5G MEC has the potential to evolve Telcos from “Communication Service provider” to “Experience Service Providers”. With MEC, Telcos can come up with new-age applications, services and low latency use cases. Telcos being the centre of the communication industry is uniquely positioned to take advantage of their physical proximity to the customer. Telcos MEC landscape is complex, and it comprises various players from infrastructure providers to silicon players to hyperscalers and enterprises.
Let us see how these key players are transforming themselves in the Telco MEC ecosystem.
Hyperscalers – Catalyzing the 5G MEC Landscape
In the last year, it has been observed that cloud Hyperscalers, especially the biggest three – Amazon Web Services (AWS), Microsoft Azure and Google are playing a much bigger role in the 5G landscape. They are at the forefront of the edge computing market. To accelerate their route and capture a larger pie in the 5G ecosystem, they have made significant efforts which include - launching platforms dedicated to telecom networks, establishing partnerships with Telco’s for embedding their platforms into their infrastructure, product vendor acquisition and investment in edge data centre infrastructure. Some of the trends seen with Hyperscalers are mentioned below: -
- Dedicated Telco Platform: - Hyperscalers are making the investment in launching a dedicated Telco platform. Some of the dedicated cloud platform launched by these hyperscalers include Wavelength from AWS, Azure Edge Zones from Microsoft and Anthos for Telecom from Google Cloud.
- Partnership with Telco: - Another step take by Hyperscalers is to partner with Telco’s and these partnership opportunities of Hyperscalers are welcomed by Telco’s who need cloud infrastructure and platform support to run their edge services. Some of the examples are Amazon launched its new AWS Wavelength 5G edge computing platform and partnered with Verizon, Vodafone, KDDI, SK Telekom for 5G Edge.
- Investment in Key OEM players: - Microsoft acquired Affirmed Networks and added 5G core and cloud-native solution for Telco’s to strengthen its portfolio. Continuing its tradition, Microsoft also bought unified communication provider Metaswitch and enhanced its portfolio towards the voice, data, and virtualized network software solutions.
- Investment in Data Center Infrastructure: - In addition to partnering with Telco’s and acquisition of product vendors, the hyperscalers are making the investment in developing data centre edge infrastructure. Equinix, one of the largest data centre providers in the world, launched a $1 billion-plus joint venture to operate data centres in Europe for Amazon and Microsoft. Cloud providers like Google cloud, IBM Cloud, Microsoft Azure, Amazon Web Services, Oracle, Alibaba Cloud have placed good amount of their products in Equinix data centers.
Silicon – Powering the Edge
Artificial Intelligence at the edge is the key to the success of various applications and use cases across vertical markets. Processing data at the edge reduces the round trip time in sending data to the data centre or cloud. Let’s take an example of an autonomous car – It would be impractical or rather dangerous to wait for the next steps as per the data that is transferred from autonomous car to cloud for analysis. The safety of passenger highly depends on the real-time processing of data with accuracy. To carry the same generic silicon chips usage will not work. Silicon Industry needs to continuously innovate, and some of the trends that are observed in this sector that pushes them to remain at the forefront of innovation are as follows: -
- Mergers and Acquisitions: - Most artificial intelligence-driven applications depend mainly on graphics processing units (GPUs) running in tandem with traditional CPUs on data centre servers located near the data source. Most of the cutting-edge research seems to rely on the ability of GPUs as well as CPUs and newer AI chips to run many deep learning workloads in parallel. To have AI, GPU as well as CPU capabilities in Silicon space, some companies have taken the route of mergers and acquisitions. NVIDIA’s and Arm acquisition is one such example.
- Collaboration with Hyperscalers: - Silicon players are collaborating with cloud providers to dominate the edge market. For example, Microsoft is working closely with the silicon ecosystem to launch an Azure- Ready Silicon program. Microsoft collaborated with Arm silicon for Azure deployment, providing an artificial intelligence experience to developers.
- Rise of Silicon Startups in AI and Edge: - MEC market have open gates for new AI and Edge-based silicon startup companies. There are many new silicon startup companies springing up around the world in AI and Edge. Some of the examples are Graphcore, Bristol UK based company focusing on IPU (intelligence processing unit) chip. Currently, Graphcore’s IPU chip is available in a Dell server for edge computing applications.
- Direct collaboration with Vertical Partners: - Collaboration with vertical partners by Silicon industry is helping them to fill gaps in the product line, entering the new market area with access to a wider customer base. Intel's acquisition of Mobileye allowed it to enter the market and filled gaps in its automotive product offering.
