“Fiber is the future” at Frontier, which added a record 54K fiber broadband customers in 1Q-2022
Frontier Communications added a record 54,000 fiber broadband customers in the first quarter of 2022, a 20% gain over the previous record set in Q4 2021 and somewhat higher than expectations coming in to the quarter. These fiber customer adds are coming from both new and existing fiber markets. Frontier’s data continues to track nicely: 22% penetration at the 12-month mark for its 2020 cohort and 18% for its larger 2021 cohort, and 44% at the 24-month mark for its (admittedly small and probably not broadly representative) 2020 cohort. Base market penetration was up 50 basis points in the quarter and 90 basis points over the past two quarters.
Frontier’s aggressive fiber network buildout and a record low churn of 1.19%, enabled the telco to offset copper losses and add 20,000 net broadband subs for Q1 2021. That’s a record nearly two times higher than that set in the prior quarter. Frontier ended the quarter with 1.38 million residential fiber broadband subs, up 11% YoY.
Frontier plans to expand its fiber-to-the-premises (FTTP) footprint to 10 million locations by 2025 – a figure that includes the company’s “Wave 1” and “Wave 2” builds. Frontier built fiber out to another 211,000 locations in the first quarter of 2022, and says it’s on track to add more than 1 million FTTP locations for all of 2022, and another 1.6 million in 2023.
Frontier passed another 211K locations with fiber in the quarter, up from the ~190K level of the prior two quarters, a nice accomplishment in light of the disruptions associated with Omicron early in the quarter (100K of the 211K passings were achieved in March alone). Management continues to expect to add at least 1M fiber locations in 2022, and it seems on track to meet or exceed that target.
“Positive net adds is the new normal,” Nick Jeffery, Frontier’s president and CEO, declared on Friday’s earnings call. The CEO continued:
“We gained momentum in business and wholesale, reaching a key inflection point in SMB and we made progress improving our employee engagement. And last week, we unveiled our new Frontier brand. A year ago, we said we will take a long and hard look at our brand and its future and after a thorough data-driven evaluation I am delighted with the results. Our new brand is modern, more relevant, more tech-oriented, and reflects our commitment to relentlessly being better in our business and for our customers. We also gained customers in our mature fiber market, what we refer to as our base fiber footprint. In our base fiber footprint, penetration increased 50 basis points sequentially to 42.4%. And our base fiber footprint serves as a target for where we expect to drive penetration in our expansion fiber footprint and we expect to steadily grow penetration to at least 45% over time.
In our expansion fiber footprint, we are also making excellent progress. At the 12-month mark, our 2021 build cohort reached penetration of 18%, consistent with our target range of 15% to 20%. And at the 24-month mark, our 2020 build cohort reached penetration of 44%, significantly outperforming our target range of 25% to 30%. As larger builds are pulled into our 2020 cohort throughout the year, we continue to expect penetration of 25% to 30% at the 24-month mark.”
Indeed, Frontier’s operations and service levels have improved dramatically over the past two years. Our colleague Nick Del Deo at MoffettNathanson wrote in a research note to clients:
By some measures, Frontier is now operating at as high a level as key competitor Charter in the California market. And this is having an effect on its customer perceptions and market traction. Its American Consumer Satisfaction Index scores are slowly moving up, while its net promoter score has surged, especially where it has rolled out FTTH. Churn has fallen, as have customer care call volumes.
Frontier’s post-emergence management team has taken a data-driven approach to running the business and making key decisions. Put simply, the choice to refresh the company’s font and logo rather than totally rebrand is further evidence that changes to the business are working.”
To reiterate, 1Q-2022 fiber penetration rates rose to 42.45% in the company’s base fiber footprint. Frontier expects to reach penetration rates of at least 45% over time.
In the expansion areas, Frontier realized a penetration rate of 12% at the 12-month mark in its 2021 fiber build cohort – within its target range of 15%-20%. In the 2020 FTTP build cohort, Frontier is seeing a 44% penetration rate at the 24-month mark, outperforming its target range of 25%-30%.
Source: Frontier Communications Q1 2022 earnings presentation
CEO Jeffery said Frontier’s fiber-powered services are taking share from incumbent cable operators, but didn’t elaborate on how much damage Frontier is inflicting. He also acknowledged that fixed wireless access (FWA) could present an attractive option in rural areas where fiber isn’t present. Jeffery also believes fiber represents “a fundamentally different proposition” over FWA, given current data usage trends. In March, the average Frontier fiber subscriber consumed about 900 gigabytes of data, up 30% from pre-pandemic levels, with a portion consistently consuming more than 1 terabyte per month.
Significantly, Frontier gained new customers in areas where fiber is being built out. “This is critical because we know our future is fiber and fiber customers are the ones that will drive our growth in the years to come,” said Jeffery, a former Vodafone UK exec who took the helm of Frontier in March 2021.
