June 27, 2018

Verizon Venture Forum: Exploring the Future of 5G

Last month, executives from across Verizon, entrepreneurs, VCs, and corporate peers came together for our semi-annual Verizon Venture Forum. The topic for this Venture Forum was “The Future of 5G Infrastructure & Applications”, which sparked dialogue about key trends and innovation across Cloud and Edge Computing, Containers, Fixed Wireless Technologies, AR/VR, Gaming, Drones, Smart Cities and Transportation, among other topics. Below are some key takeaways from the event:

Why we are excited about 5G

It would be hard to ignore the buzz around 5G coming out of the telecom industry these days. We at Verizon Ventures believe that 5G will be unlike any other wireless network that has come before it. Sanyogita Shamsunder, Verizon’s Vice President of 5G Ecosystems & Innovation, said during her morning presentation that 5G will be a fundamentally different network with vastly different attributes, such as running on a different frequency, having a different technological architecture, and requiring denser deployment. These differences yield several key benefits - chief among them is significantly higher bandwidth/throughput (up to 10-100x more) and much lower latency (as much as 10x less).

From an approach standpoint, 5G is also very different. Every generation of wireless up until this point started with heavy amounts of R&D. With 5G, Verizon started working with partners (startups, universities, and corporates) very early on to test system and network requirements, making the strategy and execution for 5G very different right out of the gate. We showcased a few 5G use cases at our recently launched New York City incubator, Alley, alongside a few of our startup and university partners.  

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5G will enable many new applications with unique value propositions  

As the conversation shifted from the benefits of 5G to potential use cases and applications, Toby Redshaw, Verizon’s Senior Vice President of 5G Ecosystems, Innovation & Product Development, said he believes that artificial intelligence, Internet of Things, AR/VR, and cloud computing are about to “hockey stick” despite already having shown strong growth to date. That growth combined with 5G will fuel major disruption, leading to what is referred to as the fourth industrial era or industry 4.0. As such, we will see more technological change in the next three years than we have in the last ten, which should make for great venture investing opportunities.

During a panel discussion containing most of our corporate 5G ecosystem partners, executives chatted about the different value propositions of 5G and how marketing efforts will need to be different for industrial vs. consumer applications. Because the benefits of 5G are so plentiful, one panelist suggested that we’ll need different marketing efforts for the various industrial sub-segments, as the vast variety of applications in that arena alone will generate different needs (i.e., smart factory vs. public safety/emergency response). With that comment, the discussion pivoted to the importance of network slicing, which gives operators the ability to establish virtual networks with distinct attributes for specific customers, a characteristic that is not readily available with existing wireless networks.

Deploying 5G-enabled cloud/edge infrastructure will unleash a wealth of capabilities

Later in the day, we embarked on a conversation about the importance and evolution of cloud and edge infrastructure in a 5G-enabled world with executives from a major cloud computing company, a co-creation venture studio, and an edge intelligence startup. Over the course of the discussion, a few points stood out:

  • Security – It will be paramount to have services that ensure the billions of new connected devices are secured from the device to the cloud, and back to the enterprise.

  • Establishing a common control plane – It is important to ensure that customers have the ability to properly manage and monitor communications in the cloud from service to service, cloud to mobile edge, and edge to device.

  • Virtual applications – Effectively moving containerized software to the edge and then down to the devices, while allowing ubiquitous movement back and forth, will be an important feature of cloud.

  • Rethinking the flow of data – It was asserted that the conventional thinking around the flow of data works well for consumer IoT solutions, i.e. starting from the cloud and moving to the mobile edge. For industrial IoT in a 5G world, one of the speakers suggested it should be the opposite – i.e. starting from the “true” edge and moving back to the cloud. The reason argued was that customers should be able to immediately perform analytics on live data, while only sending back relevant decisions and actions back to the cloud to create a system of record.

