Podcast: The next era of 5G and cloud

Host: Erik Ekudden, thank you very much for joining me again on this podcast, I really appreciate it.

Erik Ekudden: Thanks for having me.

Host: So, the last time we spoke, it was about your vision for the future of network platforms and what trends you believe are driving change in our industry. Today, I wanted to focus on one of those trends, and that’s the emergence of a universal compute fabric across the network. So to kick us off on this episode, can you just tell us why ongoing digitalization is dependent on these types of capabilities in the network? As well as why some computing power maybe is moving out to the edge of the network?​

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In this podcast, we’re speaking with Ericsson’s Chief Technology Officer, Erik Ekudden, about how 5G and cloud platforms are creating a new ecosystem of opportunities.

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Erik Ekudden: Of course, David. Some computing power is truly moving out to the network edge, but I think it’s really important to note that also some computing power is actually moving in the other direction, moving into the network edge from the smartphones, from the IoT devices, off-load them in terms of having access to more compute in the network, to do things better, or perhaps, with lower energy consumption. Your battery lasts longer, so it really goes both ways. And this is really leveraging this network compute that we are anyway building up in the network infrastructure.

We have looked at this as a transition over the, let’s say, last ten years and the mobile technology and the public clouds together created the app economy, and now with the emergence of much more high-performing networks and that’s where 5G and the edge cloud comes in. We are seeing completely new opportunities. This could be in the area of the industry transformation, the cyber-physical systems, they demand a universal, globally available network compute fabric. That’s, of course, to handle the massive amount of data, and you do it with low latency or extremely low latency, but you also open up for ease of programming and running this operationally across the continuum of execution environments, from the public clouds through the edge clouds to the end devices. This is really where the network compute fabric comes in, and it is offered by the operator to service providers and really play a critical role in enabling new orchestration across these different environments.

You could say that in this computing paradigm, the connectivity is really essential. You bridge the computer wherever it is, and this execution then is adapted to the needs of the application and also the infrastructure at hand. This is really where you leverage the distribution aspects of a mobile infrastructure and the enormous power of more centralized compute. This is really where it comes together as a network compute fabric. And of course, you build in things like robustness, resiliency, security, and memory and storage at any place, any time, any device, and for any application.

Host: And you’ve touched on this a little bit already, but can you tell us what are the foundations of the network compute fabric, and perhaps more specifically, what type of use cases are across different areas of society and industry that the network compute fabric is going to enable?

Erik Ekudden: The enterprises are really eager to start to leverage this. They have traditionally worked very much with the on-premise compute, storage, and local networking, and now they see the need to be part of a global movement which 5G, and of course 4G to some extent before that, is enabling. So, you digitalizing your infrastructure, you digitalizing your business processes and then you make use of this network compute fabric, because you have businesses that are global or because you have mobility as part of your business or, as we all witness now over the last 12 months, that you have to be able to work from any place and enterprises are clearly the early users of this network compute fabric.

But you also see the more advanced cases in industrial automation, where you need closed-loop industrial automation in the control system that they have, could be robotics, you have the extended reality, all of this requires really low latency, for example for haptic feedback and enclosing the loops on the factory floor. What they see is that when taking these applications to global logistics or a chain that is moving outside of the factory floor, you need this network compute fabric to follow the applications. And that’s also a great example of how this needs to come together with one programming environment, independent of where the actual execution goes on.

Equally exciting, I would say, is what we see on the consumer side. So now, the devices are very much next-generation, smartphones, and tablets the things that we are used to see. But in a short while, we will actually start to see many more form factors, be it augmented reality glasses or much smaller, lighter-weight devices that are permeating society and our lives. And that would more than ever require, will be reliant on the network edge, so the network compute fabric because you cannot execute everything in those lightweight, new form factors. So here, this is really about supporting applications in a whole range of areas from the enterprise industry space but, of course, including the consumer space as well.

Host: And that’s a good segue, because I know we’re doing some very interesting things similar to this at our D-15 Innovation Lab in Santa Clara, California. I was wondering if you can tell us a little bit more about that lab and also, you know, maybe some of the edge use cases that we’re testing there.