For the full 2022 year, Frontier is targeting adjusted EBIDTA of $2 billion to $2.15 billion, and capital expenditures in the range of $2.4 billion to $2.5 billion, the same as guidance issued last quarter. This implies $2,003M for the remainder of the year at the midpoint. Management continues to target FTTH builds in 2022 of at least 1,000K vs. 638K built in 2021.
References:
https://s1.q4cdn.com/144417568/files/doc_financials/2022/q1/Frontier-First-Quarter-2022-Results.pdf
Viavi’s State of 5G report finds 1,947 5G cities (635 new) -mostly NSA- at end of 2021
As of end-December, the number of cities worldwide with 5G networks was 1,947 , with 635 new cities added in 2021, according to the latest Viavi Solutions report ‘The State of 5G.’
By the end of January 2022, 72 countries had 5G networks, with Argentina, Bhutan, Kenya, Kazakhstan, Malaysia, Malta and Mauritius coming online in the second half of 2021.
Europe, Middle East & Africa (EMEA) passed Asia Pacific including Greater China (APAC), to become the region with the most 5G cities, at 839. APAC has 689 5G cities and the Americas has 419.
China has the most 5G cities (356), ahead of the US (296) and the Philippines (98). However, more than half of China’s so called 5G subscribers are on 4G networks. Robert Clark of Light Reading wrote: “China has tried to kick-start 5G with low prices, with the result that it has a huge population of 5G subscribers on 4G networks. Less than half of China Mobile’s 467 million 5G subs are actually using 5G – a ratio that has remained constant for the past year.”
Most 5G networks deployed are Non-Standalone (NSA) networks. There are only 24 5G Standalone (SA) networks. It is widely considered that many of the next-generation use cases and monetization models associated with 5G, beyond enhanced Mobile Broadband (eMBB) will only be possible when Standalone 5G networks built on new 5G core networks are in place.
The State of 5G also highlights the growing Open RAN ecosystem, combining mobile operators as well as software and infrastructure vendors, seeking to develop an open, virtualized Radio Access Network (RAN) with embedded Artificial Intelligence (AI) control. As of March 2022, 64 operators have publicly announced their participation in the development of Open RAN networks. This breaks down to 23 live deployments of Open RAN networks, 34 in the trial phase with a further seven operators that have publicly announced they are in the pre-trial phase.
As of March 2022, 64 operators publicly announced their participation in the development of Open RAN networks, of which 23 were live deployments, 34 in the trial phase and another 7 operators in the pre-trial phase.
“5G continued to expand, despite the headwinds of a global pandemic,” said Sameh Yamany, CTO, VIAVI Solutions. “What comes next in 5G is the reinforcement of networks. This will take a couple of forms. Firstly, we expect to see more Standalone 5G networks, which will deliver on much of the promise of 5G, both for the operator and for the wider ecosystem of users. And secondly, we expect to see Open RAN continue its rapid development and start to become a de facto standard. VIAVI will continue to play a central role in testing those new networks as they are built and expanded.”
References:
https://www.viavisolutions.com/en-us/literature/state-5g-may-2022-posters-en.pdf
https://www.lightreading.com/asia/consumers-still-seeking-reason-to-buy-5g/d/d-id/777250?
FCC Grants Experimental License to AST SpaceMobile for BlueWalker 3 Satellite using Spectrum from AT&T
The FCC will permit AST SpaceMobile to test transmissions from smartphones directly to its new satellite. Apparently, AST SpaceMobile’s testing in the U.S. will use spectrum licenses owned by AT&T.
AST SpaceMobile said it will conduct the testing “using 3GPP low-band cellular frequencies and Q/V-band frequencies,” though it did not provide details. However, the company’s FCC application, approved Monday, lists three spectrum licenses that are owned by AT&T.
Brian Goemmer, founder of spectrum-tracking company AllNet Insights & Analytics, said AST SpaceMobile will use AT&T’s 846.5-849MHz license in Midland, Texas; its 845-846.5MHz license in Honolulu; and its 788-798MHz license in Pine Springs, Texas. The last one is notable because it’s connected to FirstNet, a government agency working with AT&T to build a nationwide broadband network for public safety users.
Light Reading first reported of a connection between AST SpaceMobile and AT&T in 2020. However, the companies have remained relatively quiet about their work together. Officials from AST SpaceMobile and AT&T did not immediately respond to questions from Light Reading about the planned testing.
According to FierceWireless, AST SpaceMobile will also test its service in Japan with Rakuten Mobile. AST SpaceMobile has also announced deals with the likes of Vodafone, Smart Communications, Africell and UT Mobile.
AST SpaceMobile said it expects to begin testing its offering after it launches its new BlueWalker 3 sometime this summer. The company had hoped to launch the satellite sometime in March or April, but that effort was delayed.
Broadly, both Lynk and AST SpaceMobile promise to connect existing, unmodified cell phones to their low-Earth orbit (LEO) satellites by conducting transmissions in the licensed spectrum bands of their mobile network operator partners. Lynk has promised to launch commercial services by next year, while AST SpaceMobile has promised a 2023 commercial launch.