5G will bring technological advantages for AR/VR

The discussion transitioned into 5G applications in AR/VR with a panel comprised of three guests from leading industry startups: an enterprise AR platform, a drone-based AR platform focused on first response situations, and a provider of location-based, fully-immersive VR experiences. The panelists believed 5G could help their businesses in six distinct ways:

  1. Better AR video experiences due to increased bandwidth and much lower latency;

  1. Increased coverage for field technicians in remote areas;

  1. The presence of edge technology as it allows headsets to offload compute, making them lighter and more comfortable for people that need to work with their hands out in the field;

  1. Increased location accuracy when dealing with first response situations;

  1. Lower computer/hardware expenditures from an enterprise AR and fully-immersive VR perspective; and

  1. Improved consumer fully-immersive VR experiences by freeing users of computer backpacks, which saves time and allows for increased customer throughput. Arguably, the removal of computer backpacks also broadens the customer demographic from a physically standpoint.

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5G benefits for smart cities & transportation

We also had a panel discussion regarding 5G applications in a smart city and transportation setting, which spanned a variety of topics including the recent autonomous vehicle accident in Arizona and the Federal Aviation Administration’s willingness to embrace innovation. What we found most illuminating were the attributes these entrepreneurs were most looking forward to with 5G.

One panelist representing an aerial data platform was excited about the ability to get tremendous amounts of data that sit at the edge (via drones) as fast as possible. For example, being able to process large amounts of data from the edge after a hurricane hits in order to assess how much damage has been done to a particular house or entire region would be a huge advantage for insurance companies and homeowners alike. Having that information readily available would allow insurance providers to deliver a check to the homeowner (end user) in as little as a few days, which could expedite the rebuild process by as much as six months to a year after hiring contractors. Another panelist and operator of a self-driving microtransit service desired increased network reliability as it’s very important for passenger safety.

The third panelist, a developer of an automotive teleoperations systems, craved increased network stability. He noted that today’s 4G networks deliver latency that oscillates anywhere between 30ms all the way up to 250ms, depending on the time of day and how many people were on the network. With 5G, he would be fine with the 4G-like latency, such as 100ms, so long as it was ultra-stable. Such preferences make network slicing an important feature in a 5G world.

Will 5G help carriers regain their former mobile gaming distribution prominence?

The Venture Forum’s closing keynote speaker was the CEO of a mobile game developer, who discussed carriers’ historic role in gaming and future trends. He reminded us that 15-20 years ago, the only way to play mobile games on a basic phone was by paying $5 to download them from the carriers’ app store. Since that time, carriers have ceded that dominant position to Apple and Google’s app stores. With 5G, he believes that carriers have the potential to become a dominant game distributer once again. During his talk, three things stood out:  

  1. The gaming industry, in particular mobile games, is large and growing. According to NewZoo, gaming industry revenues are well over $100 billion, topping the movie and music industry combined. Mobile games specifically account for ~$50 billion and represent by far the fastest growing segment (~23% y-o-y).

  1. Gamers care very much about network performance and would be willing to pay for attributes associated with 5G, such as increased bandwidth, lower latency, and near-zero packet loss. A high-quality network would allow players to have an enhanced experience and, in a tournament setting, having the best network can play a big role when competing for millions of dollars in prize pools.

  1. Unfortunately, it has actually become an art to develop games that can handle the constraints of network and device compute, memory, speed, etc. With 5G development and cloud computing innovation, game developers will not be bound by the content on users’ devices but allowed to dynamically generate new content. Unleashing developers’ full creative potential, combined with enhanced consumer experience, could allow carriers like Verizon to regain a foothold as a games distributor.

We hope you enjoyed reading some of the tidbits from our most recent Venture Forum. “5G” has become a household buzzword for faster speeds, but the underlying technology has the power to disrupt and enable many industries. On that note, we would like to thank all speakers and attendees for joining us and we look forward to continuing the dialogue. A special thanks to Zeev Klein and the rest of the Landmark Ventures team for helping us produce yet another successful Venture Forum.

Tags: Alden Mahabir , Cloud , Venture Forum , Transportation , Smart Cities , drones , AI , 5G , AR/VR