5G Edge Computing - The next frontier of Digital Business | HCLTech

5G Edge Computing - The next frontier of Digital Business

5G Edge Computing - The next frontier of Digital Business
October 20, 2021

What is Edge computing?

Edge computing brings computing power closer to the user, where decisions are made in real-time or near real-time. The edge network is based on 5G technology that provides the foundation for this distributed architecture by delivering solutions such as network slicing, auto-scaling and Service Management & Orchestration. These capabilities are needed for a variety of vertical use-cases like autonomous transportation systems, live streaming events, industrial operations, emergency response systems, remote healthcare, traffic controls, and more.

Recent research conducted by McKinsey mentions that more than 3000 companies worldwide have already deployed over 100 edge-compute cases. The hype cycle for edge networks in 2019 shows how several technologies are approaching the peak of inflated expectations. In the post-COVID world, particularly, many of these edge solutions such as SASE, HCI, edge video analytics, micro-data centers have already started reaching saturation point, with CIOs making conscious decisions to implement this architecture.


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Edge Advantage: Use-cases that attract companies

 According to IDC’s Worldwide Edge Spending Guide, the edge computing market is expected to hit $250Bn by 2024 at a CAGR of 12.5%. Of this, professional and managed services would account for 46%, followed by hardware/silicon at 32% and the remaining 21% on edge-related software. Keeping these facts in mind, there is a tremendous opportunity for global system integrators, cloud and network providers, and silicon players to leverage edge solutions and tap into this multi-billion dollar opportunity.

Global technology organizations have already accelerated their efforts to claim their share in this new architectural transformation. Key players include hyperscalers (AWS, Azure, GCP, Equinix, IBM, Oracle), compute infrastructure vendors (AMD, Intel, Dell, HP, Cisco), Telco service providers (AT&T, Verizon, T-MO, Lumen), edge security providers (Cisco, Zscaler, Cloudflare, Akamai, VMware), and a plethora of next-gen startups like MobileedgeX, Affirmed (Acquired by Microsoft), EdgeQ, EdgeConneX, etc.

There is also a significant investment and M&A happening in this space. One of the larger ones is the $40Bn Nvdia and ARM deal, which puts Nvdia at the front end of hetgen computing system suppliers. Other prominent examples include:

  • Edge computing startup macrometa gets $20M Series A funding.  
  • F5 acquires Volterra for $500M.
  • DNX ventures launched a $315M fund for US and Japanese B2B startups.
  • SiMa.ai raises $30M Series A to build low power edge chip solutions.

This clearly shows that the race is on to tap into this highly lucrative opportunity with promising returns.

AWS has clearly established itself as the market leader in providing edge computing services. Its partnership with 13 out of the top 20 telcos gives a testimony that both hyperscalers and telco can collaborate to monetize this market.

Recently, Verizon has started offering on-premise private edge solutions to customers utilizing computer vision to assist in packaging quality improvement. Further expansion is on the cards to provide automation enhancements like near real-time activity-based costing for improving customer-specific competitive pricing.

Another promising use-case is augmented reality (AR) at the edge. UK telecom operator BT is spearheading the 5G Edge-XR project with several ISVs and enterprise partners by enabling them with 5G know-how, spectrum and sports rights. The project is aimed at providing an immersive sports and cultural event experience using AR and 3D modeling. What a thrilling coffee table experience that would be!

With the recent Verizon announcement of bringing the 5G technology experience to NFL fans, we expect to see more exciting use cases around AR/VR, 4K/8K Video experiences, new ways of advertising, and branding campaigns.

Edge computing eco-system

Considering the nature of vertical use-cases, the edge computing market will have multiple players to develop custom hardware, edge applications and edge services.

Edge architecture provides MSPs/Telcos with an opportunity to modernize and monetize their own and enterprise connectivity infrastructure.

The industry is also pushing for an open ecosystem to drive innovation and accelerated adoption of edge architecture. Open Network Foundation (ONF) consortium has come up with an open-source Enterprise 5G/LTE Edge-Cloud-as-a-Service platform to deliver mobile connectivity and edge cloud services that can be further developed and customized by service providers/enterprises to address specific business needs.

