have a limited history with the Internet of Things use cases, those implementers did produce a predictable ROI within a specified timeframe.

"They use key performance indicators (KPIs) to track their business outcomes and for most of them they also specify a time frame for financial payback of their IoT investments, which is on the average three years," said Benoit Lheureux, vice president at Gartner.

In addition, as IoT investments are relatively new, most companies have plenty of near-term cost-saving opportunities to pursue -- such as predictive-maintenance on commercial and industrial assets like elevators or turbines, and optimization of processes such as increasing manufacturing yield.

As a result of COVID-19, 31 percent of survey respondents said that they use digital twins to improve their employee or customer safety, such as the use of remote asset monitoring to reduce the frequency of in-person monitoring, like hospital patients and mining operations.

Furthermore, the Gartner survey findings uncovered that 27 percent of companies plan to use digital twins as autonomous equipment, robots, or vehicles.

"Digital twins can help companies recognize equipment failures before they stall production, allowing repairs to be made early or at less cost," said Mr. Lheureux.

According to the Gartner assessment, a company can use digital twins to automatically schedule the repair of multiple pieces of equipment in a manner that minimizes impact on operations.

Gartner expects that by 2023, one-third of mid-to-large-sized companies that implemented IoT will have implemented at least one digital twin associated with a COVID-19-motivated use case.

The enforcement of safety measures has also fueled the adoption of artificial intelligence (AI) in the enterprise. Surveyed organizations said they have applied AI techniques in a pragmatic manner.

Twenty-five percent of organizations are favoring automation (through remote access and zero-touch management), while 23 percent are choosing procedure compliance (safe automation measures) in order to reduce COVID-19 safety concerns.

For example, organizations can monitor work areas using AI-enabled analysis of live video feeds to help enforce safe social distancing compliance in high-traffic areas such as restaurants and manufacturing lines.

Outlook for IoT and AI Innovation Growth

Gartner expects that by 2023, one-third of companies that have implemented IoT will also have implemented AI in conjunction with at least one IoT project.

In addition, I believe that more CIOs and CTOs will reassess their IT infrastructure maintenance, telecom network architecture, and business technology allocations during the remainder of 2020.

Savvy leaders know that this is a unique opportunity to imagine the upside possibilities, think strategically, and then move ahead with essential digital transformation projects that will reignite growth in the post-pandemic economy, and beyond.

How Fintech and Robo-Advisors Transform Banking

Forward-thinking CIOs and CTOs in the financial services sector have evolved. The increased competition from digital-only challenger banks has redefined customer expectations. While some traditional banks have been disrupted by the rise of fintech, others have advanced and prospered.

Tech-savvy bankers chose to adapt and transform the way they operate, in order to lower their operating costs and compete more effectively. The adoption of Artificial Intelligence (AI) and machine learning has been essential to their digital transformation, plus the use of Robotic Process Automation (RPA) platforms.

While many of these workflow optimizations are in the back-office processes, most also have a positive customer experience impact. Chatbots are being used to offer a better online user experience. Several banks also offer AI-based insights within their mobile banking apps, or AI-assisted investing via Robo-Advisors.

Fintech AI Market Development

According to the latest worldwide market study by Juniper Research, the value of unsecured loans issued via AI underwriting platforms will reach $315 billion in 2025 -- that's up from just $24 billion in 2020.

This significant growth of more than 1,200 percent over the next five years will be driven by banks and other lenders seeking to leverage AI to rebuild and streamline their lending operations, following the dramatic impact of the pandemic.

Juniper analysts identified that lenders will train their AI algorithms, in order to more accurately assess and mitigate the loan risks that some consumers and business customers may represent. This will enable lenders to build more sustainable lending models, in the wake of unprecedented economic turbulence.

Juniper found that consumer loans are driving overall AI-based lending use cases, and will account for 66 percent of loans by value underwritten by AI in 2025. When AI is combined with services such as Open Banking, it can build a comprehensive picture of financial status and anticipate future risks.

Juniper analysts recommend that consumer and commercial lenders leverage these AI technology capabilities to expand their customer portfolios, post-pandemic, to those without detailed credit files.

