First for exclusive news and networking for telecom, media and tech, M&A, financing and investment globally
Frank Rayal – Xona Partners, discusses how Edge Computing is Powering New Business Opportunities
Mobile networks evolve to maximize efficiency of operation providing greater performance per unit price with every successive generation. In parallel, this evolution allowed new applications to thrive which in turn create a further need to improve efficiency. Mobile networks are now full-IP data networks carrying different types of traffic. The demand for mobile data continues to increase at breakneck speed, averaging about 50% year-over-year. Video accounts for 50% of mobile data traffic and is projected to be at 75% by 2022. With revenues flattening, mobile network operator (MNOs), are looking for new applications and services to monetize. IoT and connected cars, virtual reality and robotics are emerging on the scene as potential use cases that will drive new revenues to service providers. But what impact will these applications have on the networks and consequently, what opportunities will this provide to forward looking technology companies?
In this article, I expand on Edge Computing which is a concept that’s necessary to support emerging applications. Edge Computing is not a new concept in mobile networks – early attempts to implement it commercially have failed. However, a combination of technology and market factors make Edge Computing a necessary concept for MNOs, or even third party market entrants who can provide disruptive services.
The Concept and Applications
Edge Computing places compute and storage functions close to the end user at the edge of the network. This improves the response time of applications (reduces latency) and reduces the amount of data traversing the transport network between the core and the edge computing server location. Network virtualization is a catalyst for the implementation of Edge Computing and an enabler for scalable, cost efficient architecture supporting the emerging applications.
The applications that benefit from Edge Computing include those meeting of the following requirements:
Examples of applications that benefit from Edge Computing include:
Edge Computing allows mobile networks to deliver the performance required to enable these applications. For example, some connected-car and smart grids applications require sub 1 msec latency. Massive IoT connectivity has low bit rate but generates high signaling overhead that overloads networks. Virtual reality requires both low latency and data streaming capabilities orders of magnitude more than video. Edge Computing will be necessary to enable these applications.
The Impact and Opportunity
Implementing Edge Computing requires placing compute, storage and networking functions close to the user. It requires decentralizing data centers hosting network functions into a multiple-tier hierarchy. This foretells that interest in smaller-size ‘edge’ data centers would increase. There are already a few initiatives in this direction, such as M-CORD: Mobile Central Office Re-architected as a Data Center. M-CORD is an open source project hosted by the Linux Foundation and On.Lab at Stanford University with participation of AT&T, Verizon, and Google among others. It seeks to disaggregate the wireless network into software functions that run on commercial off-the-shelf hardware. This architecture will leverage central offices which today hold function-specific appliances. In an interesting side note, many service providers consolidated their central offices into fewer locations, some selling abandoned ones in prime urban areas for premium valuations. Nevertheless, future networks will mark a transformation in how central offices are designed and used as service providers retool to monetize emerging applications.
The advent of new applications and requirement for Edge Computing bring additional opportunities. One example is the promise to enable a new class of service providers. The emergence of LTE networks in shared and unlicensed spectrum allows for new service entities to enter the market with dedicated enterprise services. This is a space where traditional consumer-centric MNOs are relatively weak at. Hence, the enterprise service providers complement MNO services in an analogous way to how Mobile Virtual Network Operators (MVNOs) complement MNOs (Figure 1).
Monetizing emerging applications requires MNOs to rethink their network architecture and go-to-market strategy. This leads to new business opportunities for the entire ecosystem. Edge Computing is one concept that is fundamental to meeting the requirements of emerging applications such as IoT, connected cars, and virtual and augmented reality. New technology and market developments enable new services and service models to emerge. These models could be leveraged by the MNOs or complementary entities focused on specific market segments.
Log in or subscribe for our free or premium subscription service.
Not a TMTFinance member yet?
+ 44 (0) 20 3747 4604
+ 44 (0) 20 3747 4602
+ 44 (0) 20 3725 6556
70 Borough High Street
London SE1 1XF