The authorization comes as the company prepares for the planned summer 2022 launch of BlueWalker 3, its test satellite with an aperture of 693 square feet that is designed to communicate directly with cell phones via 3GPP standard frequencies.
“We appreciate the diligent support of the FCC in providing the experimental license for our upcoming satellite launch,” said AST SpaceMobile Founder, Chairman and CEO Abel Avellan. “Together with other testing around the world, this license will enable us to conduct some of our most important testing here, at home, in the United States.”
AST SpaceMobile continues to pursue additional authorizations with the FCC related to its planned constellation of BlueBird satellites.
AST SpaceMobile’s mission is to eliminate the connectivity gaps faced by today’s five billion mobile subscribers moving in and out of coverage zones, and bring cellular broadband to approximately half of the world’s population who remain unconnected. Partners in this effort are leading global wireless infrastructure companies, including Rakuten Mobile, Vodafone and American Tower.
The company’s announcement this week caps a few busy months for AST SpaceMobile. Cogent Communications’ CFO, Sean Wallace, recently signed on as AST SpaceMobile’s new CFO. And the company signed a new Memorandum of Understanding (MoU) with Globe Telecom in the Philippines.
About AST SpaceMobile:
AST SpaceMobile is building the first and only global cellular broadband network in space to operate directly with standard, unmodified mobile devices based on our extensive IP and patent portfolio. Our engineers and space scientists are on a mission to eliminate the connectivity gaps faced by today’s five billion mobile subscribers and finally bring broadband to the billions who remain unconnected. For more information, follow AST SpaceMobile on Facebook, Twitter, LinkedIn and YouTube. Watch this video for an overview of the SpaceMobile mission.
References:
NTT’s IoT Services for Sustainability supported by new LoRaWAN low power network
Japan’s NTT has launched IoT Services for Sustainability, a new stack of products designed to help businesses advance progress against global sustainability initiatives and make data-driven decisions to reduce their carbon footprint through the intelligent use of IoT connectivity. These products include OCR Meter Reading, Water Leak Management, Predictive Maintenance and Environmental Monitoring.
- OCR Meter Reading is an on optical-based meter reader to provide near real-time data from any type of meter including water, electricity, and gas. The meter can also be used to read any type of gauge including pressure and temperature.
- The Water Leak Management technology provides real-time, IoT-enabled protection against water damage for smart spaces projects.
- The Predictive Maintenance platform collects data from sensors to create models that predict when events of interest might occur, including potential downtime, accidents or when something might need to be replaced.
- The Environmental Monitoring technology uses sensors to identify the presence of pollutants in the air and water as well as tracking temperature and humidity.
NTT’s IoT Services for Sustainability stack incorporates an IT/OT integration and support. This helps organizations to quickly see the benefits of the technology across the entire business following deployment. Benefits include energy cost savings, faster reduction in emissions, advanced operational excellence, and better work enablement across the organization. The stack of products is also supported by NTT’s new LoRaWAN network, and its catalog of sensors to measure, monitor and collect data to drive sustainability objectives.
“IoT technologies are an essential tool in the global fight against climate change,” said Jeff Merritt, Head of Urban Transformation at the World Economic Forum. “We know what actions are needed to build a more sustainable future and have a robust suite of technologies available to help deliver this impact. As the world looks to accelerate the implementation of these solutions, organizations like NTT will have a critical role to play in helping companies and governments capitalize on this opportunity,” he added.
This announcement follows the appointment of two industry veterans to drive growth and momentum across NTT’s IoT and sustainability initiatives. Wireless industry leader Devin Yaung has been appointed as SVP of Group Enterprise IoT Products and Services, NTT, bringing over 25 years of technology experience focused on business transformation. Vicky Bullivant has also been appointed as SVP, Group Sustainability, NTT, Bullivant has 25 years of creating and delivering successful sustainability, social, climate and ESG strategies that underpin commercial objectives in fast-paced and evolving business environments.
“Almost two-thirds (61.4%) of CEOs say they’re aligning business strategies to the UN’s Sustainable Development Goals. Yet only 2 out of 5 businesses have the solutions needed to meet the organization’s immediate objectives,” said Devin Yaung, SVP of Group Enterprise IoT Products and Services.
“Therefore, it is more critical than ever to prioritize and deliver sustainability solutions for our enterprise customers. Our new stack of solutions will help organizations reach their sustainability goals and improve operations across their business, whether it is reducing waste from manufacturing defects or understanding the carbon footprint of their supply chain. The use of IoT will empower businesses to make decisions in real-time, streamlining processes and transforming the overall sustainability of their business. We’re proud to be announcing this offering at such a critical time, and we look forward to driving change alongside our clients to create a more sustainable future.”
About NTT Ltd.
