Edge network APIs: the key to a stickier edge proposition?

Network APIs are seen as an integral means of monetising edge computing investments for telcos. But how exactly will these APIs enhance telcos’ edge computing propositions? This article evaluate the technical and commercial considerations operators must address to capture value from edge APIs.

There are 18 network APIs, of which two are relevant for edge computing

Network APIs (Application Programming Interfaces) are interfaces that enable third parties to retrieve information about the network or to program and customise network services according to application needs. As a means of opening up the network and associated compute resources to developers, these APIs can facilitate automated, self-serve access to edge computing resources. This means they are seen as an integral part of monetising edge computing propositions.

According to our recently published Network API monetisation forecast, there are two key APIs relevant to edge computing:

• Edge workload mobility. This API utilises information about network conditions between clients and servers to direct an application to the correct endpoint, whether at the edge or in the cloud. It includes both the discovery of the best edge node, as well as the necessary APIs required to spin up and relocate workloads to the correct node. For example, if a cloud gaming application user was on a train journey, this API would ensure low latency by discovering and moving the workload to the best endpoint for processing.
• Adaptive cloud mobility. This API accounts for workload conditions to maintain application performance and is largely theoretical today. It dynamically adjusts the mix of computations across the computing environment (e.g. at the edge, in the cloud, and possibly on device) as network and application workloads change. For example, if an AI application was looking to undertake some fine-tuning the API would allow a dynamic burst of compute at the edge to support these workloads.

Edge network APIs represent the fastest growing segment of the total network API opportunity

STL Partners forecasts that the mobile network API opportunity will reach US$34 billion by 2030.

In the short term, this growth will be driven primarily by identity APIs addressing anti-fraud use cases. Identity APIs, such as number verify and SIM swap, can authenticate users and prevent financial transaction fraud. These APIs are a current focus for operators today as there is established demand from an existing market (which CPaaS players currently serve) and they are more simple to deliver as they are just exposing network information – but growth will begin to stagnate by 2030.

However, edge APIs will unlock significant longer term growth for operators by addressing emerging use cases, such as live video broadcasting and autonomous vehicles. Like network performance APIs (e.g. quality on demand and slice configuration), edge APIs enable greater programmability of edge resources and facilitate the transition toward non-best-efforts service delivery. From our monetisation forecast, edge APIs represent the fastest growing group of APIs (218% CAGR), taking its share of the total mobile network API opportunity from 0.4% in 2024 to 11% in 2030.

Source: STL Network API Monetisation Forecast, April 2024

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The value of edge APIs is in the enablement of edge computing propositions, rather than in direct monetisation of the API itself

Operators must consider different commercial models based on the specific value an API provides. Enabling edge computing through APIs is less about realisable value directly attributable to the API and more about enhancing telcos’ proposition to make a more “sticky” service for the customer.

Some APIs within the identity API family, such as number verify and SIM swap, will be directly monetisable and will unlock revenues through a simple transactional model (likely borrowed from more mature CPaaS wholesale monetisation models, e.g. volume/time X price).

On the other hand, edge APIs are unlikely to be a direct revenue generator for operators and will become a component of the broader proposition. This means building the cost into edge services with no additional charge for the API. Edge APIs will drive value for operators as a means of delivering their edge proposition more effectively and dynamically to the customer, and ultimately drive more compute onto their infrastructure. Moreover, for developers, the value is in the edge use case not in the API calls, therefore the costs are more likely to be embedded as a functional component of the service.

For operators today, this presents a broader challenge for the development of these APIs. Many telcos we have spoken to have set up product teams focused on developing network APIs often within a specific product line. These teams are likely to have to build and justify a business case proving direct ROI from APIs themselves. However, operators should move away from this productisation mentality. The value of edge APIs lies in enhancing telcos’ edge propositions, necessitating a move away from viewing them as direct revenue generators.

Operators need sufficient edge deployments to develop edge APIs, which only a few operators have achieved today

Delivering edge computing capabilities via APIs is crucial for enhancing operators’ edge propositions and supporting the US$462 billion edge opportunity. However, the adoption of and demand for these APIs depend heavily on the rollout of edge infrastructure. To date, only a few early movers such as Telstra, KT and Verizon have enough edge deployments to develop an API.

It is important that teams focused on growing edge revenues (e.g .the enterprise team) engage closely with teams looking at network APIs (e.g. the CTO team) to ensure API-enabled edge services are considered in the roadmap. Edge teams should also ensure that they test market demand for edge network APIs directly with developers, systems integrators and others who are likely to be their consumers. This wil ensure that there is a commercially focused, customer-centric lens to API development efforts.

Source: STL Partners report “Telco network edge computing: Lessons from early movers”; GSMA Open Gateway [accessed June 2024]

For more information on the edge and network API forecast, please contact us here.

Author

Miriam Sabapathy

Consultant

Miriam is a consultant at STL Partners working across a range of projects focusing on private networks, the impact of 5G across industry verticals and B2B growth strategies. Alongside this, she works within our private networks practice. Miriam holds a BA in Classics & Philosophy from Durham University.