Everyone in any market has to play the game, so to speak. The operative words “play” and “game”, though, have to relate strongly to each other. You can’t run out onto a baseball diamond with a helmet and shoulder pads, expecting to block and tackle. As simple as this lesson may be, there are signs that a lot of tech hasn’t learned it. Enterprises are frustrated, vendors are frustrated, and even the media/analyst community is frustrated. So why is it happening, and what does it mean for some key technologies in the future?
Let’s start with a Light Reading piece on 5G. The sense is that the big US wireless operators have reached or beaten their early estimates on coverage, which has been how they’ve touted 5G progress, and now the question is what new claims will be offered to replace the old. To me, this is not just a dumb question, it’s a question that raises the “what game are you playing” point.
Over the last three months, almost every enterprise who commented on 5G said that it didn’t figure in their planning for 2024. Not only that, well over three-quarters said that it didn’t figure in 2023 either, and over half of the enterprises who did consider 5G in 2023 plans said they didn’t find anything in their evaluation that argued for 5G-specific steps. Where I got personal comments from the enterprise planners on their own 5G experience, they were equally negative. Thus, you’d have to wonder why mobile operators would even care to release new “targets” that they could “blow past”. It turns out, according to planners inside those very operators, that there are probably two reasons. Wall Street and the media.
5G was a big budget item for a full decade, even though the money wasn’t really spent until about 2019. In fact, it was the only budgeted network enhancement on the table for that full decade, and here’s where the “wrong game” issue got started. Operators wanted to justify the spending, so they created or at least encouraged the tech media to push all manner of stories relating to the massive changes that 5G would bring about. We made 5G about new service revenues for operators, new equipment revenues for vendors, and new capabilities for users. None of that was realistic.
There is no indication that 5G is creating any significant new revenue for operators, because there’s no cadre of service users who found anything incrementally valuable to justify spending more for. Yes, 5G did create a temporary boom in revenue for vendors, but despite the open-model 5G interest, the truth is that the players who won the 5G deals were pretty much the same players as had been winning in 4G LTE. All this is bad, but worse is that having played this wrong game for 5G, all the players involved ended up being stuck with the same game for 6G. Of 182 enterprises with 6G comments over the last six months, 155 said that 6G was over-hyped, that it would not deliver any significantly different services, and would therefore not really change network planning for buyers. Same, in short, as we see now for 5G.
It may well be the same problem for AI. We are engaged in the same sort of hype there that lured everyone into a “revolutionary future” game for 5G. OK, sure, AI hallucinates. OK, thoughtful experts are asking just how anyone will actually make money on it. OK, it might destroy the human race, but if it generates good ink and justifies clicks along the way, well, nobody lives forever.
One thing we can learn from this is that hype rarely leads markets in the right direction. I think most technologists would agree that’s true for at least All Things Technical. What we should be learning is that the technology that shows up preparing to tackle the pitcher rather than swing a bat, having prepared for the wrong game, has almost certainly foreclosed effective participation in the right one.
We didn’t just create unrealistic 5G expectations, we created 5G to justify those unrealistic expectations, and we’re doing that with 6G and with AI too. Suppose that 5G plans that evolved under the 3GPP had actually been aimed at creating credible new services. Suppose there had been a study to determine what people and enterprises would actually pay more for. Suppose 5G features had targeted those things, and delivered on the targets. What would our 5G world look like now? The right game was available then, but once everyone suits up with helmets and shoulder pads, it’s a lost cause.
A few enterprises said they “hoped” that 6G would produce truly useful, valuable, features. None said they were confident it would, and you could count the number who even believed that was possible on one hand. Only 14 enterprises of my group said they were even trying to follow 6G progress; the rest were generally of the view that nothing useful was going on, and well over two thirds thought the whole 6G exercise was likely unworthy of enterprise attention.
I’d hope by now you see the connection of this and the development of AI. Over the last six months, I’ve seen a major shift in enterprise attitudes on AI, and a major shift even in Wall Street’s attitude. Generative AI transformed the image of AI, but it’s not really transformed enterprise experiences. OpenAI was the hottest AI source six months ago, and in January 2024 enterprises picked IBM more often as the key AI player. Why? Because IBM presents AI as an extension of analytics, which is what CxOs think is the best application. It’s not that they might not use it to draft ad copy or even perhaps marketing collateral, but that’s not a transformational mission to them, and not one they’d be willing to pay a lot for.
Wall Street apparently discovered IBM’s AI strength with their highly positive quarterly earnings report, and it’s getting a lot more love there now, but some financial analysts and publications are still saying that IBM deserves more love than it’s getting. The Street loves hype and a bubble just as much as the tech media does, but the difference is that every quarter the financial reports ground Street hype in a dose of reality. Might we be seeing signs that the AI hype is also fading, and that we’re now going to see a more realistic assessment of the technology spread out even to the press and analyst community?
The interesting thing here is that AI may be settling into a state of sanity already, where we dealt with 5G hype for almost a decade. 6G seems to have been dismissed already. What’s responsible? I think it’s a combination of another dimension of cynicism, the “cry wolf” problem, and the fact that AI avoided a major trap, one I referenced in a blog on Monday—standards.
Standards take forever, and while their interminable efforts grind along, those who participate and those who cover tech are eventually drawn into talking about the process, and in particular the goal. We then have the awkward combination of enormous effort involved and a lack of constraining reality to play with. No wonder things go off the rails. With AI, we didn’t have that. Reality started to impact AI almost as soon as AI impacted the markets.
Of course, we can point to the frankly suppressing role standards plays in things like telecom. We can also cite the fact that telecom is based on a large installed base of long-lived assets, making anything innovative much more difficult to deploy. But every industry is responsible for dealing with its own financial and evolutionary forces. Telecom has to do better, and to do that, it has to finally start playing the right game, the game of tapping real opportunity and not assuming it will fall into its lap.