NTT Ltd. is a leading, global technology services company. To help our clients achieve their digital transformation goals, we use our global capabilities, expertise, and full-stack technology services delivered through our integrated services platform. As their long-term strategic partner, we help them enhance customer and employee experience, transform their cloud strategy, modernize their networks and strengthen their cybersecurity. And across their transformation priorities, we automate their business processes and IT, drawing insights and analytics from their core business data. As a global ICT provider, we employ more than 50,000 people across 57 countries, trading in 73 countries and delivering services in over 200 countries and regions. Together we enable the connected future.
Visit us at services.global.ntt
References:
https://www.telecompaper.com/news/ntt-launches-iot-services-for-sustainability-projects–1422921
IEEE/SCU SoE Virtual Event: May 26, 2022- Critical Cybersecurity Issues for Cellular Networks (3G/4G, 5G), IoT, and Cloud Resident Data Centers
This virtual event on ZOOM will be from 10am-12pm PDT on May 26, 2022.
Session Abstract:
IEEE ComSoc and SCU School of Engineering (SoE) are thrilled to have three world class experts discuss the cybersecurity threats, mitigation methods and lessons learned from a data center attack. One speaker will also propose a new IT Security Architecture where control flips from the network core to the edge.
Each participant will provide a 15 to 20 minute talk which will be followed by a lively panel session with both pre-planned and ad hoc/ extemporaneous questions. Audience members are encouraged to submit their questions in the chat and also to send them in advance to [email protected].
Below are descriptions of each talk along with the speaker’s bio:
Cybersecurity for Cellular Networks (3G/4G, 5G NSA and SA) and the IoT
Jimmy Jones, ZARIOT
Abstract:
Everyone agrees there is an urgent need for improved security in today’s cellular networks (3G/4G, 5G) and the Internet of Things (IoT). Jimmy will discuss the legacy problems of 3G/4G, migration to 5G and issues in roaming between cellular carriers as well as the impact of networks transitioning to support IoT.
Note: It’s important to know that 5G security, as specified by 3GPP (there are no ITU recommendations on 5G security), requires a 5G Stand Alone (SA) core network, very few of which have been deployed. 5G Non Stand Alone (NSA) networks are the norm, but they depend on a 4G-LTE infrastructure, including 4G security.
Cellular network security naturally leads into IoT security, since cellular networks (e.g. NB IoT, LTE-M, 5G) are often used for IoT connectivity.
It is estimated that by 2025 we will interact with an IoT device every 18 seconds, meaning our online experiences and physical lives will become indistinguishable. With this in mind it is as critical to improve IoT security as fastening a child’s seatbelt.
The real cost of a security breach or loss of service for a critical IoT device could be disastrous for a business of any size, yet it’s a cost seldom accurately calculated or forecasted by most enterprises at any stage of IoT deployment. Gartner predicts Operational Technologies might be weaponized to cause physical harm or even kill within three years.
Jimmy will stress the importance of secure connectivity, but also explain the need to protect the full DNA of IoT (Device, Network and Applications) to truly secure the entire system.
Connectivity providers are a core component of IoT and have a responsibility to become part of the solution. A secure connectivity solution is essential, with strong cellular network standards/specifications and licensed spectrum the obvious starting point.
With cellular LPWANs (Low Power Wide Area Networks) outpacing unlicensed spectrum options (e.g. LoRa WAN, Sigfox) for the first time, Jimmy will stress the importance of secure connectivity and active collaboration across the entire IoT ecosystem. The premise is that the enterprise must know and protect its IoT DNA (Device, Network & Application) to truly be secure.
Questions from the audience:
I am open to try and answer anything you are interested in. Your questions will surely push me, so if you can let me know in advance (via email to Alan) that would be great! It’s nice to be challenged a bit and have to think about something new.
One item of interest might be new specific IoT legislation that could protect devices and data in Europe, Asia, and the US ?
End Quote:
“For IoT to realize its potential it must secure and reliable making connectivity and secure by design policies the foundation of and successful project. Success in digital transformation (especially where mission and business critical devices are concerned) requires not only optimal connectivity and maximal uptime, but also a secure channel and protection against all manner of cybersecurity threats. I’m excited to be part of the team bringing these two crucial pillars of IoT to enterprise. I hope we can demonstrate that security is an opportunity for business – not a burden.”
Biography:
Jimmy Jones is a telecoms cybersecurity expert and Head of Security at ZARIOT. His experience in telecoms spans over twenty years, during which time he has built a thorough understanding of the industry working in diverse roles but all building from early engineering positions within major operators, such as WorldCom (now Verizon), and vendors including Nortel, Genband & Positive Technologies.
In 2005 Jimmy started to focus on telecom security, eventually transitioning completely in 2017 to work for a specialist cyber security vendor. He regularly presents at global telecom and IoT events, is often quoted by the tech media, and now brings all his industry experience to deliver agile and secure digital transformation with ZARIOT.
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Title: Flip the Security Control of the Internet
Colin Constable, The @ Company
The PROBLEM:
With the explosion of Internet connected devices and services carrying user data, do current IT architectures remain secure as they scale? The simple and scary answer is absolutely no, we need to rethink the whole stack. Data breaches are not acceptable and those who experience them pay a steep price.
