Today's manufacturing industry faces unprecedented pressures: consumer demands evolve faster than ever, global competition grows fiercer by the day, and the need for operational efficiency and agility has become critical. Legacy infrastructures and traditional network deployments are increasingly falling short in meeting these complex demands – especially as factories transition toward Industry 4.0 with smart logistics, predictive maintenance, robotics and augmented reality-driven processes.
Against this backdrop, private 5G networks promise revolutionary improvements – but their deployment often entails daunting timelines and substantial complexity. Today, the rise of hyperscalers like AWS, Microsoft Azure and Google Cloud is changing the game, enabling manufacturers to implement sophisticated 5G infrastructures in hours or days instead of months.
This accelerated pace of transformation doesn’t just streamline operations – it creates a significant competitive edge in a world where adaptability isn't just advantageous, it's essential for survival.
Here we will explore how rapid deployment is achievable, how spectrum allocation plays a role and how a collaborative ecosystem involving hyperscalers, mobile network operators (MNOs) and system integrators (SIs) can fully unlock the potential of private 5G in manufacturing environments.
Understanding Private 5G Spectrum: Why It Matters
Spectrum allocation is a process by which a regulatory body for telecommunication networks within a country assigns a specific range of frequencies to an entity for exclusive use. This means no other entity except the one assigned is legally authorized to use it. Any encroachment on the allocated frequency by any other entity can result in financial or other repercussions. Spectrum allocation is crucial for the success of private 5G networks, as it serves as the critical piece without which there is no wireless network.
Spectrum determines the coverage, bandwidth and speed of the network. The frequency band allocation of a private 5G network determines its performance and capabilities. Until now, enterprises have operated in the lower frequency bands because these bands provide wider coverage. But wider coverage means the capacity for data transmission is lower. Due to this dynamic, it is difficult to monitor the usage of the frequencies in the higher band range. This results in situations in which some usable frequencies may not be adequately licensed for 5G deployment.
In the legacy mobile wireless market, spectrum is allocated primarily to MNOs, making them the dominant players. In today’s mobile wireless market with 5G technology, allocation of spectrum licenses is up in the air; it is no longer a forgone conclusion who receives the spectrum allocation.
In this new paradigm, some countries assign 5G spectrum licenses to MNOs, while in others, enterprises can acquire spectrum allocations to build and manage their own private 5G networks. In the U.S., it may be a matter of who is first to use the unlicensed frequency in the Citizens Broadband Radio Service (CBRS), which is a 150 MHz band of spectrum in the 3.5 GHz range.
The choice of whether to allocate 5G spectrum licenses to MNOs or not is a complex and highly debated issue that needs to be carefully evaluated depending on the situation and geography. If you are a global company, for example, and you want to build a 5G network in Germany, you can acquire a spectrum license. But you cannot acquire a license in Belgium because only MNOs have them. In China, likewise, only MNOs have licenses.
If you don't have a spectrum license, it is illogical to own 5G equipment, which then restricts the type of companies with which you can do business. However, it is important to note that this does not mean that enterprises can’t deploy private 5G networks that provide the same or even better performance.
For further information on the pros and cons of spectrum allocation options, see our recent article How the Allocation of Private Mobile Wireless 5G Spectrum Impacts Enterprises.
Navigating the Evolving Private 5G Mobile Wireless Market
Today’s mobile wireless ecosystem involves MNOs, SIs, hyperscalers and equipment vendors that are busy redefining themselves to thrive in the new private 5G paradigm. New service and technology providers – mostly SIs and hyperscaler platform providers – are competing with traditional MNOs. This competition creates some interesting dynamics and opportunities for SIs, MNOs and hyperscalers alike.
SIs have extensive experience and expertise building and managing complex technology systems. Compared to MNOs, SIs are more flexible and can customize solutions to meet the specific needs of their clients. If 5G spectrum in the mid-band and millimeter-wave band ranges are given to enterprises instead of MNOs, SIs would be competitive for the following reasons:
Expertise in network integration: SIs have extensive expertise in network integration, which is essential for building and managing private 5G networks for manufacturing industries. They can leverage their experience in integrating different technologies and systems to design and deploy customized solutions that meet the specific industry.
