Industry 4.0 will contribute to a surge in IoT connection additions between 2022 and 2025

TBR expects Industry 4.0 to drive a renaissance in new, commercially viable use cases for the network between 2022 and 2025, which will spur revenue-generation opportunities for communication service providers (CSPs) that deliver the connectivity layer and value-added services to businesses. Industry 4.0 will bolster IoT connection growth for CSPs as they target large contract wins in areas including transportation, smart cities, smart factories and healthcare, which are expected to integrate a massive number of IoT devices to enhance operations.

Private 5G networks will play a pivotal role in advancing Industry 4.0 as these networks will provide the security and precision needed to support mission-critical workloads such as in manufacturing. The current, widespread availability of mid-band spectrum in EMEA and APAC markets will provide CSPs in those regions a time-to-market advantage in deploying private 5G networks as U.S. operators wait for the regulatory clearance of CBRS and C-Band spectrum over the next several years.

Enterprises will turn to private 5G networks due to their enhanced security and reduced latency

TBR believes private cellular networks will be a predominant initial 5G use case as enterprises will increasingly opt for 5G connectivity due to its ultra-low latency and enhanced security. Manufacturing plants will be an ideal environment for private 5G networks as the ultra-low latency and minimal jitter provided by 5G will enable connected devices such as robots and other manufacturing equipment to more effectively meet production quotas on the assembly line.

TBR’s Telecom IoT Market Landscape, takes a deep dive into the commercial cellular IoT-related initiatives of global stakeholders in the telecom market, including telecom operators, cable operators and vendors that supply the telecom market. The research includes key findings, market size, regional summaries, technology trends, use cases, verticals, operator and vendor positioning and strategies, acquisition and alliance strategies, and opportunities that are specific to the telecom industry.

TBR perspective

Red Hat emphasized that its culture and approach to product development will not change with its acquisition by IBM. Red Hat underscored that it operates independently and continues to stress an open-source approach to management, application development and the strategic direction of the company. The open-source community, to which Red Hat and its employees are major contributors, will remain the primary influence on Red Hat’s product road map.

This is evident in the company’s open hybrid cloud strategy, whereby Red Hat products support hybrid cloud infrastructure from a host of strategic partners, with Red Hat adhering to a principle of partner agnosticism: No one partner is favored over another. Tellingly, during one executive’s presentation, a slide showcased six large customers that Red Hat supported in their migrations to hybrid cloud infrastructures, and the executive could not name the cloud service provider partner. It did not matter, because Red Hat integrates with them all.

This approach will serve Red Hat well as it continues to penetrate the telecom market. Red Hat’s long-standing open-source principles are finally gaining traction among telecom operators and their suppliers as networks become software-defined and virtualized. Operators are increasingly demanding open and interoperable solutions from their vendor partners, and Red Hat is top of mind in procuring these solutions. Rakuten, which is building the first greenfield, cloud-native, virtualized network, is leveraging Red Hat Enterprise Linux, Red Hat OpenStack Platform and Red Hat Ceph Storage. TBR expects incumbent operators to emulate Rakuten’s procurement and architecture once the concept is proved. 

Red Hat hosted several dozen industry analysts at its Open Innovation Lab and Executive Briefing Center in Boston. Red Hat executives, including its chief marketing and technology officers, delivered insights on Red Hat’s market position and opportunity as the company carefully manages its integration with IBM (NYSE: IBM), which acquired the open-source company in July. Several products were highlighted — namely OpenShift and Ansible Automation Platform — and a Red Hat travel pricing data customer delved into how Red Hat is enabling its IT transformation, all of which drove home the idea that Red Hat encourages, supports and shepherds adoption of open hybrid cloud.

8 clients with 8 stories and plenty of common themes

Setting the tone for the day, India Advisory Leader, Deepankar Sanwalka explained that the event would be about discussion and about clients and the work PwC is doing with them, with four successive breakout sessions in the morning and four more in the afternoon. The clients — almost all India-based companies or government agencies — spanned the industry spectrum from pharmaceutical to software to manufacturing to municipal authorities. In addition to the common themes that emerged across the day, described below, TBR noted that every client had prepared for the standard analyst question, “Why did you choose PwC?” Notably, half of the clients used a competitive process to select PwC as a vendor, a high percentage in TBR’s experience. Clients said they worked with PwC because the firm:

• Shared the client’s cultural value for trust and commitment to strict adherence to compliance, even across global operations
• Understood the client’s customer. Beyond understanding clients’ business, operations and industry, along with the specifics of the India market, one client said PwC demonstrated a deep understanding of the client’s specific target audience and the personas shopping for this client’s specific product. As part of the engagement, and an element the client said was critical to its success, PwC colocated with the client a core team made up of more than 60% strategy, design and marketing consultants, with the remaining professionals handling technology.
• Possessed “skills, scale and speed.” While other clients cited the first two as PwC strengths, this client explained that “speed” referred to PwC’s ability to keep pace with the client’s accustomed pace of innovation, experimentation, adoption and change.
• Understood the client’s business with such depth and clarity that PwC could recommend what SAP customizations the client did not need. In TBR’s experience, every consultancy professes to know its clients well. In this case, the client explicitly understood that the long-term benefits from a massive SAP upgrade depended on minimal customizations in order to facilitate easier maintenance and upgrades. Surprisingly, the client went further in saying PwC was able to force the issue around standardizations by making compelling arguments that the client’s needs did not justify the diminished long-term value of customizations — compelling because PwC so fully understood the client’s business.

Also notable was the very presence of eight clients telling their stories — impressive for a one-day analyst event. TBR observed many of the clients attended breakout sessions with other clients, likely providing the firm with further opportunities to increase its footprint. Finally, the clients all told compelling stories, perhaps because the event was adamantly free of PowerPoint presentations (zero slides in 8 hours). Without slides as a crutch, clients (and PwC professionals and analysts) more easily adapted to the friends-and-family feel of the entire event.

