Verizon and AWS Team up on Industrial 5G

Verizon and Amazon Web Services (AWS) announced a strategic partnership around 5G edge networking at Amazon’s annual AWS re:Invent conference in December 2019. In doing so, AWS gets a channel partner and Verizon gets to integrate AWS Wavelength into its 5G Edge platform. Recently unveiled, AWS Wavelength enables developers to build applications that deliver single-digit millisecond latencies to connected assets by deploying AWS compute and storage hardware at the edge of the 5G network. This complements Verizon’s goal to provide endpoint functionality to everything that a customer wants to reach out and touch. But Verizon isn’t the only company with these goals. In addition to traditional competitors (such as AT&T and Sprint), Verizon also faces competition from multinational network infrastructure vendors (Ericsson and Nokia) and now web scale companies (like AWS and Azure), as well as Systems Integrators (SIs). For example, in addition to Verizon (the United States), AWS is collaborating with Vodafone (Europe), KDDI (Japan), and SK Telekom (Korea) for its initial go to market.

Today, only 14% of digital factory connections are wireless, and many of these connections use Wi-Fi. While the benefit of Wi-Fi is compatibility with Ethernet-based automation networks, such as PROFINET or MODBUS, the drawback is that it uses frequencies on the Industrial, Scientific, and Medical (ISM) bands, which are used by one in four industrial devices and are therefore highly susceptible to interference. Devices using the ISM bands also employ “listen before talk”—or “listen before transmit,” as detailed in the ABI Research Application Analysis Report 5G in Industrial Applications (AN-5122)—and, as result, operate with an additional source of inherent latency. Industrial Wi-Fi and proprietary protocols help combat issues of determinism and Time-Sensitive Networking (TSN), but an industry-wide standard is what modern manufacturing really needs to capitalize on the ideals of Industry 4.0.

Private LTE can support 85% of existing automation use cases in industrial manufacturing. However, the fabric of existing operations is what Industry 4.0 seeks to change, and what 5G will undoubtedly provide. For example, private LTE connectivity solutions offer a latency of around 50 ms, which limits the Total Addressable Market (TAM) for mobile control panels (which are increasing in interest) to about 30% of production machines on a typical factory floor due to operating requirements such as the ability to perform an emergency stop (IEC 61355). 5G, by contrast, promises sub-10 ms latencies and will be able to support 100% of mobile control pane applications.

The benefit of network slicing capabilities in private network deployments is that it allows manufacturers to address use cases with completely different network performance requirements using the same physical network infrastructure. On the one end are commodity applications like asset tracking (low bandwidth, latency flexible) and on the other are complex scenarios involving Autonomous Mobile Equipment, such as Autonomous Mobile Robots (AMRs) and  Industrial Mobile Robots (IMRs), which require not only remote control but also the fusion of data from different sensors/sources to navigate and start/stop in an instant (high bandwidth, low latency, high reliability). In the middle is everything from Augmented Reality (AR)-assisted training and product assembly to condition-based monitoring for predictive maintenance.

While the latest 5G announcement from Verizon and AWS speaks to the nearer term possibilities that leverage hybrid/public networks in select markets (e.g., only in Chicago at the time of writing), over time, manufacturers that want to employ 5G at their factories will have four main deployment options:

1. Private: Fully owned and operated by the manufacturer. This can be done today with private LTE and, on a limited basis, 5G (mostly in trials at present). Mobile Network Operators (MNOs) like Verizon have a limited near-term opportunity to play the role of SI as well as, potentially, a Mobile Virtual Network Operators (MVNOs) via CBRS (shared spectrum) and MulteFire (unlicensed spectrum), though this varies widely by region. For example, in Germany, a manufacturer like Siemens can acquire spectrum without the involvement of an MNO. Here, cost is in the vicinity of EUR€1,500 for 10 years of unlimited access for a 60,000 square-meter factory. In the U.S. market, the economics have yet to be determined.
2. Hybrid 1: Shared Radio Access Network (RAN) and local control, starting with the 3rd Generation Partnership Project (3GPP) Release 16 (which will be frozen in March 2020, with large scale deployments expected for 2022). It will take the ecosystem a period of time to provide compatible hardware (chipsets, etc.) following the development of standards.
3. Hybrid 2: Shared RAN and control plane (both in cloud), also in the 2022 to 2023 timeframe with 3GPP Release 16. The benefit of hybrid deployments is that they offload portions of the network management functions to specialists and/or offsite hardware, which reduce operations and infrastructure outlay costs, respectively.
4. Public Slice: A slice of the public network (essentially a virtual network), starting after 2023 with 3GPP Release 17+ (which will be frozen in 2021). This is when and where Small and Medium-sized Enterprises (SMEs)— not just major automakers, highly-automated consumer goods industries, and large-scale factories—will start to see the benefits of 5G at scale. It is also around this time that MNOs could have a more direct role in certain regions. An exception to this is in China, where network slicing is already available.

For manufacturers today, especially those looking to embrace Industry 4.0, that operate with a larger-than-average factory footprint, or deal with high volume, high value, high complexity goods/environments, the most important thing is to get started. It took Verizon and AWS 18 months to ink the Wavelength deal. At the onset, Verizon spent a lot of time and effort going into the market and suggesting what could be done with 5G edge computing. Fast forward to the days surrounding the announcement and you will see a very different conversation, driven by use case, benefits, and business value, rather than new technology.