End-to-end services: SIs can offer end-to-end services including design, implementation and maintenance of private 5G networks. This means industries can rely on a single vendor for all their needs rather than having to work with multiple vendors, which can be complex and time-consuming.
Agility and innovation: SIs are often more agile and innovative than MNOs. They can leverage their experience in different industries and technologies to bring new ideas and solutions to the table. This can lead to faster innovation and deployment of new services and applications on private 5G networks.
Lower cost: SIs may be able to offer private 5G network solutions at a lower cost than MNOs since they are more flexible and can customize solutions to meet the specific needs of their clients. They may be able to avoid unnecessary expenses and optimize the use of resources.
Manufacturers may choose to consider an SI if they receive the allocation for a 5G spectrum in the mid-band and millimeter-wave band range. An SI can offer expertise in network integration, customization and flexibility, end-to-end service, agility and innovation at extremely competitive prices. While this approach may seem tailored to take away much-needed business from MNOs, MNOs can remain competitive by redefining themselves and leveraging their strengths to meet the changing needs of the market.
For recommendations about how to take advantage of opportunities in the private 5G marketplace, see our article How Enterprises Can Navigate the Evolving Private 5G Mobile Wireless Market.
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How Hyperscalers Are Revolutionizing Private 5G Networks
Profound changes are happening in manufacturing with the adoption of private 5G networks. It is no longer just about connectivity but the reshaping of entire manufacturing ecosystems with the fusion of digital technologies and physical processes. The role of hyperscalers cannot be overstated. Their immense computing power and infrastructure will be central to the rapid adoption of 5G.
The shift from traditional mobile network deployment to cloud-based deployment is a game-changer for private 5G networks. Underlying this fact is the service-based architecture (SBA) of 5G, which provides a modular, flexible and scalable framework for delivering advanced connectivity and computing capabilities. This architecture is particularly well-suited for industrial environments, where reliability, low latency and high bandwidth are critical. The service-based architecture of 5G, combined with the capabilities of hyperscalers, will reshape manufacturing ecosystems.
Traditional networks rely on monolithic architectures, where each function is tightly coupled with specific hardware. This limits flexibility and makes it difficult to adapt to changing requirements. 5G’s SBA is inherently modular and cloud-native, making it ideal for cloud deployment. Each network function (e.g., authentication and session management) can be deployed as a microservice, enabling dynamic scaling and optimization.
Hyperscalers, such as AWS, Microsoft Azure and Google Cloud, bring unparalleled compute power, storage and network infrastructure to the 5G ecosystem. Their global data centers and edge computing capabilities can enable manufacturers to deploy private 5G networks with ease while ensuring minimal latency and maximum reliability. With the hyperscalers’ edge compute offerings, manufacturers will be able to process data closer to the source (e.g., on the factory floor), reduce latency and enable real-time decision-making for critical applications like robotics, autonomous vehicles and quality control systems.
Scalability and elasticity are very important considerations when planning your private 5G deployments. Cloud deployments can reduce the time it takes to deploy the various features of 5G from months to days – or possibly even hours. And almost all relevant features can now be virtualized and accessible on the cloud marketplace.
The cloud infrastructure offered by hyperscalers allows enterprises to scale their private 5G networks dynamically based on demand. Manufacturers can choose to deploy minimal functionalities based on requirements and do not have to integrate functionalities they do not need. This elasticity enables manufacturers to scale their private 5G networks dynamically on demand. Compute and network resources can be allocated instantly, ensuring seamless integration and uninterrupted operations.
The globally distributed infrastructure that hyperscalers offer can enable global manufacturers with multiple facilities to deploy consistent private 5G networks across geographies. This ensures interoperability and standardization, which are crucial for global manufacturers with sites around the world.
