Enterprise Edge Computing and 5G Network Synergies

The global pandemic has created many ongoing challenges for IT vendors and public cloud computing service providers. That said, there are also numerous opportunities for compelling new technology use cases and associated digital transformation solutions.

Cloud computing and secure storage platforms should be as close to the source of customer data as possible. That’s why ‘edge computing’ is gaining market momentum with fifth-generation (5G) wireless communications, which form a symbiotic association for infrastructure evolution.

Edge computing will drive new revenue growth in the telecom sector. Revenue from cloud-edge artificial intelligence (AI) chipset sales will grow from $2.6 billion in 2020 to $12 billion in 2025, at a compound annual growth rate (CAGR) of 36 percent, according to the latest worldwide market study by ABI Research.

Edge Computing and 5G Market Development

The synthesis of cloud-edge and 5G presents an opportunity for communications service providers to provide complete end-to-end solutions for large enterprise vertical industry applications.

For example, with their robust network connectivity and 5G assets, AT&T, Telefonica, Verizon, and Vodafone could move up the enterprise value chain to the service enablement layer for IoT, analytics, and other horizontal capabilities.

At present, there is no perfect business model for cloud-edge deployments. A key strategy for vendors like MobiledgeX, Ericsson, and Nokia is to target their products at the circumstances in which enterprises find themselves, rather than to enterprises themselves.

In other words, the critical unit of analysis must be existing operations and associated commercial circumstances, not the customer. There is a mass of enterprise requirements that must be satisfied with cloud-edge implementations that do not fit the ‘one-size-fits-all’ profile.

The ability to deploy edge-clouds across dispersed sites and supply chains in a uniform fashion is bound to be the defining feature to accelerate edge-cloud diffusion. This is particularly significant in a post-COVID-19 world where local compute, 5G, and fiber will continue to be the foundation for continued innovation and value creation.

According to the ABI assessment, as telecom service providers look more closely at current market dynamics for cloud-edge opportunities, the key is to understand where it stands in terms of existing assets and complementary control points.

Moreover, the market for cloud-edge deployments promises growth, but it is composed of a plethora of players and technologies which must be intimately understood. The vendor competition to create a superior partner ecosystem is likely to be fierce.

At present, the vendors don’t have all the answers but should realize the choke points in the near term to obtain growth in the long run. For example, telecom providers need a sense of the industries they currently serve and what additional opportunity falls within the boundary of cloud-edge apps.

Outlook for Edge Computing and 5G Applications Growth

Lastly, hyperscale cloud service providers, such as Amazon, Microsoft and Google, are taking advantage of their lean operations to launch compelling cloud-edge offerings. They have the vision to build capabilities close to the edge, but they do not necessarily have the distribution capabilities.

“Clearly, there is an opportunity to be addressed by somebody, but the jury is still out on who captures what parts of the emerging cloud-edge and 5G ecosystem,” Alusha concludes.

I believe that major public cloud service providers will continue to pursue the immediate upside opportunities, such as unified communications and collaboration services, where demand is currently the greatest. Then, as they uncover additional mainstream market use cases, they will apply edge computing solutions to further disrupt the legacy on-premises IT vendors.

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