With an atmosphere designed for relaxing and sharing stories, PwC’s Analyst Day in India captured the firm’s current position as a global consultancy with intense local client relationships, a well-defined set of offerings across the entire digital transformation landscape, and a solid, sustained, evolutionary framework in BXT (Business-eXperience-Technology). PwC gathered roughly 30 analysts, from Europe, Asia, India, and one from the U.S., for a dinner and then a day of client stories, PwC briefings and informal discussions in the firm’s Gurgaon Experience Center (EC), which was configured for the event to resemble a house, complete with a living room, dining room, garden, play room and kitchen (plus a library, but how many houses today have libraries?). The playful design of this ‘house’ idea was more than just design alone, with a real emphasis on PwC inviting clients and analysts in for the day to discuss, exchange and spend time together, much as one would do at home with friends and family. Over the course of the day, TBR met with PwC clients from across India and with the firm’s global leaders for Clients and Markets and Technology Consulting, as well as PwC partners and professionals responsible for client accounts in India, Japan and the Middle East.

The variety of organizations involved in quantum computing demonstrates the vast reach this technology will have once commercialized at scale

At Quantum.Tech, attendees heard from a diverse group of speakers from established companies directly involved in the quantum computing space, such as IBM (NYSE: IBM) and Microsoft (Nasdaq: MSFT), as well as startups, such as Zapata Computing and IQM Quantum Computers. In addition to encouraging great minds to work together, Quantum.Tech did an excellent job of demonstrating the sheer magnitude of reach that quantum technologies will have once unleashed. There were speakers from multiple government agencies, both within and outside of the U.S., as well as from healthcare, banking, venture capital, telecom and security companies. These organizations have a vast reach and are also just a small representation of the sheer volume of industries quantum technologies will impact. Time and time again, these speakers noted that the commercialization of a fault-tolerant quantum computer is expected to be achieved within the next 10 years, indicating that economic advantage is on our doorstep and that large-scale quantum adoption is just around the corner.

Quantum sensing will change human activity and has changed centuries-old standards definitions

Atomic clocks, quantum sensors and lidar (light detection and ranging) were several of the small-scale quantum technologies discussed, in addition to the general-purpose quantum computing, networking and security aspects of mainstream computing use cases. Quantum-enabled lidar appears reminiscent of early radar technology first brought to market during World War II and the great-great-grandparent to current GPS technology. Quantum-enabled lidar will be adopted traditionally, being put to use for military applications first, then moving to commercial aircraft and ultimately over to automobiles, drones and other modes of human transportation.

During a discussion at Quantum.Tech, RSK, a civil engineering firm in the U.K., indicated it already uses quantum sensing technology for site assessments. These mid-six-figure devices pay for themselves in six months to a year, and in at least one situation, the $10,000 to $15,000 fee for service enabled the client to gain information that previously would have entailed risking $5 million for a project to uncover. Later in the talk, the device was also shown being towed behind an automobile mapping the ground below the road. In this fashion, municipalities can pinpoint areas where water or sewer lines are leaking, for example.

Quantum.Tech spanned two days with three discrete presentation tracks for over 400 attendees. There was a smattering of references to existing commercial products amid discussions about persistent challenges being researched around the globe. Academics, government agencies, technology companies, venture capitalists (VCs) and enterprise businesses had their turns to discuss the challenges and anticipated benefits of quantum computing. The general tenor of the event was one of tempered optimism. Advancements continue, challenges persist, and the pace of scientific breakthroughs can be uneven. Concerns were expressed about over-hyping the technology while working on real scientific obstacles taking months, if not years, to solve. Hyping the expected pace of discovery could trigger a “quantum winter,” with VCs pulling back necessary funding for long-term developments as hype leads to unrealistic expectations of rapidly tangible results.

EY’s approach to managed services is a boardroom rather than operational discussion  

While the nuances around the definition of managed services vary across vendors and buyers, the common theme of supporting organizational functions resonates with all. As a result, there is a fair amount of confusion and sometimes little-to-no differentiation among suppliers that are simply trying to expand client mindshare. While the advent of AI, cognitive and similar technologies, along with the firm’s desire to participate in the “as a Service” space, has fueled EY’s efforts to build its information systems management capabilities, the firm’s position in the managed services space is largely determined by its role as a trusted tax partner. While buyers have engaged with EY for years around its tax expertise, outsourcing and/or in some cases co-sourcing, tax technology and tax operations are somewhat newer areas of opportunity for the firm. Delivered through EY’s Tax and Finance Operate framework, the firm’s relationship with the CFO buyer allows it to capture strategic tax activities typically managed by in-house tax professionals including financial crime, tax policy administration and cyber, among others.

EY has seen its fair share of success in the space, most recently signing a long-term managed services agreement with Nokia (NYSE: NOK), which followed a similar deal with a global insurance provider back in 2018 for managing tax and compliance. As part of the Nokia deal, EY will provide tax, finance, data and technology managed services supporting the mobile provider across 127 countries, leveraging EY Global Tax Platform and global delivery centers.

Adding technology to a business framework, as EY did with the inclusion of Microsoft Azure in the EY Global Tax Platform, and platformizing micro-processes to support corporate applications, including corporate income tax, provisioning and value-added tax, is one way EY’s Managed Services practice is trying to bridge the gap between tax services and IT, which can then drive other opportunities, including in advisory services. As digital permeates all services and the regulatory environment across the globe continues to evolve, EY’s investments position it to carve a niche applicable to its strengths rather than building one inorganically, similar to rivals that have been investing heavily in areas such as marketing operations to better appeal to the CMO buyer.