"Expanding lending operations into untapped areas of the market is a critical way in which banks can not only increase their own revenue but also compete more effectively with rival fintech services," said George Crabtree, an analyst at Juniper Research.

Outlook for Robo-Advisor Applications Growth

The research also found that robo-advisors, where AI actors manage investments for users, will account for over $3 trillion in assets under management in 2025, from $500 billion in 2020.

According to the Juniper assessment, rather than selling services directly to users, robo-advisor vendors should partner with large banks. This enables robo-advisors to access large groups of potential users who are underserved by current wealth management propositions -- growing revenue while keeping customer acquisition costs low.

Furthermore, I believe that financial services' digital transformation will drive more merger and acquisition activity as the global market leaders accelerate past the legacy institutions that are unable to adapt and embrace new digital growth strategies. That said, the global pandemic creates many new challenges and opportunities for all organizations to reimagine their current business model.

Edge Computing Revenue will Reach $250.6 Billion

If you want to thrive and prosper, then encouraging 'remote work' must be part of your organization's digital transformation agenda and knowledge worker culture. Each individual 'branch of one' person must be supported at the edge of an organization's secure network infrastructure.

Edge Computing refers to the facilities and services between centralized enterprise data centers and intelligent endpoints -- either a branch location or more recently an employee home office. Moreover, an endpoint can be a mobile device, such as a smartphone or media tablet. It could also be a sensor.

Proliferating devices benefit from a digitally transformed IT world through cloud edge capabilities. Regardless of how that edge is being defined, the compute, storage and networking cornerstones gird data creation, analysis, and management outside of the centralized core.

Edge Computing Market Development

A future scenario is unfolding where extraordinary value and opportunity for essential IT products and services from a myriad of technology ecosystem stakeholders are being created and marketed.

According to the latest global market study by International Data Corporation (IDC), the worldwide edge computing market will reach $250.6 billion in 2024 with a compound annual growth rate (CAGR) of 12.5 percent over the 2019–2024 forecast period.

"Edge products and services are powering the next wave of digital transformation," said Dave McCarthy, research director at IDC. "With the ability to place infrastructure and applications close to where data is generated and consumed, organizations of all types are looking to edge technology as a method of improving business agility and creating new customer experiences."

The marketplace of vendors and service providers that are present and investing in edge computing continues to grow and increasingly includes a diverse set of competitors.

Familiar companies in the hyperscale cloud computing space include Amazon Web Services (AWS), Equinix, Google, IBM, Microsoft, Oracle, and Switch among others.

Physical IT technology and telecommunication platform infrastructure providers include companies such as AMD, Dell Technologies, Ericsson, HPE, and Intel.

Meanwhile, telecom services companies such as AT&T, Lumen, and Verizon deliver critical networking capabilities to connect the thousands of planned and deployed edge data centers.

IDC expects edge computing expenditures will be concentrated in the U.S. and Western Europe markets over the next several years. In 2020, the global regional spending shares for the Americas, EMEA, and Asia-Pacific will be 45 percent, 27.9 percent, and 27.2 percent, respectively.

From an industry perspective, 11 of the 19 standard industry segments will deliver 5 percent or more of total worldwide spending in 2020. The top two industries for edge spending throughout the forecast period are discrete manufacturing and professional services, while retail will overtake process manufacturing to become the third-largest industry by the end of the forecast.

Professional services will also see the fastest growth in edge computing related investment with a five-year CAGR of 15.4 percent.

From a technology perspective, services (including professional and provisioned services) will account for 46.2 percent of all edge spending in 2024. Hardware follows as the second largest technology category with a 32.2 percent share of spending, while the remaining 21.6 percent will go to edge-related software.

Why Edge Computing is Transformational

"While no technology market has been spared from the economic impact of COVID-19, edge market suppliers are poised to experience sustained growth throughout the forecast from enterprise and service provider investments," said Marcus Torchia, research director at IDC.

I believe that new modes of IT application delivery will become the norm. In particular, the "Everything-as-a-Service" model will create a level of abstraction where the 'on-premises platform versus public cloud service' debate is not the focal point of savvy decision-makers -- in particular, those senior executives that lead enterprise 'digital growth' projects.