Additionally, hyperscalers provide a collaborative ecosystem on a single platform that allows multiple stakeholders – manufacturers plus their equipment providers, software developers, service integrators and network operators – to collaborate for flexible deployment and operations. For example, a manufacturer can collaborate with different 5G core and RAN providers as well as robotics providers and software developers on a hyperscaler platform to create a customized solution for automated assembly lines. This platform acts as a hub for innovation, reducing time-to-market for new solutions while creating a synergy for continual process improvements and rapid use case development.
The 5G SBA also provides standardized APIs and interfaces that make it easier for different systems and devices to communicate. Hyperscalers may enhance this by offering platforms to orchestrate and manage these APIs and enabling seamless integration of IoT devices, AI/ML models and enterprise applications. Specific tools can greatly simplify the management of the 5G infrastructure, including multiple vendors, from configuration to application deployment, all within a single interface.
In addition, the 5G SBA and hyperscaler platforms address security and compliance challenges in manufacturing, especially where data breaches or network failures can lead to significant financial and reputational damage. The SBA and platforms employ robust security policies and end-to-end encryption for data in transit, at rest and in use. This ensures that sensitive manufacturing data, such as intellectual property or operational metrics are always protected. Hyperscalers offer compliance frameworks that align with industry standards and can be automatically applied to private 5G deployments, ensuring compliance with minimal effort.
Integration of private 5G networks with hyperscaler platforms also enables manufacturers to harness the full potential of their data, driving operational efficiency and innovation. Hyperscalers provide the analytics tools to process this data instantly, uncovering insights that can optimize production processes. For example, by combining 5G connectivity with AI/ML models hosted on hyperscaler platforms, manufacturers can predict equipment failures before they occur, e.g., vibration data from a machine can be analyzed in real-time to identify signs of wear and tear, proactively schedule maintenance and ensure worker safety.
Getting the Most from Your 5G Investment: CapEx vs. OpEx
When it comes to finances, manufacturers find that deploying 5G allows for better cost optimization than traditional deployments. Traditional deployments require significant upfront capital expenditure (CapEx) for hardware, spectrum licenses and infrastructure, which can lead to long payback periods, especially for small and medium-sized manufacturers.
Cloud-based deployments follow an operational expenditure (OpEx) model, in which manufacturers pay for resources on a subscription basis. This reduces upfront costs and improves ROI by enabling faster deployment and scalability. For example, a manufacturer can start with a small private 5G network and scale up as needed, paying only for what they use.
Upgrading traditional networks often requires physical interventions, such as replacing hardware or manually installing software updates. This can lead to downtime and increased operational costs. Cloud-based networks enable seamless software upgrades and feature integration. Hyperscalers provide automated tools for deploying updates and new features, so manufacturers have reliable access to the latest capabilities without disrupting operations.
Some hyperscaler 5G-focused services allow manufacturers to roll out new features across their network through pay-as-you-go models provided on a subscription basis. This eliminates the need for large upfront investments in hardware and infrastructure. Furthermore, the centralized management and automation tools provided by hyperscalers reduce the need for specialized IT staff to manage the network. The scalability of cloud resources ensures that manufacturers do not over-provision capacity, which further reduces costs.
The SBA of 5G combined with the flexible compute and network infrastructure will revolutionize manufacturing by enabling a new era of connectivity, collaboration and innovation. From real-time data analytics to dynamic cost optimization, these technologies are reshaping the manufacturing ecosystem, making it more agile, efficient and secure.
As private 5G networks continue to evolve, their integration with hyperscaler platforms will play a central role in driving the next wave of industrial transformation.
How Hyperscalers Leverage Ecosystem Players to Serve Manufacturers
The deployment of private 5G networks in manufacturing is not a solo endeavor—it requires collaboration among multiple ecosystem players. Hyperscalers, as key enablers, work closely with equipment vendors, SIs and or MNOs to deliver end-to-end solutions.
How are these partnerships formed? And how do hyperscalers leverage each player to provide efficient services to manufacturers?
