How Much Revenue Will the Network Slicing Services Market Generate?

Network slicing is perhaps the most-distinctive new 5G capability not based on speed or latency improvements. As always, touted use cases exist, but also can be functionally supported other ways. The basic trade off, as usual, is that local computing power is a functional substitute for communications-based remote computing. 

In other words, one can invest in capital to support local computing or communications to reach remote computing resources, in each case trading connectivity cost for computing resources, or vice versa. 

source: Ericsoon

In that sense, private 5G networks and edge computing can often be functional substitutes for a network slice. 

A recent report by Ericsson and Arthur D. Little, Network slicing: A go-to-market guide to capture the high revenue potential, estimates there is a global opportunity for network slicing services of about $200 billion in 2030. 

The obvious caveat is that the realized market might be smaller if the desired solution--optimized performance--also can be met using edge computing or private networks or both. 

Network slicing allows enterprises or network operators to create virtual private wide area networks that optimize performance: bandwidth, latency, reliability or availability, for example. But local and private networks, plus edge computing, are functional substitutes for a network slice. 

source: Ericsson, A.D. Little 

In a remote computing scenario, availability is the percent of time the resources actually are online. So the key performance indicator is “down time” as a percent of total time. 

Reliability is the percent of time the expected performance metrics are met. Reliability is the feature service level agreements are designed to address. 

source: bmc 

Though one might argue network slices are designed to address reliability more than availability--guaranteed levels of performance more than “better downtime performance”--redundant local computing resources also can provide those same advantages. 

A private 5G network with edge computing can supply the required bandwidth performance, plus the lower latency of computed response, compared to a network slice that improves either WAN bandwidth or latency or both. 

So we shall see.