Furthermore, envisioning a consumption-based pricing and on-demand application delivery modality will transcend the legacy mindset of the old-guard players that are unable to evolve. Besides, the ability to hire and retain skilled talent will be the defining factor that enables a vendor to surpass the competition.

That said, the few leading vendors that choose to undergo a metamorphosis will act with a bold sense of purpose. In contrast, the majority will likely attempt a change management course of action via small incremental adjustments to their current status quo.

Offering the freedom to scale IT resources so enterprise customers can quickly react to changes in the app development and app delivery environment is important. However, credible vendor ambassadors that can articulate a compelling solution and associated business outcomes are the greater imperative.

Growth for 5G Indoor Wireless Cellular Networking Apps

The success of Wi-Fi 6 isn't a foregone conclusion. There's growing interest among CIOs and CTOs in strategic applications for fifth-generation (5G) network deployment with unlicensed and shared spectrum in both the consumer and the enterprise Wireless Local Area Network (WLAN) markets. 

Distributed Antenna Systems (DASs) have become a vital component for in-building wireless cellular communication coverage, especially in the U.S. and Asian markets. However, many legacy DASs are facing challenges incorporating 5G and increasing the overall capacity of the systems.

To overcome these challenges, many Mobile Network Operators (MNOs) are starting to transition from traditional in-building DASs to 5G-Ready digital Distributed Radio Systems (DRS) due to technical and financial aspects and a smooth transition to 5G networks.

Wireless Infrastructure Market Development

According to the latest worldwide market study by ABI Research, worldwide revenue for DASs will grow approx. 2.7 times -- from $5,072.9 million in 2019 to $13.7 billion by 2025. Similarly, the consumer and enterprise small cells will generate revenue growth of 2.6 times from $975 million in 2029 to $2.6 billion by 2025.

"With the advent of 5G indoors, flexible solutions with advanced features and capabilities like DRS have gained greater participation in the market. These solutions change the way traditional DASs are designed and implemented due to their simplified and future-proofed architecture," said Johanna Alvarado, senior analyst at ABI Research.

The market opportunity for DRSs will grow in the following years, during which the solution is going to be adopted to address 5G upgrades for legacy DASs, as an overlaid 5G systems, but also as the main indoor wireless solution for all venue sizes.

According to the ABI assessment, DRSs will be largely adopted to address various wireless applications in the consumer and enterprise WLAN markets.

MNOs have started to deploy 5G indoors targeting high-density venues such as sports stadiums and live music venues. For example, Deutsche Telekom in Germany deployed 5G in Munich's Allianz Arena. Similarly, Verizon and AT&T in the United States are adding 5G networks to sporting facilities and entertainment venues.

Many of these upgrades involve new DAS network infrastructure covering the 5G frequency range.

"There are mainly two strategies adopted by MNOs to deploy 5G in venues with existing legacy DASs. These strategies are mainly spectrum re-farming and overlaid 5G systems. These techniques will be largely adopted by MNOs to boost 5G coverage in venues of all sizes where there are existing legacy DASs. DRSs will mainly be the overlaid architecture chosen by MNOs, because DRSs effectively deploy more advanced features without significant cost," adds Alvarado.

Outlook for Digital Distributed Radio Applications Growth

In addition, in order to cope with the pace of the technology changes in the mobile telecommunication industry, 42 percent of the interviewed vendors have merged or acquired new companies in a span of seven years.

"It is clear that the DAS market is consolidating with vendors diversifying its product portfolios, and entering new markets by acquiring new companies," concludes Alvarado.

That said, I believe that Wi-Fi network congestion issues have prompted many organizations to seek alternatives. The millions of Wi-Fi routers and access points in use today -- competing for spectrum on a limited number of unlicensed channels -- have demonstrated the need for new solutions to the growing demand for wireless connectivity.

Communication Services Dominate Global IT Spending

Most enterprise CIOs and other information technology (IT) executives have the support of their organization's forward-looking board of directors. However, given the current global economy, IT cost optimization is a hot topic at executive briefings about the CFO's budget allocations.