Transport Layer Security (TLS) encrypts data sent over the Internet to ensure that eavesdroppers and hackers are unable to see the actual data being transmitted. However, the Router needs meta data (the IP and Port) to make it work. What meta data does the Data level Router have access to?
We need to discuss how to approach the problem and selectively discard, but learn from previous IT architectures so that we can build a more solid, secure IT infrastructure for the future.
Proposition:
I will provide a glimpse of a future security focused IT architecture.
- We need to move most security control functionality to the edge of the network.
- Cloud data center storage should be positioned as an encrypted cache with encryption keys at the edge.
- No one set of keys or system admin can open all the encrypted data.
When data is shared edge to edge we need to be able to specify and authenticate the person, entity or thing that is sharing the data. No one in the middle should be able to see data in the clear.
Issues with Encryption Keys:
- IT and Data security increasingly rely on encryption; encryption relies on keys; who has them?
- Is there really any point to VPN’s Firewalls and Network segmentation if data is encrypted?
- We use keys for so many things TLS, SSH, IM, Email, but we never tend to think about the keys.
- Do you own your keys? If not someone else can see your data!
- What do we need to flip the way IT is architected?
Recommendations for Keys:
- Keys should be cut at the edge and never go anywhere else.
- You should be able to securely share keys along with the data being transmitted/received.
- There needs to be a new way to think about identity on the Internet.
The above description should stimulate many questions from attendees during the panel discussion.
Biography:
Colin Constable’s passion is networking and security. He was one of the founding members of the Jericho Forum in the 2000s. In 2007 at Credit Suisse, he published “Network Vision 2020,” which was seen by some as somewhat crazy at the time, but most of it is very relevant now. While at Juniper, Colin worked on network virtualization and modeling that blurred the boundaries between network and compute. Colin is now the CTO of The @ Company, which has invented a new Internet protocol and built a platform that they believe will change not just networking and security, but society itself for the better.
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The Anatomy of a Cloud Data Center Attack
Thomas Foerster, Nokia
Abstract:
Critical infrastructure (like a telecommunications network) is becoming more complex and reliant on networks of inter-connected devices. With the advent of 5G mobile networks, security threat vectors will expand. In particular, the exposure of new connected industries (Industry 4.0) and critical services (connected vehicular, smart cities etc.) widens the cybersecurity attack surface.
The telecommunication network is one of the targets of cyber-attacks against critical infrastructure, but it is not the only one. Transport, public sector services, energy sector and critical manufacturing industries are also vulnerable.
Cloud data centers provide the required computing resources, thus forming the backbone of a telecommunications network and becoming more important than ever. We will discuss the anatomy of a recent cybersecurity attack at a cloud data center, review what happened and the lessons learned.
Questions:
- What are possible mitigation’s against social engineering cyber- attacks?
-Multifactor authentication (MFA)
-Education, awareness and training campaigns
- How to build trust using Operational Technology (OT) in a cloud data center?
Examples:
- Access monitoring
- Audits to international standards and benchmarks
- Security monitoring
- Playbooks with mitigation and response actions
- Business continuity planning and testing
Recommendations to prevent or mitigate DC attacks:
- Privileged Access Management across DC entities
- Individual credentials for all user / device entities
- MFA: One-Time Password (OTP) via text message or phone call considered being not secure 2-Factor Authentication anymore
- Network and configuration audits considering NIST/ CIS/ GSMA NESAS
- Regular vulnerability scans and keep network entities up to date
- Tested playbooks to mitigate security emergencies
- Business continuity planning and establish tested procedures
Biography:
Thomas Foerster is a senior product manager for Cybersecurity at Nokia. He has more than 25 years experiences in the telecommunications industry, has held various management positions within engineering and loves driving innovations. Thomas has dedicated his professional work for many years in product security and cybersecurity solutions.
Thomas holds a Master of Telecommunications Engineering from Beuth University of Applied Sciences, Berlin/ Germany.
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Video recording of this event: Critical Cybersecurity Issues for Cellular Networks, IoT, and Cloud-Resident Data Centers – YouTube
Previous IEEE ComSoc/SCU SoE March 22, 2022 event: OpenRAN and Private 5G – New Opportunities and Challenges
Video recording: https://www.youtube.com/watch?v=i7QUyhjxpzE
AWS, Microsoft Azure, Google Cloud account for 62% – 66% of cloud spending in 1Q-2022
New data from Synergy Research Group shows that Q1 enterprise spending on cloud infrastructure services was approaching $53 billion. That is up 34% from the first quarter of 2021, making it the eleventh time in twelve quarters that the year-on-year growth rate has been in the 34-40% range.
To the surprise of no one, Amazon AWS continues to lead with its worldwide market share remaining at 33%. For the third consecutive quarter its annual growth came in above the growth of the overall market.
