Who are enterprises going to call for private networks? The companies they already know! And that is why there will be more private network solution vendor acquisitions
March 8, 2023 | The wireless and mobile ecosystem, from vendors to operators and device OEMs, has driven the major developments in the industry for the last 40 years. The move from analog networks to digital required new switches, base stations and devices. Then came 3G and the introduction of wireless data, when the RIM BlackBerry became almost ubiquitous. The MNOs divested their tower assets and created a whole new industry segment, the tower companies.
4G LTE led to new spectrum, new base stations, new devices and a rapid rise in the amount of data used. Network operators drove consumer penetration with the family rate plan and then unlimited data rate plans. 5G has been driven by the industry to provide lower latency and higher bandwidth networks, utilizing more new spectrum, network upgrades and new devices.
Private networks have been growing the last few years (we have spoken before about the number of case studies in the iGR Private Network Ecosystem Directory) and the signs are that there will be significant growth in the next few years. But the difference today is who is likely to be front-and-center driving private networks into the enterprise - the large IT vendors. Rather than being driven by the MNOs and wireless network OEMs, the big names in private networks today are the big names in enterprise IT.
Case in point: the week before the Barcelona show, Dell announced a partnership with Athonet as part of Dell Private Wireless; the announcement was made with a host of other news and also included Airspan and Expeto as part of a fully integrated solution. Then two days later, HPE announced that it was acquiring Athonet (financial terms undisclosed) to offer a solution for smaller enterprise customers. Needless to say, it seems likely that the Dell-Athonet partnership will not be going forward!
Some of you will be jumping up and down now saying ‘Wait! The MNOs are in the private network space!’ True, the major MNOs have programs under way to offer private networks, either using their own spectrum or CBRS (in the U.S.). But we believe that the MNOs will not drive the private network ecosystem and growth in the coming years, although they will be part of the solution in some cases. And certainly, Ericsson and Nokia offer private network solutions; remember that Ericsson purchased Cradlepoint in the summer of 2020 and Quortus in 2021.
But the names in private networks today also include Dell, HPE, Kyndryl, AWS, Microsoft, HCL, NTT and many others. These are traditional IT names that many IT execs will be familiar with or are buying solutions from today. They have IT relationships and IT experience.
What the IT shops may lack are the finer details of wireless private network expertise and this is where acquisitions will come in. We will see more deals like HPE-Athonet as other IT vendors look to fill out their portfolios. The smaller private network vendors need scale and access to the enterprise customer base, and the IT vendors can provide this. So, expect to see more deals in the next months and years as the private networks market develops. But rather than the traditional wireless vendors doing the acquiring, expect the large IT vendors to make the moves.