Worldwide IT spending is forecast to total $3.8 trillion in 2021 -- that's an increase of 4 percent over 2020. Meanwhile, IT spending during 2020 is now expected to total $3.6 trillion -- that's down 5.4 percent from 2019 levels, according to the latest market study by Gartner.

"In the 25 years that Gartner has been forecasting IT spending, never has there been a market with this much volatility," said John-David Lovelock, vice president at Gartner. "While there have been unique stressors imposed on all industries as the ongoing pandemic unfolds, the enterprises that were already more digital going into the crisis are doing better and will continue to thrive going into 2021."

Digital Transformation Market Development

On the upside, enterprise software is expected to have the strongest rebound in 2021 (7.2 percent) due to the acceleration of digitalization efforts by enterprises supporting a remote workforce, delivering virtual services such as distance learning or telehealth, and leveraging hyper-automation to ensure pandemic-driven demands are met.

Spending on data center systems will experience the second-highest growth of 5.2 percent in 2021 as cloud computing hyperscalers accelerate global data center build-out and other organizations resume data center expansion plans and allow staff to be physically back onsite.

Despite the increase in cloud services activity in 2020 as organizations shifted to a remote-work-first environment, enterprise cloud computing spending -- which falls into multiple categories -- will not be reflected in IT vendor revenue until 2021.

"The spending slowdown that took place from roughly April through August of this year, coupled with cloud service provider's 'try before you buy' programs, is shifting cloud revenue out of 2020," said Mr. Lovelock.

According to the Gartner assessment, public cloud services had a proof point this year -- it worked throughout the pandemic, it scaled up and it scaled down. This proof point will allow for an accelerated penetration of cloud computing through 2022.

"With revenue uncertainty promoting cash from being King to being Emperor, CIOs are now prioritizing IT projects where the time to value is lowest," said Mr. Lovelock.

Companies have more IT to do and less money to do it, so they are pulling money out of the areas they can afford, such as mobile phone and printer refreshes, which is why there will be less growth in the devices and communication services segments.

Instead, CIOs that are able to realign IT budgets are spending more in areas that will accelerate their digital business transformation, such as public cloud Infrastructure-as-a-Service (IaaS) or customer relationship management (CRM) software.

Outlook for Global IT Cost Optimization
 
Moving forward, Gartner analysts say digital transformation will not be subject to the same ROI justification it was pre-pandemic, as the mandate for some IT organizations becomes business survival, rather than digital growth.

That said, communication services still dominate global enterprise IT spending (estimated at $1,332,795 million in total for 2020). Most multinational companies are under contract for legacy wide-area network services that consume the majority of their monthly expense for telecommunication links.

In the coming months, I believe that more CIOs and CTOs will assess the alternatives to aging MPLS network offerings, and seek proven ways to re-architect their WAN in the quest for lower-cost and improved performance for end-users.

Furthermore, typical savings gained from SD-WAN adoption has significantly benefited numerous organizations across the globe. These IT budget savings have been re-invested in much needed digital transformation projects. Under this scenario, a CEO's bold digital growth goals can be fully realized.

Industrial IoT Software Revenue will Reach $216 Billion

The applications for the Internet of Things (IoT) technologies has gained new momentum within industrial sectors. With a focus on machine-to-machine (M2M) communication and machine learning, Industrial IoT enables CIOs and CTOs to improve the efficiency and reliability of key operations.

The primary sectors served by Industrial IoT solutions include agriculture, energy and utilities, logistics, manufacturing, mining, plus petrochemical oil and gas. Leaders within the Industrial IoT ecosystem must ensure that they implement the most applicable connectivity technologies for each application scenario.

These IoT solutions can utilize various available wireless networking technology standards -- such as Wi-Fi, LoRa, Zigbee, Bluetooth, or 5G cellular -- which demonstrates the potential for fragmentation.

That said, each of these network types has specific characteristics optimized for different industrial use cases, which can create significant challenges while integrating different communication protocols.

Industrial IoT Market Development

According to the latest worldwide market study by Juniper Research, the global number of Industrial IoT sensor connections will increase from 17.7 billion in 2020 to 36.8 billion in 2025 -- that's representing an overall growth rate of 107 percent.