Microsoft Azure continues to gain almost two percentage points of market share per year while Google Cloud’s annual market share gain is approaching one percentage point.
In aggregate all other cloud providers have grown their revenues by over 150% since the first quarter of 2018, though their collective market share has plunged from 48% to 36% as their growth rates remain far below the market leaders.
Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) were $52.7 billion, with trailing twelve-month revenues reaching $191 billion. Public IaaS and PaaS services account for the bulk of the market and those grew by 37% in Q1. The dominance of the major cloud providers is even more pronounced in public cloud, where the top three control 71% of the market. Geographically, the cloud market continues to grow strongly in all regions of the world.
“While the level of competition remains high, the huge and rapidly growing cloud market continues to coalesce around Amazon, Microsoft and Google,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “Aside from the Chinese market, which remains totally dominated by local Chinese companies, other cloud providers simply cannot match the scale and geographic reach of the big three market leaders. As Amazon, Microsoft and Google continue to grow at 35-50% per year, other non-Chinese cloud providers are typically growing in the 10-20% range. That can still be an attractive proposition for those smaller providers, as long as they focus on regional or service niches where they can differentiate themselves from the big three.”
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Separately, Canalys estimates global cloud infrastructure services spending increased 34% to US$55.9 billion in Q1 2022, as organizations prioritized digitalization strategies to meet market challenges. That was over US$2 billion more than in the previous quarter and US$14 billion more than in Q1 2021.
The top three cloud service providers have benefited from increased adoption and scale, collectively growing 42% year on year and accounting for 62% of global customer spend.
Cloud-enabled business transformation has become a priority as organizations face global supply chain issues, cybersecurity threats and geopolitical instability. Organizations of all sizes and vertical markets are turning to cloud to ensure flexibility and resilience in the face of these challenges.
SMBs, in particular, have driven investment in cloud infrastructure services to support workload migration, data storage services and cloud-native application development. At the same time, infrastructure hardware shortages and the threat of further price inflation has spurred many large enterprises to invest in large-scale, multi-year cloud contracts to lock in upfront discounts with the hyperscalers.
All the major cloud providers have seen a significant increase in order backlogs as a result, which now total several hundred billion dollars worldwide. This in turn is driving the importance of cloud marketplaces as a sales channel for third-party software and security, as businesses seek to burn down these cloud commitments, further fueling infrastructure consumption.
“Cloud has continued to be a hot market and transformation strategies are emphasizing digital resiliency to face the market challenges of today and tomorrow,” said Canalys Research Analyst Blake Murray. “To be effective in resiliency planning, customers are turning to channel partners with the technical and consulting skills to help them effectively embrace hyper-scaler cloud services.”
Top cloud partners are doubling down on certification efforts and skills recruitment around hyper-scaler cloud services.
Global systems integrators, including Accenture, Atos, Deloitte, HCL Technologies, TCS, Kyndryl, Tech Mahindra and Wipro, are building practices with tens of thousands of cloud engineers and consultants. This has also included acquisitions of cloud application development and migration specialists, as well as the launch of new dedicated cloud services brands.
Smaller consultants, resellers, service providers and distributors are pursuing similar strategies as mid-market and SMB customers also demand support with cloud adoption.
“As the use cases for cloud infrastructure services expand so does the potential complexity, and we see that hybrid and multi-cloud deployments are commonplace in the market,” said Canalys Research Analyst Yi Zhang. “The hyperscalers are investing in rapid channel development and partners are responding as the opportunities grow.”
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About Synergy Research Group:
Synergy provides quarterly market tracking and segmentation data on IT and Cloud related markets, including vendor revenues by segment and by region. Market shares and forecasts are provided via Synergy’s uniquely designed online database SIA ™, which enables easy access to complex data sets. Synergy’s Competitive Matrix ™ and CustomView ™ take this research capability one step further, enabling our clients to receive on-going quantitative market research that matches their internal, executive view of the market segments they compete in.
About Canalys:
Canalys is an independent analyst company that strives to guide clients on the future of the technology industry and to think beyond the business models of the past. We deliver smart market insights to IT, channel and service provider professionals around the world. We stake our reputation on the quality of our data, our innovative use of technology and our high level of customer service.
References:
https://www.canalys.com/newsroom/global-cloud-services-Q1-2022
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May 6, 2022 Update from Light Counting:
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ICPs (Internet Cloud Providers) have grown spending by double digit rates (year-over-year) for many quarters and Q1 2022 looks like it will be no exception, as the combined spending of Alphabet, Amazon, Meta, and Microsoft increased 29% versus Q1 2021. What is surprising though is that Alphabet, not Meta, showed the fastest growth, with a 65% increase to more than $9.5 billion, a new record. And Alphabet’s big increase was not fueled by spending on infrastructure however, but by the closing of purchases of office facilities in New York, London, and Poland, which the company said added $4 billion to total spending in the quarter. We expect Alphabet’s Q2 capex will return from the stratosphere to the $5 billion range it has been running at. If Alphabet’s real estate spending is removed, Q1 capex for the group of four was up only 15% compared to Q1 2021, at the low end of the typical range for the Top 15 ICPs. While ICP spending appears on track to continue growing at double-digit rates this year, Q1 revenues were decidedly ‘off’ for the four majors that have reported, with no records set, and two of the four (Amazon and Meta) growing sales by only single-digit growth rates y-o-y. |
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The Cloud services revenues of Alphabet, Amazon, and Microsoft continued to grow faster than overall company sales, increasing 44%, 37%, and 17% respectively.
