AWS Wavelength: game over for telco edge?

We’ve been helping telcos work out how best to play in edge computing for a while.  

Essentially telcos’ choices for network edge / MEC infrastructure are: 

  • Build their own edge (with partners and vendors) alongside the same edge site facilities as planned for new-virtualised network infrastructure , e.g. nextgen central offices and mini datacentres  
  • Partner with a public cloud provider such as AWS, Google or Azure, inviting them to host their servers in telco network (there are various technical sub-flavours of this) 
  • Not bother with network edge at all (that could still mean getting into customer premises edge and/or distributed cloud/hosting) 

In the last week, Amazon Web Services (AWS) has announced Wavelength and Outposts – its version of the partnership option.  AWS has launched this with Verizon (US), Vodafone (Europe), SK Telecom (South Korea), and KDDI (Japan).  

Its press release associates the offering with the promise of low latency 5G applications. In this context, the associations with SKT and Verizon make particular sense, as Korea is the most advanced 5G market right now, and Verizon is a major 5G cheerleader in the massive US market. 

It’s interesting that one of the applications featured at launch is Varjo Technologies, a Finnish VR/AR developer. Varjo says it believes the AWS Wavelength approach will allow it to take processing off headsets and into the servers at edge, making them lighter, cheaper and thereby massively increasing demand and usage. It can’t do that with traditional cloud as the delays experienced by users are too great for it to be usable. People start feeling queasy with VR when latencies are too slow. 

Another developer, Mapbox, runs real-time machine learning to fine-tune online mapping applications. By having the process at the edge, it believes it can deliver a better customer experience and proposition. 

AWS says the benefit of using Wavelength is that users don’t have to deal with multiple telcos, making implementations much easier and more convenient for developers, who are also comfortable being able to use the AWS environment and tools. 

Partnering makes sense for the operators as there are significant challenges in attempting to pursue edge through the first option (going it alone).  

  • First, scale. Telcos don’t operate at the scale of the cloud players. While scale might be argued to be less of an issue in edge, which by its nature is less of a business of centralised economies of scale, the cloud players are looking at edge computing globally (and so are their customers, the developers). 
  • Second, coverage. As discussed above, application providerwant to be able to address all their customers (ideally across all networks). This means that some form of aggregation will be required anyway. 
  • Third, skills. Telcos skills aren’t as deep as the cloud players in developing platforms and scaling these.

Yet, telcos would like to be stronger in serving enterprise and business ICT in general. Many telcos already have a cloud business where they resell public cloud, offer their own private cloud, plus managed services and support on top. In addition, the industry sees B2B services as key for future (5G) growth. Hence, telcos are rightly interested in bringing unique distributed cloud offerings to market. 

So does that mean it’s game over for more purist telco edge approaches? 

The reality is that not every customer will want to use 100% AWS services. Some may, but many will need to run applications in Microsoft, Google and other environments. 

There are always trade-offs between having a totally open business ecosystem, where you can find all flavours of supplier and solution, and the ‘one throat to choke’ approach where one main supplier or partner is used to simplify management and accountability and reduce risks in delivery. 

These trade-offs mean that diversity is essential in the longer term, because should one or two suppliers come to dominate, the rest of the ecosystem is at risk from being exploited by that dominance. 

Telcos’ opportunity is to help customers weave these many different configurations and options together, as they do already today.  

Dalia Adib (Edge Computing Practice Lead) says “The partnerships of AWS with Verizon and Vodafone are likely to set a precedent for the industry. It will be very interesting to see what Azure and Google start announcing as a result, with Azure already linking up with AT&T. 

The game isn’t over for telcos: it’s just got a strong new play. 

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