The research identified smart manufacturing as a key growth sector of the Industrial IoT market over the next five years -- accounting for 22 billion sensor connections by 2025.

The new market study findings predict that 5G and Low Power Wide Area (LPWA) networks will play pivotal roles in creating attractive service offerings for the manufacturing industry.

These new offerings will enable the realization of the 'smart factory' concept, in which real-time data transmission and high connection densities allow autonomous operations for manufacturers.

The Juniper analyst identified private 5G services as crucial to maximizing the value of a smart factory to service users, by leveraging the technology to enable superior levels of autonomy amongst operations.

They found that private 5G networks will prove most valuable when used for the transmission of large amounts of data in environments with a high density of network connections, and where significant levels of data are generated.

According to the Juniper assessment, this application of private 5G network technologies will enable large-scale manufacturers to reduce their operational spend through greater efficiency gains.

Juniper Research now forecasts that over 80 percent of global Industrial IoT market value will be attributable to an investment in software by 2025 -- reaching $216 billion.

Outlook for Industrial IoT Applications Growth

Artificial intelligence (AI) software tools leveraging machine learning for enhanced data analysis, and the identification of network vulnerabilities, are now essential to connected manufacturing operations.

"Manufacturers must exercise caution when implementing IoT technology; resisting the temptation to introduce connectivity to all aspects of operations. Instead, manufacturers must focus on the collection of data on the most valuable areas to drive efficiency gains," said Scarlett Woodford, research analyst at Juniper Research.

I believe that further wireless communication network technology advances, and the ongoing adoption of artificial intelligence, will continue to fuel new application growth for smart factory use cases. Moreover, sensor data storage requirements may drive demand for more cloud edge computing solutions.

The Exponential Growth of Mobile and Remote Working

It's inevitable, the Chief Human Resource Officer (CHRO) and Chief Information Officer (CIO) must now work together more closely to deliver the progressive employment policies, flexible business processes, and adaptable IT platforms that enable the work-from-anywhere economy.

The American mobile worker population will grow over the next four years, increasing from 78.5 million in 2020 to 93.5 million mobile workers in 2024, according to the latest market study by International Data Corporation (IDC).

By the end of the forecast period, IDC expects mobile workers will account for nearly 60 percent of the total U.S. workforce.

"COVID-19's disruption of the U.S. labor force has had a dramatic impact on how large businesses operate and will continue to shape how and where people work in the months to come," said Bryan Bassett, senior research analyst at IDC.

Mobile Worker Market Development

The ability to quickly mobilize different segments of a company's workforce with capable and secure mobile solutions has never been more important, and U.S. organizations are signaling that investment in mobile-based management and security solutions will take precedence in 2020 and beyond.

IDC defines mobile workers as workers who are enabled with mobile devices (e.g. smartphones or tablets) by their company to complete their assigned tasks and workflows. The mobile worker population is segmented into two core categories: information mobile workers and frontline mobile workers.

• Information Mobile Worker: A knowledge or office worker who typically works from a single location, has dedicated computing resources, and tends to create, transform, and distribute data and/or content using productivity and enterprise applications. Examples include programmers, business analysts, marketing specialists, researchers, billing clerks, lawyers, accountants. This category of mobile worker includes those who may also be physically mobile during their workday, including mobile professionals, occasionally mobile workers, and mobile non-travelers.
• Frontline Mobile Worker: A worker who performs client-facing or operational activities on-site or in the field that requires distributed mobile access to data, content, applications, and workflows. Examples include store associate, nurse, lab technician, construction worker, field service worker, and hospitality worker. The two primary types of mobile frontline workers are mobile field workers and mobile on-location workers.

Frontline workers currently make up the majority of workers in the United States, accounting for 57 percent of the total U.S. worker population. However, in 2020, only 49 percent of frontline workers are currently enabled with mobile devices, compared with 55 percent of information workers.

And the number of frontline workers in the U.S. will see little growth over the next several years as the industries that rely most on these workers -- accommodation and food service, government, retail, healthcare, and construction -- recover from the impact of the global COVID-19 pandemic.

Meanwhile, the number of information workers is expected to see accelerated growth over the next 12-18 months, largely because this segment has been much less susceptible to the immediate effects of the pandemic.