Enterprises – Entering New Era
The emergence of Industry 4.0 is driving innovative applications which are designed to increase productivity. The deployment of such applications in industrial settings is the main enabler of the fourth industrial revolution (Industry 4.0), which is currently disrupting entire sectors of the economy, including Automobile, Healthcare, Retail, Manufacturing, energy, Mining, Oil & Gas, as well as other large venues.
- Collaboration Platform: - Telcos are developing platforms where enterprise can seamlessly integrate their specialized use case and can be part of the overall Telco catalogue offering services to Telco’s end customer. This platform is a common space to synergize the strength of multiple players and is commonly referred to as an “App marketplace” or “MEC Marketplace”. For example, in the Automotive sector, Verizon has taken the approach of supporting Renovo in delivering new Network-ADAS safety features, such as real-time alerts for all vehicles in the vicinity of an emergency-braking event and other situations where drivers need to react instantly to potentially dangerous situations ahead.
- Push in Semiconductor space: Seeing the pace at which the silicon industry is evolving and bringing AI intelligence to the Edge, many vertical players are entering into silicon market. Toyota is getting into the semiconductor business with the aim to create next-generation semiconductors for use in the automotive industry and in self-driving cars. For the same, Toyota is partnering with auto supplier Denso to form a new company focused on chip manufacture.
- Private Network adoption: - Private cellular networks are seen by many as a major opportunity to set up networks in support of industrial 4.0 projects and in service of applications where data sovereignty is paramount. While enterprises can build their own network with the dedicated spectrum that they either own or lease, that is not the only way that private 5G networks are being put together. They are collaborating with Telcos for setting, managing and running their Private Networks. Big names in cloud computing, such as AWS, Google and Microsoft, are well-positioned in Private Networks as they are actively deploying edge-clouds into enterprises to run various industry 4.0 use cases.
Infrastructure Providers – Establishing the Edge
The ultra-low latency use cases require adequate network infrastructure to support applications like V2X, AR/VR, drones. MEC bandwagon is being crowded by established players as well as several new players, including startups providing Telco - infrastructure as a service (IaaS).. MEC infrastructure allows implementation of software functions that operates with an virtualized platform which is a standard platform deployed very close to the edge. The infrastructure at Edge is classified as cloud providers, which we have covered separately as Hyperscalers because of the way they have transformed themselves and are playing a much bigger role in the ecosystem. The other infrastructure players include – Compute, Storage, Router, Switch, Platform and Data Center Providers.
- Compute, Storage, Router and Switches: - At the core of the mobile edge host is the virtualization infrastructure, which supplies compute, storage and network resources to the mobile edge applications. There are many players apart from legacy players like Dell and HPE who are entering this space. Dell created a dedicated IoT division in 2017 and came up with edge specific products, which includes edge Gateways, compute and storage devices.
- Data Centers Colocation: - Data centre again play an important role in delivery of the MEC based use cases. Edge data centres are small data centres purposely kept small and closer to the user to deliver fast services with minimal latency. The configuration of edge data centres is done in such a way that it processes time-sensitive applications, while data that is less time-sensitive or less integral is sent to a larger data centres or central data centres. Edge computing has created an almost inexhaustible demand for data centre capacity, in turn contributing as one of the prime reasons for data centre industry restructuring. 2020 was a historic year for Data Centre Industry. Data Centre related M&A crossed the $30B mark with 113 deals in 2020, with Digital Reality and Equinix leading as the global Data Center providers.
- Platform Providers: - There are many MEC platforms available in the market, but the key players who will dominate the platform market are the ones who can support both OpenStack NFV(OPNFV) and Kubernetes NFV Infrastructure, seamless interworking with all cloud providers, dynamic service initiation (application services can start dynamically when needed and shut down when not in use). Some of the key examples of MEC platforms are – Saguna brings ETSI compliant, 3GPP based, which enables ultra-reliable low latency communication enabling 5G over 4G. Clear Blade is another platform provider which offers a core middleware platform for IoT at the edge.
In this hyper-connected industrial environment, edge computing, with its solution-agnostic attribute, can be used across various applications, such as connected cars, real-time inventory management, remote asset monitoring, autonomous car, robotics, smart farming, drones and smart. To provide an enhanced customer experience with new-age digital services, Telcos need to collaborate, co-innovate with the multitude of partners to create a new ecosystem that can foster innovative services in an agile delivery model.