Telcos need to fill in gaps to be Edge Computing (5G, IIoT) leaders

The rapidly expanding edge computing space represents a $17 billion opportunity for telecom service providers over the next three years, but those companies are being overlooked by enterprises when it comes to deployments, according to a recent study by World Wide Technology done in conjuction with Analysys Mason.

The Edge Disconnect report found that service providers’ deep connectivity expertise and investments in 5G infrastructure are advantages, but that they need to fill gaps in their offerings to become a one-stop shop for enterprises looking to expand to the edge with connectivity, infrastructure, and applications.

“Service providers are under immense pressure to monetize 5G infrastructure investments and create cost-reducing efficiencies,” said Dan Graham, global product leader for edge computing at WWT. “Edge computing provides services as close to the end user or device as possible and is essential to the value proposition of 5G. Next-gen applications, including self-driving vehicles, remote surgery, Industrial Internet of Things (IIoT), will all hinge on the edge.”

The report found that IT companies and tech companies, rather than telecoms service providers, are invariably seen as the “edge experts.”  In particular, the report authors wrote:

“Connectivity is the cornerstone of an enterprise edge strategy, yet enterprises don’t see connectivity providers as the partner they need to make their strategy a success.”

How can carriers better show off their edge muscles in front of enterprises? WWT makes a number of suggestions based on the research, which, it insisted, “reflected the market’s view and was in no way influenced by WWT’s own perspective on edge.”

By developing a “pre-packaged edge solution” composed of connectivity and system integration capabilities, as well as an application platform (which WWT thinks will generate nearly 60% of the resulting revenue) “telecoms service providers can cement their place in the new era of enterprise data management.”

“Cloud service providers and systems integrators may talk up to their ability to satisfy customers’ connectivity needs, but telecoms service providers have been delivering these services for decades,” reassured the authors. “They have an innate understanding of the intricacies involved, and how these can be optimized.”

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Industries covered by the research include transport, public sector, manufacturing, retail, financial services and healthcare. In each of these sectors, distributing computing through Edge implementations presents an opportunity to transform data management in line with the realities of an increasingly connected digital economy, as well as introducing new cost efficiencies and improvements to data security and compliance.

The report also identifies the 30 industry-specific Edge use cases likely to deliver the greatest revenue potential, all of which benefit from Edge’s suitability for transformative, data-intensive applications.

Key findings in the report:

  • Options: Only 6% of enterprise decision-makers would choose service providers for their edge implementations. Instead, 41% would primarily opt for a technology company, while 31% would go with a public cloud provider.
  • Demand: 59% of the $17 billion opportunity is at the level of user-facing application and service platforms, far more than connectivity-focused roles telecom service providers play. Telecom service providers need to expand what they offer beyond connectivity to capture more of the opportunity.
  • Edge drivers: Across multiple industries, the top reasons organizers are embracing the edge are newer or enhanced customer experiences, data security and privacy, and cost efficiencies.
  • Data management: Enterprises see the edge as a way of reducing data management costs by up to 20%.

The edge continues to be a promising opportunity for telecom service providers, cloud service providers, and channel partners. The report says that service providers’ deep understanding of connectivity is a key advantage. With the assistance of a partner who can bridge any gaps in their knowledge of vertical-specific use cases, they can develop pre-packaged solutions covering all three of the above requirements.  Achieve this, and service providers will be on the road to changing enterprise perceptions, increasingly cementing themselves as the de facto partners for enterprise Edge deployments.

Grand View Research analysts predict that the global market for edge computing will grow 37.4% a year through 2027, when it will grow to $43.4 billion. A key catalyst for that growth will be 5G technology, which promises significantly faster speeds and more bandwidth and capacity than current 4G LTE networks.

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References:

https://www.wwt.com/white-paper/the-edge-disconnect-how-service-providers-can-change-perceptions-to-become-the-authority-in-enterprise-edge-computing

https://channelnomics.com/2020/06/09/ingram-micro-cloud-simplifies-complex-aws-world/

https://www.lightreading.com/the-edge/telcos-need-to-up-their-edge-game—report/d/d-id/761562?

 

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