Key building blocks of this architecture include:

  1. Cellular/IoT devices/End Points
  2. Network/Storage/Compute HW
  3. Edge Applications (Mobile Core User plane, AI apps, Security, network functions)
  4. Edge Network Orchestration and Management Software
  5. Enterprise Software and Control Systems

Key players and emerging dynamics

Like cloud computing - which proliferated in the early 2010s - edge computing is seen as a natural extension to drive more network and computing services to enterprise premises, especially by bringing in additional data security and privacy across 5G networks.

Edge architecture provides MSPs/Telcos with an opportunity to modernize and monetize their 5G technology and enterprise connectivity infrastructure and run ultra-low latent, scalable, secure, and high-performing business applications with guaranteed SLAs.

Barring that, a variety of users – be it those whose 5G cores are solidly entrenched or others who are still establishing their 5G networks – can also benefit immensely from these solutions.

For Chipmakers, the most lucrative segments have been smartphones, automotive, and high-end servers. But with vertical applications being very specific, chipmakers are in a catch-22 situation. Either they need to specialize themselves or create an ecosystem in conjunction with software vendors.

Embedded FPGA technology is gaining preference for edge compute applications as they are highly customized, and the system instructions can be kept up to date with changing scenarios and use-cases. RISC-V ISA is also another technology that’s driving up an open standards-based approach to build 5G network devices that are highly cost-effective compared to the proprietary solutions from chip vendors.

Eventually, multiple chipmakers will dominate specific industry use-cases that leverage eFPGA and RISC-V technology to build SoCs/AI chips needed for massive data processing at the edge.

Intel is quietly flying under the radar and pursuing the edge market. With the launch of the 2nd Xeon platform and Atom P5900 based on 10nm SoC, it has upgraded its portfolio. It’s also creating an eco-system through developer programs like OpenVINO for AI acceleration, OpenNESS for enterprise edge and Open Visual Cloud for cloud-native deployments based on x86. There is a strong focus from Intel to scale into cloud and Telco service providers through such programs.

For Telecom OEMs, Edge computing is the next lucrative market to offer their connectivity platform as a service. Companies like Cisco, Nokia, and Ericsson are well-positioned with their 5G Core, Transport, and RAN platforms to run in a distributed and disaggregate edge cloud environment. The value creation for such companies exists by offering 5G connectivity Infra to the Cloud/Telco carriers or offering 5G connectivity as a managed service for enterprise edge deployments. This will be a fundamental business model shift for this sector.

For Telcos, Edge computing is the single most significant opportunity to transform their enterprise business offerings. While 5G consumer offerings can create the pull for a 5G experience, the real money is in the enterprise segment. Telcos are well-positioned through their reach and credibility in edge network connectivity, Telco cloud maturity, and enterprise reach. By building a coherent strategy to develop an edge compute architecture propelled by 5G upgrades, operators can harness this market in the coming years.

Hyperscalers, though they lag connectivity layer, are already ahead of the curve in edge computing through proactive investments in working with enterprises on potential 5G use cases. In the recent past, we have seen a series of acquisitions by Microsoft in this space (Affirmed networks, Metaswitch) to up its private wireless offering.

AWS launched outpost services, snowball, and many vertical solutions to provide single-digit millisecond latency for developers who can deploy their applications to wavelength zones using its edge infrastructure.

For Global System integrators and engineering service providers, edge computing creates a massive opportunity. According to a new forecast from IDC, worldwide revenues for managed edge services will reach $445.3 million in 2021, an increase of 43.5% over 2020. Over the 2021-2025 forecast period, the compound annual growth rate (CAGR) for managed edge services is expected to be 55.1%.

For MSPs, Edge as a Service is a great opportunity to work closely with chipset vendors, OEMs, Telcos and Enterprises in multiple areas to create exponential value. Some of these include:

  1. Edge computing platform development
  2. SoC development
  3. Edge Managed Services
  4. Edge Platform engineering
  5. AIOps
  6. Edge Security

In conclusion, edge computing that is bolstered by 5G technology will be pivotal in driving the next stage of the 5G experience, as well as greater strides for digital business expansion. With the right providers, resources, and systems, companies can expect a fruitful future that will enhance the market as a whole.


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