The number of information mobile workers will also grow due to an expansion in remote and work-from-home (WFH) workers in the wake of COVID-19. IDC defines this sub-category as workers who are typically an information worker and works at a home office during normal business hours.

The threshold for remote and work-from-home workers is three or more days per week, although some remote workers may spend no time in traditional offices -- in effect, they are working from home full time.

According to the IDC assessment, the remote and work-from-home sub-category is crucial because working from home will be much more prevalent in the future.

Outlook for Mobile and Remote Networking Growth 

A recent IDC survey found that 87 percent of U.S. enterprises expect their employees to continue working from home three or more days per week once mandatory closures are lifted, and 90 percent of enterprises think it is likely more of their workers will work from home in the future.

"To meet the needs of more mobile, remote, and work-from-home workers, U.S. enterprises have indicated that mobile security and mobile management solutions will be top spending priorities going forward to keep both information and frontline workers productive and secure in decentralized working environments," added Bassett.

I believe the typical approach to securing remote network access via VPNs is now inadequate. Network performance, manageability and security are of paramount importance. Therefore, sub-optimal wide-area networking solutions will be superseded by new technology. SD-WAN and Secure Access Service Edge (SASE) solutions will deliver superior Distributed Workforce Apps to more mobile and remote employees.

Upside Opportunities for Private Cellular Network Apps

In the past, most CIOs and CTOs would consider Wi-Fi infrastructure as the primary mode of delivering wireless local area network connectivity to their organization. Now, the development of fifth-generation (5G) cellular technologies has created alternative modes of wireless networking.

Moreover, the demand for private networks in the enterprise domain continues to rise. According to the latest worldwide market study by ABI Research, private cellular network deployments within the enterprise domain will generate equipment revenues of more than $64 billion by 2030.

While very large enterprises will likely drive the market for the next 10 years -- accounting for 50 percent of private networks by 2030 -- companies with annual revenues between $250 million and $1 billion will account for 40 percent of private networks by 2030, with their proportion expected to rise further beyond the forecast period.

Private Cellular Network Market Development

"These numbers underline the huge momentum that we see for private cellular networks as a key enabler for enterprise digitization," said Leo Gergs, research analyst at ABI Research. "As enterprises require highly customized deployment solutions, including deterministic & time-sensitive networking and are governed by strict regulations regarding data protection and network integrity, the deployment of a private cellular network will be their first choice."

While large manufacturers like Bosch, Mercedes, or Siemens certainly have the financial resources and the necessary expertise to manage and operate a cellular network on their own, typical enterprises with annual revenues below $1 billion do not have the resources nor capabilities.

Following a recent ABI Research survey among industrial manufacturers across key markets in Europe, North America, and the Asia-Pacific region, three out of five manufacturers would prefer their private network to be managed and operated by a third party.

To address this potential managed services revenue opportunity within mid-tier enterprises, the telecom service provider industry needs to develop appealing offerings that take into account the business realities of these less capable IT organizations.

Since many enterprises with revenues of up to $1 billion face some form of IT budgetary constraints, large upfront capital investments into wireless network deployment would serve as a true barrier to entry.

According to the ABI analyst assessment, in order to lower this barrier and promote enterprise cellular network deployments, the telco industry needs to rely less on traditional CAPEX intensive business models and instead develop OPEX-based wireless local area network (WLAN) offerings.

These new offerings will adopt a service-based approach to give the decision-makers some assurance of paying only for services they truly need. As a result, communication service providers must be prepared to grasp a unique upside growth opportunity for private cellular services within the enterprise domain.

Outlook for WLAN Applications and Growth

The need for the telco industry to adapt is underlined by a drastic change in the shape of the competitive landscape. The traditional mobile network operators are under attack. On the one hand, the dominant cloud hyperscalers are actively developing disruptive end-to-end solutions for enterprise connectivity.

"On the other hand, we see more and more specialized network operators like Ambra, Citymesh, and Edzcom, which reserve spectrum assets to provide private cellular for enterprises as a service-based offering. Considering this, network operators need to evolve their business models fast, to protect their slice of the cake from being eaten by anyone else," concludes Gergs.

