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Is the edge an opportunity, threat or distraction for telco operators?

Understanding how the shift to edge computing will benefit operators is critical not only for the operators themselves but the ecosystem of telecoms technology suppliers.

It is widely accepted now that the shift to edge computing is real and already underway in key sectors.

What is less well defined is what the specific opportunities will be for the existing ecosystem of digital infrastructure suppliers, operators and customers as well as new entrants.

There is also obviously also a very serious question around how the ongoing crisis might slow, or conversely accelerate the need for edge infrastructure.

Questions over the implications of near-term disruption and longer-term opportunities for edge are obviously challenging to answer. While answers to the former are extremely fluid – and will continue to be for some time - the latter long-term edge opportunity is becoming more defined.

For example, Vertiv recently worked with industry analysts Omdia to dig into what the edge opportunity looks like for an important part of the digital ecosystem: telecom operators. Understanding how the shift to edge computing will benefit operators is critical not only for the operators themselves but the ecosystem of suppliers, which supports them.

According to the research conducted by Omdia, edge data centers already accounted for 1.2% of global IT rack unit shipments in 2018, and their penetration of the market will have more than doubled by 2023. Other estimates put the total edge computing market at more than $600 billion by 2024.

According to Omdia, key telecom providers already have well-evolved edge strategies in place. For example, AT&T believes that a logical step in its program of network transformation and virtualization will be for edge computing nodes to be located within its own network. Meanwhile, CenturyLink announced in August 2019 that it had more than 100 locations ready to be utilized for edge compute services and is planning to invest several hundred million dollars in this new program.

However, Omdia’s research also revealed that the “edge is complex and yet not fully defined.” That is creating some uncertainty for telco’s as to how best to position and invest in edge infrastructure. For example, when asked by Omdia only 36 percent of operators said their sector would be most important in the creation of new revenue services from the edge with application developers (30%) and public cloud providers (25%) also identified as taking a large slice of revenues.

As well as addressing the question around specific opportunities, Omdia also provided some insights on how the edge could conversely actually be a distraction or perhaps even a threat to some operators that are not sufficiently informed or prepared. “Edge is broadly viewed as an opportunity for CSPs, but if not approached in the right way, it could be a distraction for some players and even a threat to others,” the report states.

Ultimately, edge growth – in its myriad forms – is already creating new business models for operators. Some of that growth is obviously being disrupted by recent events, but the takeaway from researchers such as Omdia is that the long-term opportunities are there for the taking. Yes, edge also presents specific threats and distractions, but as the current crisis shows, life goes on.

A panel of Vertiv’s global experts united to debate the opportunities for telcos live on Linkedin, you can watch the recording here.

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