Erik Ekudden: Sure, David. I think we’ve touched upon D-15 many times before, and it’s really our state-of-the-art innovation center located in Santa Clara, California. This is where we push the boundaries of innovation, and we do it very much together with the ecosystem, working with our partners, be startups or larger partners in the ecosystem or, for that matter, long-term university collaborations. We bring all of that into our innovation labs, and it is really an opportunity for innovators where they can start to collaborate, but they can also make sure that they use the latest technology. This is where we have everything implemented, everything from 4G, 5G, and IoT support, this is where we have the network slice capabilities, this is where we have edge cloud capabilities, all of these things made available and in an open environment so that you can explore putting your application onto the digital infrastructure.

In some of the cases that we have worked on over the last years, they are now becoming very hands-on commercial opportunities, such as in the 5G cloud gaming space. I think the sports area is also really exciting because there’s so much you can do by enhancing the sport experience in stadiums or when people are out and about or at home, so those are really very, very encouraging already now. And this is where I said, as I said before, that resource handling in the network, so the network slices to be able to get higher guarantees on the performance of the connectivity and compute and the storage, and you combine that with a low latency at the edge. This is where this really comes together.

Another example is how we’re working with Magic Leap and their glasses when it comes to augmented reality. This really leverages then all the mobile technologies as well as the technologies that are then built into the AR devices themselves. Optimizing that experience, making sure that it can be commercialized on a global basis is really what we’re doing there.

Host: Already at the beginning when we started talking, you mentioned the developments within this space opening up opportunities for operators, and I’m wondering if we can just take a step back and kind of quantify this for a moment. Do we have any numbers around the edge opportunity and then why do we believe that service providers are in the best position to take advantage of this?

Erik Ekudden: We do have some numbers and we look at this very much from both interviewing the industry, interviewing consumers, we have our consumer and enterprise labs that are doing this work, but we also, of course, work very much hands-on with our partners to seize these opportunities.  But one good example is our latest 5G Consumer Potential Report, the cumulative revenue opportunities for digital consumer services, and if we look at them on their own, it is estimated to be north of USD 130 billion over the next ten years, and that’s a fantastic opportunity for operators. And we already earlier made very clear that by 2030, we see that 5G as a digitalization infrastructure, as a digital platform, could enable some USD 700 billion for operators in terms of industry digitalization. And this is on top of the current mobile broadband business, so this is a fantastic business opportunity for operators.

There is no question that the operator service providers are really well-positioned to take this. The fact that they are offering services with high quality today — that’s a good start. But it also means that the advantage of being able to do this with intelligent traffic routing, traffic management from a network perspective, connecting mobile and cloud, that’s a good point to be in. Then, you could also decide the optimal location for where the applications should run and execute, whether it’s on the device, on the network edge, or in the public cloud, optimizing both cost and performance. Of course, they have a fantastic asset when it comes to operating this distributed digital infrastructure around the world. The the expert knowledge that they have when it comes to building and running networks I think is a great starting point as it combines now with a new user experience at the new devices, and you need to manage them as well end-to-end.

Host: In a recent opinion piece, you wrote recently that there’s there’s going to be three different phases to the edge opportunity for service providers. Can you talk about what these different phases are, and then what we believe service providers can do or already today to address this opportunity?

Erik Ekudden: It is very much about a long-term journey. We are moving towards advanced-edge compute, we’re moving towards a more homogeneous execution environment in the network compute fabric in a number of steps. What we are pointing out is really that it starts already now. Working with the partners in the cloud ecosystem, working with the value propositions that we can already support today. That could be in the enterprise space, that could be in terms of productivity, that could be in terms of working with retailer other cases, where we simply combining the public cloud capability with the networks — that’s a business opportunity here and now. Orchestration is playing a big role in that, and in fact, we have announced some good examples, partnerships and also good commercial offerings in this space to really tie together the applications for the enterprises running in the cloud environments with the networks and orchestrating that end-to-end.

But the second step is really when we can start to enhance performance: robustness, resiliency, resource reservations. We put network slices and the real edge compute into the picture, and this then serves those high-demanding enterprise customers, and those that are seeing that today’s best-effort services would not be good enough to digitalize their whole processes. That’s really an area, where operators have an edge in terms of the network performance. The more long-term step that really relates to what we started to talk about, the fact that we are moving compute and application hosting from the devices into the network edge: the augmented reality, the XR cases that really, today, are still very early examples in the labs and in the pre-commercial demonstrations. But over time, that will be a fantastic opportunity, leveraging again the distribution of networks, but also the high performance and ability to host also those applications from the device on the network edge. That opens up opportunities, as I said, that are great for operators, great for consumers in the end, because this is really where you can provide much superior user experience, and what we witness in today’s more static central-public cloud environments with simple connectivity. So, this is really a multi-step journey, where over the coming 5 to 10 years, we see these opportunities really materializing.

