Network edge capacity forecast: The role of hyperscalers

Developers need to see sufficient edge capacity

Edge computing comprises a spectrum of potential locations and technologies designed to bring processing power closer to the end-device and source of data, outside of a central data centre or cloud. This report focuses on forecasting capacity at the network edge – i.e. edge computing at edge data centres owned (and usually operated) by telecoms operators. 

This forecast models capacity at these sites for non-RAN workloads. In other words, processing for enterprise or consumer applications and the distributed core network functions required to support them. We cover forecasts on RAN as part of our Telco Cloud research services portfolio.

Forecast scope in terms of edge locations and workload types

Source: STL Partners

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The output of the forecast focuses on capacity: number of edge data centres and servers

STL Partners has always argued that for network edge to take off, developers and enterprises need to see sufficient edge capacity to transform their applications to leverage its benefits at scale. The forecast seeks to provide an indication for how this will grow over the next five years, by predicting the number of edge data centres owned by telecoms operators and how many servers they plan to fill these up with.

Hardware vendors have been evolving their server portfolios for a number of years to fit the needs of the telecoms industry. This started with core network virtualisation, as the industry moved away from an appliance-based model to using common-off-the-shelf hardware to support the virtualised LTE core.

As infrastructure moves “deeper” into the edge, the requirements for servers will change. Servers at RAN base stations will not have full data centre structures, but need to be self-contained and ruggedised. 

However, at this stage of the market’s maturity, most servers at the network edge will be in data centre-like facilities. 

There are three key factors determining a telco’s approach and timing for its edge computing data centres

Telecoms operators want to build their network edge capacity where there is demand. In general, the approach has been to create a deployment strategy for network edge data centres that guarantees a level of (low) latency for a certain level of population coverage. In interviews with operators, this has often ranged from 90-99% of the population experiencing sub-10 to 20 millisecond roundtrip latency for applications hosted at their network edge.

The resultant distribution of edge capacity will therefore be impacted by the spread of the population, the size of the country and the telecoms operator’s network topology. For example, in well connected, small countries, such as the Netherlands, low latencies are already achievable with the current networks and location of centralised data centres.

Key factors determining network edge build​

Source: STL Partners

The actual number of sites and speed at which a telecoms operator deploys these sites is driven by three main factors: 

Factor 1: edge computing strategy;

Factor 2: the speed at which it has or will deploy 5G (if it is a mobile operator);

Factor 3: the country’s geographic profile.

Details on the evidence for the individual factors can be found in the inaugural report, Forecasting capacity of network edge computing.

Table of contents

  • Executive summary
  • Introduction to the forecast
  • Key findings this year
  • Regional deep-dives
  • Role of hyperscalers
  • Conclusions
  • Appendix: Methodology

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Building a green network: Sustainability game changers

Carbon emissions: At the heart of the corporate strategy for SPs

At the core of all service provider businesses is their network. Customers expect from these networks a service which is fast, reliable, customisable and cost-effective. For service providers to continue to meet these expectations, they are investing in new technologies that help to improve their performance. This investment includes but is not limited to 5G (SA) core, cloudification, AI and automation capabilities, edge computing, vRAN and O-RAN, fibre to the home and more.

However, at the same time as making these network advancements, service providers are also focused on reducing their carbon emissions. Never before has this been such an important part of the corporate strategy of many large companies, not the least the service providers. Becoming greener has become a top priority politically, economically and socially and is increasingly encompassing all parts of the business, from reducing the use of electricity to trying to increase the amount of recycled and refurbished equipment in use.

In many instances efforts to become more sustainable have been accelerated because of the wave of commitments from service providers to become net-zero companies in the next 10-30 years.1 Achieving these commitments will require changes in operating practices across service providers’ businesses, but particularly, changes in the way that they rollout, operate, manage, maintain and upgrade their networks.

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The single biggest contributor: Green networks

Figure 1 indicates why the networks are such an important element in reducing carbon emissions – because they are by far the most energy-hungry part of a service providers’ business. Last year, the Belgian service provider Proximus reported than more than 75% of their electricity consumption came from their networks.

More than 75% of Proximus’ electricity consumption last year came from its fixed and mobile networks

Green networks - Proximus electricity consumption emissions carbon

There are technological advancements that are both improving network performance and helping to reduce carbon emissions. One such of these is “Moore’s Law” – the observed phenomenon from the co-founder of Intel that while compute speed and power doubles every two years, the cost of the computers is halved. Making smaller, more powerful equipment helps to reduce the embedded carbon of a network and while we expect generally that this trend will continue, it will not be enough alone for service providers to reach their net-zero goals.

Instead, more radical action must be taken. Service providers must accelerate their efforts to prioritise sustainability just as much as performance when it comes to their networks and data centre infrastructure. In this report we discuss five key steps that could be sustainability gamechangers in building green networks. The insights from the report have largely been formed through an interview programme with service providers globally to understand their current efforts and future ambitions.

Table of Contents

  • Executive Summary
    • Five sustainability gamechangers to build a greener network
  • Introduction
    • Carbon emissions: At the heart of the corporate strategy for SPs
    • The single biggest contributor: Why the focus on green networks
  • Re-evaluate the gold standard for network KPIs
    • Impact on carbon emissions
    • Evidence of adoption by service providers
  • Develop best-in-class AI and automation capabilities
    • Impact on carbon emissions
    • Evidence of adoption by service providers
  • Simplify the network to achieve emission benefits today
    • Impact on carbon emissions
    • Evidence of adoption by service providers
  • Ensure workloads are running on green energy as much as possible
    • Impact on carbon emissions
    • Evidence of adoption by service providers
  • Target a power usage effectiveness rating of 0.5 through innovative waste heat solutions
    • Impact on carbon emissions
    • Evidence of adoption by service providers
  • Conclusion

 

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