Looking ahead, I anticipate that more business and IT leaders will seek ways to deploy ultra-reliable, high-speed, low-latency, power-efficient, and high-density wireless connectivity solutions for their organization. Furthermore, unlike a public 5G mobile communication network, each private 5G network will be customized for the unique attributes of the location and associated WLAN requirements.

That said, Wi-Fi networks are easier to deploy and relatively inexpensive compared to private cellular networks, making them more attractive where speed and economy are a higher priority. Private Wi-Fi networks are already utilized for numerous applications and use cases. Plus, wireless routers and access points that support new Wi-Fi standards, such as Wi-Fi 6, will offer many enhancements over prior technologies.

Why More Board of Directors Invest in Digital Business

While many organizations are concerned about cash flow and other financial metrics, given the current economic environment, the most forward-looking leaders plan further investments in strategic Digital Transformation projects. 

Sixty-nine percent of enterprise boards of directors (BoDs) accelerated their digital business initiatives in the wake of the COVID-19 pandemic disruption, according to the latest market study by Gartner. Almost half anticipate changing their organizations’ traditional business model as a result of the pandemic.

The '2021 Gartner Board of Directors Survey' was aimed to understand how boards of directors view digital business model evolution in their enterprises, along with the role of the CIO and other executive leaders, specifically in the context of responding to the current economic crisis.

Digital Business Market Development

"BoDs play a strong role in helping the executive leadership team focus beyond the short-term risks associated with this extended pandemic," said Partha Iyengar, vice president at Gartner. "Technology-driven digital transformation can, and should be, a strong enabler in addressing employee, customer, supply chain and broad brand impact to position the enterprise to come out of the crisis stronger."

The majority of BoDs (67 percent) expect budgetary increases in information technology (IT) as a result of the pandemic, while functional areas such as marketing and HR are expected to experience some budgetary cuts.

BoD survey respondents expect a nearly 7 percent increase in their IT budgets. "The long-term ask of BoDs during COVID-19 is to approve forward-looking investments even in the face of potentially plummeting revenue and profits," said Mr. Iyengar.

Big data analytics and artificial intelligence (AI) are expected to emerge stronger as game-changer technologies as a result of the pandemic, as enterprises lean on them to drive better decision making in the new remote-work-first environment.

According to the Gartner assessment, digital technology initiatives will serve as the top strategic business priority for enterprise BoDs over the next two years, followed by customer engagement and managing the remote workforce.

Eighty-six percent of respondents deem business technology as having a transformational role in addressing strategic priorities, which is why many organizations are expected to create a new 'Chief Digital Officer' role to respond to COVID-19 in the near-term and drive digital growth in the long-term.

"BoDs must take innovative approaches to their governance models by leveraging technologies and IT expertise to accommodate the impacts that the pandemic is thrusting upon their digital transformation agendas," said Mr. Iyengar.

Almost all enterprise BoDs expect functional leaders to collaborate with one another during COVID-19. More than half believe that CIOs serve as partners with senior business leaders, while over a third look to the CIO to lead digital business issues alone.

Outlook for Digital Business Innovation Investment

Longer-term renewal is an important focus area for the Board, with 28 percent of survey respondents focusing on the 'Renew' phase of The Reset. Executive management is less focused on renewal (18 percent) and more focused on the 'Respond' phase, with just under half reporting it being their core focus area.

"CIOs and the rest of the executive management team should engage with the BoD on creating a longer-term strategy for revival -- and even survival -- post-crisis," concluded Mr. Iyengar.

In summary, I believe that IT 'cost optimization' is a proven way to regain budget funds by re-engineering sub-optimal enterprise communication services that are based upon high-cost networking technology -- such as outdated MPLS infrastructure.

The adoption of SD-WAN solutions can cut those OPEX costs by half and free-up funds to be applied to more strategic IT priorities. Moreover, this transition will significantly increase bandwidth to branch locations and typically improve the end-user experience in a meaningful way.

And, savvy CIOs and CTOs are already working with IT vendors to help them develop a compelling business case that enables this essential transition. It's the first key step in the planning process, before issuing incremental new IT budget requests.