Host: I believe we’re already working with some pioneering service providers to address some of these early-stage opportunities. I was wondering if you can talk about a few of these collaborations maybe in just a bit more detail.

Erik Ekudden: Yes, you’re right. We have had collaborations with many leading operators around the world for many years. I think it comes back to what we do in our labs at D-15, and what we’re doing in the labs in Aachen, for example. But it’s really taking to the next step in some of these collaborations. One example is what we’re doing with Telstra: we are collaborating on the enterprise edge cloud solutions. This is really something that we started back in 2019, but now we’re pioneering this for the financial services sector in Australia.

Another case from Europe, from Germany is really what we’re doing when it comes to provide end-to-end orchestration, as I mentioned before, linking together manufacturing logistics and the automotive companies. This really takes the steps to serve the needs on the factory floor in smart manufacturing, but also in the complete logistics change out and about. So, you really making best use of both the local capabilities as well as the wide-area capabilities — and these are just two leading examples around the world. I expect that we will see many more in the in the coming months and years.

Host: Again, you touched on this before, but I was wondering if you can go into more detail about what happens kind of in the in the later stage of this opportunity? When we see a large-scale computation at the edge of the network kind of more widely available, what does this stage of the opportunity look like for service providers?

Erik Ekudden: We have touched upon it a few times already, David. The fact that we are talking about the new paradigm, moving compute to where it’s best suited, making best use of high-performance networking. But the amount of compute and also memory and storage that we are now building into the network as part of the upgrade to 5G, and what comes beyond 5G — this is really the starting point for leveraging that also for running applications more from the enterprise space and classical IT space. This is really why you could say that this is an evolution of mobile, but it’s also a radical change for enterprises, as they start to consume 5G as a network platform. Again, this comes back very much to the importance to work together between clouds and networks, but also realizing that operators are in a fantastic position to capitalize on these move. This is really where orchestration comes in, as I’ve said several times before. We need to do this end-to-end to be able to guarantee SLAs. This is also very much about digitalizing the business processing, this is about self service, this is about automation, making things AI-based and data-driven from the start. This is something that I think the industry is now very ready to embrace, in fact, commercializing in a partnership model that I think will open up opportunities for all these enterprise applications that are today confined to the local environment. They have started to move to become cloud-based, now, they will be based on both 5G and cloud, and I think that is really the opportunity now.

Host: You talked about orchestration and network slicing, and I’m wondering if you can you can go into more detail about what it is we offer today for this opportunity, and then maybe how we’re investing to make sure service providers can can seize this edge opportunity going forward?

Erik Ekudden: Well, today we offer the network platform, we offer 5G with cloud native, 5G core, the 5G RAN, which is really the high-performance foundation for any of these things. But to your point, we have announced our commercial offerings in 5G network slicing on the core side and on the RAM side. This really opens up for being able to sell SLA-based network services, together with compute and storage in an edge fashion. This is already being commercialized now with leading markets, leading customers, and of course, we see that we can take a strong role in also supporting operators to move into enterprises. That’s where our wireless wide area network solution from Cradlepoint, a company that we acquired recently, comes into play because this is where you can start to link 5G as a primary access to your SMB or to your enterprise. You, then, get high performance end-to-end, you get the capability to serve those existing devices — Wi-Fi based or wired in the in the office or in the in the enterprise — but you also offer the opportunity to be completely wireless. So, again, coming back to 5G being the primary access for many of these businesses, not the least because of what we live through now, when we have accelerated digitalization across enterprises by years. I think this is one example of where we see leading operators really investing in that enterprise opportunity.

Host: Erik Ekudden, thank you very much again for joining on this podcast, it’s always really interesting to hear your views on where our industry is headed.

Erik Ekudden: Thank you, David.

Host: Thanks again to Erik Ekudden. The availability of large-scale computation at the edge of the network, it’s going to transform how enterprises deploy and consume IT. We believe that through the evolution of 5G, service providers are the ones to stand to gain the most. You can read more on this opinion piece on the Ericsson blog, which is available on ericsson.com. Thanks for listening.