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Network equipment makers sales growth in Q1 2022 declined by 1% y-o-y in aggregate among the reported companies, but this figure belies the fact that individual company growth rates ranged from strong double-digits (Adtran, ADVA), middling single-digits (Ericsson Networks, Infinera, ZTE), to sales declines (Nokia Networks, Ribbon Communications).
Five Chinese optical transceiver vendors have reported Q1 results, and four of them showed strong growth: HG Tech, Innolight, Accelink, and Eoptolink. CIG was negatively impacted by shutdowns in both Shanghai and Shenzhen, which affected its ability to fulfill orders.
Among U.S.-based optical component makers, Neophotonics reported Q1 2022 revenue of $89 million, up 47% year-over-year, with 400G and above products growing 70% y-o-y to $54 million. The company is now shipping production volumes of 400ZR modules to cloud and data center customers.
Two years after the start of the COVID-19 pandemic, the effects of the COVID mitigation measures continue to disrupt manufacturing, shipping, and sales in the optical industry. Several companies warned that shortages and higher component and shipping costs would persist or even worsen as 2022 progresses. And finally, costs from Russia’s invasion of Ukraine, and subsequent withdrawals from the Russian telecoms market are starting to become known, ranging from $5 million (Infinera) to 900 million Euro (Ericsson).
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BT and Toshiba commercial trial of a ‘quantum-secured’ metro network
BT and Toshiba have launched what they say is the world’s first “commercial trial” of a quantum-secured metro network (QSMN).
The QSMN infrastructure will be able to connect numerous customers across London, helping them to secure the transmission of valuable data and information between multiple physical locations over standard fiber optic links using quantum key distribution (QKD).
QKD is an important technology, playing a fundamental role in protecting networks and data against the emerging threat of cyber-attack using quantum computing. The London network represents a critical step towards reaching the UK government’s strategy to become a quantum-enabled economy
The QSMN is a three-node London exchange fiber optic ring using commercially available QKD hardware from Toshiba. BT provided fiber connectivity and “quantum-enabled” local exchanges.
Source: BT
German based optical network vendor ADVA is also involved in the QSMN. For the dedicated QKD “access tails,” BT used a commercially available Optical Spectrum Access Filter Connect (OSA FC) solution from Openreach, the UK incumbent’s infrastructure arm. OSA FC was developed by ADVA.
Financial services firm EY, the network’s first commercial customer, will use the network to connect two of its sites in London, one in Canary Wharf, and one near London Bridge. It will demonstrate how data secured using QKD can move between sites and will showcase the benefits this network brings to its own customers.
BT is working with EY (a non paying customer) and others that want to try QSMN to work out which types of QKD services will be in demand and how the business case might pan out. That initiative will likely be done over a three-year period,
“It’s a commercial trial in the sense that it’s built on commercial kit,” Professor Tim Whitley, managing director at BT’s applied research division, told Light Reading.
“It’s also a commercial trial in the sense that, unlike many trials around, it is effectively integrated in and part of a national operator’s communications infrastructure. It is managed out of our national operations center at Adastral Park.”
BT and Toshiba announced their commitment to creating a trial network in October 2021. BT will operate the network, providing a range of quantum-secured services including dedicated high bandwidth end-to-end encrypted links, delivered over Openreach’s private fibre networks, while Toshiba will provide quantum key distribution hardware and key management software. In the network, QKD keys will be combined with the in-built ethernet security, based on public-key based encryption, which will enable the resultant keys to be used to encrypt the data.
Some recent QKD history:
- BT and Toshiba have been conducting QKD trials since 2013, including a recent collaboration to provide a point-to-point QKD link in Bristol between the National Composites Centre and the Centre for Modelling & Simulation.
- In April 2020, Leo Lehman wrote an article about New ITU-T SG13 Recommendations related to IMT 2020 and Quantum Key Distribution.
- In September 2020, Verizon said it was trialing QKD for encryption over Fiber Optic Links.
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Howard Watson, CTO, BT stated: “Quantum-enabled technologies are expected to have a profound impact on how society and business operates in the future, but they are remarkably complex to understand, develop and build: in particular, ensuring that the end-to-end service designs meet the stringent security requirements of the market. I’m incredibly proud that BT and Toshiba have successfully united to deliver this unique network, and with EY as our first trial customer, we are paving the way for further commercial explorations for quantum technologies and their use in commercial, and societal applications in the future.”