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Equipment Vendors:
Equipment vendors such as Ericsson, Nokia and Huawei provide the physical infrastructure (e.g., radios, antennas and base stations) required for 5G networks. Hyperscalers collaborate with these vendors to ensure their cloud platforms are optimized for 5G hardware. For example, AWS partners with Ericsson to integrate its cloud services with Ericsson’s 5G infrastructure, enabling seamless deployment of private networks in manufacturing facilities.
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MNOs:
MNOs bring expertise in network deployment, spectrum management and regulatory compliance. Hyperscalers partner with MNOs to offer private 5G-as-a-service solutions. For instance, Microsoft Azure collaborates with AT&T to provide private 5G networks for industrial clients, combining Azure’s cloud capabilities with AT&T’s network expertise.
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Service/System Integrators:
SIs such as Accenture, Capgemini, Wipro and Tech Mahindra play a crucial role in customizing and deploying private 5G solutions for specific manufacturing use cases. Hyperscalers work with these integrators to ensure their platforms are tailored to meet the unique needs of manufacturers. For example, Google Cloud partners with SIs to develop turnkey solutions for smart factories, integrating 5G connectivity with AI/ML analytics.
Hyperscalers act as the glue that binds the ecosystem together, offering platforms that integrate hardware, software and services. For example, AWS Outposts enables manufacturers to deploy pre-configured 5G infrastructure on-premises, while leveraging AWS’s cloud services for data analytics and AI.
Hyperscalers may also collaborate with equipment vendors and MNOs/SIs to accelerate the development of new use cases. For instance, Microsoft Azure’s partnership with Nokia has led to the creation of industrial IoT solutions that combine 5G connectivity with edge computing for real-time machine monitoring.
And the tools provided by hyperscalers simplify the management of private 5G networks, reducing the burden on manufacturers. For example, Google Anthos allows manufacturers to manage their 5G networks and cloud applications from a single interface, regardless of the underlying infrastructure. This saves time and money that would otherwise go to acquiring the necessary in-house tools.
Challenges Manufacturers Face in Private 5G Deployment and How Advisory Firms Can Help
Enterprises venturing into private 5G deployment often face challenges in sourcing, contracting and operational readiness. Consultancy firms such as ISG play a critical role in addressing these challenges and building robust ecosystems.
Challenges include:
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Lacking the sourcing expertise to identify the right mix of hardware, software and services for your private 5G network to prevent solutions that fail to meet operational requirements.
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Suboptimal contracts for 5G with hyperscalers, SIs, MNOs, vendors and service providers that fail to specify roles, responsibilities and service-level agreements (SLAs), especially around scalability, security and compliance.
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Lacking operational readiness processes and testing that ensures your private 5G network is ready for deployment, including network testing, performance benchmarking and user training.
Partnering with ISG: Navigating 5G Deployment with Confidence
Navigating the landscape of network solution providers can be daunting for manufacturing companies. ISG Network Advisory alleviates this challenge by providing in-depth insights into the vast array of network service providers, technology vendors and system integrators. We recognize that each manufacturing company is unique, with distinct requirements and challenges, and we work closely with enterprises to understand their specific needs so we can design customized solutions that address their unique pain points.
Whether it is enhancing factory automation, enabling internet of things (IoT) connectivity, improving supply chain visibility or leveraging advanced analytics, ISG expertise helps manufacturing enterprises identify and evaluate potential partners that align with their specific needs and objectives. By leveraging our network of trusted relationships, ISG enables companies to make informed decisions while selecting partners for sourcing 5G and other network solutions.
ISG Network Advisory understands that successful network transformation begins with comprehensive market research. By leveraging our industry insights and extensive network expertise, ISG delivers valuable intelligence on the latest trends, emerging technologies and best practices when it comes to networks. Manufacturing companies and enterprises across other industries can leverage this research to gain a holistic understanding of the benefits, challenges, and opportunities associated with deploying 5G and other network technologies specific to their industry.
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