There has been a great deal of activity in the edge computing space. Mobile Network Operators (MNOs), cell tower owner/operators, data center operator and content delivery networks are all positioning themselves to take advantage of this emerging market. The motivations are clear. Enterprise customers have been able to use both cloud services as well as external data centers to meet their computing needs.
Both markets have been strong. According to Grandview Research, the data center colocation market was $40.31 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 12.9% from 2020 to 2027. Gartner pegs the combined cloud Platform as a Service and Infrastructure as a Service markets at $72 billion in 2019.
Edge complements these existing markets. Gartner sums it up:
“Cloud computing has enabled scale, innovation, connection and agility at the back end, but edge computing will complement cloud computing by providing more real-time value, more immersive interactions, more data production and more intelligence at the front end — closer to where people and things exist.”
Since edge computing must be close to the end user, different companies are pursuing strategies to gain an advantage because of location.
Tower owners want to take advantage of their existing cell towers:
- SBA Communications Corporation (SBA) purchased 25 cell tower sites and one data center for $61.6 million. The data center, called JaxNAP, is in Jacksonville, Florida, and sports 280,000 square feet of computing space along with interconnections to 20 fiber providers, including subsea telecommunications routes for international communications.
- American Tower’s American Tower Edge service with edge computing data modules at the base of cell towers in six cities: Atlanta, Jacksonville, Denver, Boulder, Austin, and Pittsburgh.
- Crown Castle partnered on a $90 million funding that will allow edge specialist Vapor IO to build a national network.
Mobile Network Operators
MNOs are collaborating with public cloud providers because they can benefit from these players’ existing global presence, developer ecosystems and cloud platform technologies.KDDI, SK Telecom, Verizon and Vodafone have partnered with AWS Wavelength. AT&T, Etisalat, NTT Comms, Rogers, Telstra and Vodafone have teamed up with Microsoft Azure. Google has struck deals with AT&T Telecom Italia, Vodafone, Telefónica and Orange.
This is a recognition that the enterprise customers and application developers already have extensive experience with the big cloud providers and it would be difficult for operators to duplicate these development environments. However, these relationships may get complicated. As a recent Analysy Mason study noted, “a significant portion of operators (27%) consider these players to be potential threats to their edge computing business because public cloud providers are also potential competitors to operators in many layers of the value chain.”
Content Delivery Networks
CDN operators don’t want to be left out. In a recent investor call, Akamai CEO Tom Leighton said Akamai’s “Intelligent Edge Platform” now covers 300,000 servers in over 4,000 locations, with roughly 1,500 network partners. “The edge is where connected devices and the Internet of things are located where 5G networks will become pervasive,” he explained.
Data Center Operators
Equinix announced it is acquiring Packet, a startup specializing in distributed cloud services, to deliver interconnected edge service and “bare metal” cloud services. Packet has been one of the early leaders in edge computing for business with an IoT network for Sprint. Packet has deployed servers at cell towers in micro-data centers operated by Vapor IO and SBA Communications.
Making Sense of This
Enterprise customers will have choices. They can choose between the cloud development platforms they already use or bare metal. As latency becomes more of an issue, computing locations can be as close as the cell tower itself. What will this mean for emerging applications? How will costs differ as edge computing is delivered in smaller locations without the advantages of massive data center economies of scale? How does this affect network architectures especially for 5G transport?
Volta is working with Light Reading’s Jennifer Clark on a webinar called Leveraging the Cloud at the Edge that will cover this in detail. We also have a white paper available for download now called MEC Synergies and Opportunities