The emerging opportunity for edge compute

There is ongoing interest in the telecoms industry about edge computing. The key rationale behind this is that telcos – through their distributed network assets – are in a unique position to push workloads closer to devices, reducing latency and/or data volumes over to the cloud, and thereby enabling new experiences and use cases, while enhancing existing ones.

After years of centralising workloads in the public cloud there is complementary demand emerging for more distributed compute. This is good news for telcos as it shows that the time is ripe for them to turn their ambition to edge computing. Telcos can exploit their own connectivity, unique network APIs and an existing distributed real-estate. Telcos are in a unique position to play a strong role in distributed and edge computing ecosystems.

Telcos’ excitement around edge is fuelled by new differentiation and revenue opportunities leveraging the dynamic application developer ecosystem which hitherto has been dominated by ever more sophisticated and technically advanced public clouds and proofs-of-concept (POCs). Furthermore, underlying trends in cloud computing are increasingly promising for distributed (edge) computing:

• Hybrid and multi-cloud models and technologies will continue to facilitate more distributed compute scenarios beyond hyperscale-only and on-premise-only.
• Lightweight compute models will enable the deployment of cloud-workloads on a smaller footprint (e.g. train AI models in the cloud and execute them at the edge, such as in a smartphone or a connected car). For example, containers and “serverless” compute models make it possible to run workloads more efficiently and elastically than virtual machines.
• The adoption of more platform-agnostic deployment models (such as containers) will facilitate the shifting and moving of workloads within distributed and edge cloud environments.
• Proliferation of edge gateways and IoT devices will drive processing and analytics outside the datacentre and closer to the customer (premises).
• Regarding security, a more distributed computing model is well-suited to defending against certain types of attacks (e.g. DDOS). Furthermore, if/when breaches do occur, these can be quarantined to an edge “cloudlet”, limiting the potential damage and undermining the economics of an attack.

Our findings in this report are informed by a research programme STL Partners has conducted since January 2018, supported by and in cooperation with Aricent. For this research, STL Partners has conducted interviews with both telcos and technology companies, globally about their views and current efforts related to edge computing. Overall, the research forms part of STL Partners’ ongoing research work and consulting assignments around telco edge cloud.

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Key questions arising for telcos

Notwithstanding the strategic opportunity, telcos face some big questions in formulating edge initiatives. These include:

“What is the business case for telco edge – where is the money?”

“Will massive demand for low-latency compute drive demand from core/central to edge compute?”

“How can we compete with the big cloud players – won’t they expand and control the edge too?”

“How should we play in Enterprise edge – should we offer edge services on customer premises?”

“How can we architect and charge for different edge services – those requiring expensive, specialised hardware for accelerated computing to process machine learning/AI workloads?”

“What edge services should we offer and through what distribution channels?”

These are (real examples of) questions that telcos must address in defining and delivering edge services. This report provides a framework to tackle these (and other) questions in a structured way. We will revisit these questions (and the answers) throughout the report.

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