In the coming weeks, I will provide my perspective on the obstacles hindering the success of 5G and offer some ideas for altering the current trajectory. However, before delving into that, it is essential to reflect on lessons from the past.
From my viewpoint, the challenges faced by 5G (and 6G) are closely tied to the issues we either neglected or failed to comprehend during the optical networking boom. In the early 2000s, we witnessed incredible technological advancements to enhance capacity, reduce latency, and steer traffic within all-optical networks. The Dotcom bubble fueled the impetus behind these advancements. Despite the bubble bursting in 2000, we continued pouring investments into technology without fully comprehending its long-term financial implications or understanding how it would be fully utilized. We were trapped in the “build it, and they will come” mindset. However, the consequences were severe and swift. The optical networking world endured a harsh lesson (one I experienced) as the customer base and supply chain crumbled. The momentum built within the supply chain could not be halted quickly enough, resulting in substantial job losses and financial losses. To illustrate the turmoil, I recall receiving notice that a customer had canceled all its orders because it discovered $250 million worth of equipment sitting idle in its warehouse. The investment cycle in research and development, operations, and support was too lengthy, and the fall arrived far too abruptly.
During the early to mid-2000s, as a Silicon Valley company CEO, I vividly recall hearing John Chambers of Cisco discussing “business outcomes.” It struck me that although this concept seemed simple (albeit somewhat detached from my operations), it was the fundamental metric driving demand for our creations. At the time, some colleagues told me it was easy for Cisco to discuss outcomes since they were closer to the end customers. However, we were operating at the tail end, hoping that the other end was being fed (as the saying goes, hope is not a strategy). The entire purpose of 5G was to enable more outcomes, particularly more valuable outcomes. Hence, I propose that this should be our foremost consideration.
While I do not believe the wireless industry is as susceptible to the boom-and-bust cycle experienced during that time, it is important to recognize that wireless networking is highly consolidated. Investments have not reached the frenzied levels seen in the early 2000s. Nevertheless, if carriers cannot generate positive financial outcomes from our technology, they will hit the brakes, and there are indications that this is already happening.
We have always existed in an outcome-based world, whether we discuss human outcomes, business outcomes, or customer outcomes. When we cease to create these outcomes and instead develop technology for technology’s sake, we encounter the challenge we must confront in 5G and 6G wireless networking. We generate capabilities and performance without a clear, seamless pathway to monetize them through outcomes. Wireless carriers worldwide are beginning to recognize this. Unless the industry exerts greater effort and ingenuity to stimulate these outcomes, we may experience a tightening spending reminiscent of the 2000s.