Shunsuke Okada, Corporate Senior Vice President and Chief Digital Officer of Toshiba commented: “Both Toshiba and BT have demonstrated world-class technology development and leadership through decades of innovation and operation. Combining BT’s leadership in networks technologies and Toshiba’s leadership in quantum technologies has brought this network to life, allowing businesses across London to benefit from quantum secured communications for the first time.”
Preparation, technical deployment and testing for the network commenced in late 2021. This included equipment deployment in racks, adding security systems and resilience testing, and finally running and optimising the network. While Tuesday 26th April marked the official launch of the network, it has been running since early April, and will operate for an initial period of up to three years.
Praveen Shankar, EY UK & Ireland Managing Partner for Technology, Media and Telecoms (TMT), commented: “Quantum technology creates new and significant opportunities for business, but presents potential risks. Quantum secure data transmission represents the next major leap forward in protecting data, an essential component of doing business in a digital economy. Our work with two of the world’s leading technology innovators will allow us to demonstrate the power of quantum to both EY and our clients.”
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The UK Government’s “strategic intent” to develop a quantum-enabled economy was first published in 2020. It sets out a vision for the next 10 years in which quantum technologies will become an integral part of the UK’s digital backbone, unlock innovation to drive growth and help build a thriving and resilient economy, and contribute significant value to the UK’s prosperity and security.
The London network represents an important step to building a national network for quantum secured communications, which will stimulate the growth of a quantum ready economy in the UK.
Howard Watson continued: “This is a significant moment in the UK’s journey towards a quantum-enabled economy, but we’re not there yet. Further investment commitments will be required to broaden the study of quantum technologies that will contribute to this new economy, including quantum computing, quantum cryptography and quantum communications. We look forward to working with our government and industry partners to continue the momentum BT has started and shaping the UK’s quantum strategy.”
The technical collaboration for this network was conducted in BT’s Adastral Park labs in Suffolk, UK, and the Quantum technology Business Division of Toshiba, based in Tokyo, Japan and Cambridge, UK, where the quantum key distribution technology has been developed and is manufactured.
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References:
https://www.global.toshiba/ww/news/corporate/2022/04/news-20220427-01.html
Verizon Trials Quantum Key Distribution for Encryption over Fiber Optic Links
New ITU-T SG13 Recommendations related to IMT 2020 and Quantum Key Distribution
Bell Canada deploys the first AWS Wavelength Zone at the edge of its 5G network
In yet another tie-up between telcos and cloud computing giants, Bell Canada is the first Canadian network operator to launch multi-access edge computing (MEC) services using Amazon Web Services’ (AWS) Wavelength platform.
Building on Bell’s agreement with AWS, announced last year, together the two companies are deploying AWS Wavelength Zones throughout the country at the edge of Bell’s 5G network starting in Toronto.
The Bell Canada Public MEC service embeds AWS compute and software defined storage capabilities at the edge of Bell’s 5G network.
The Wavelength technology is then tied into AWS cloud regions that host the applications. This moves access closer to the end user or device to lower latency and increase performance for services such as real-time visual data processing, augmented/virtual reality (AR/VR), artificial intelligence and machine learning (AI/ML), and advanced robotics.
Source: Bell Canada
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“Because that link between the application and the edge device is a completely controllable link – it doesn’t involve the internet, doesn’t involve these multiple hops of the traffic to reach the application – it allows us to have a very particular controlled link that can give you different quality of service,” explained George Elissaios, director and GM for EC2 Core Product Management at AWS, during a briefing call with analysts.
Network infrastructure is the backbone for Canadian businesses today as they innovate and advance in the digital age. Organizations across retail, transportation, manufacturing, media & entertainment and more can unlock new growth opportunities with 5G and MEC to be more agile, drive efficiency, and transform customer experiences.
Optimized for MEC applications, AWS Wavelength deployed on service providers’ 5G networks provides seamless access to cloud services running in AWS Regions. By doing so, AWS Wavelength minimizes the latency and network hops required to connect from a 5G device to an application hosted on AWS. AWS Wavelength is now available in Canada, the United States, the United Kingdom, Germany, South Korea, and Japan in partnership with global communications service providers.
Creating an immersive shopping experience with Bell Canada 5G:
Increasingly, retailers want to offer omni-channel shopping experiences so that consumers can access products, offers, and support services on the channels, platforms, and devices they prefer. For instance, there’s a growing appetite for online shopping to replicate the in store experience – particularly for apparel retailers. These kinds of experiences require seamless connectivity so that customers can easily and immediately pick up on a channel after they leave another channel to continue the experience. These experiences also must be optimized for high-quality viewing and interactivity.
Rudsak worked with Bell and AWS to deploy Summit Tech’s immersive shopping platform, Odience, to offer its customers an immersive and seamless virtual shopping experience with live sales associates and the ability to see merchandise up close. With 360-degree cameras at its pop-up locations and launch events, Rudsak customers can browse the racks and view a new product line via their smartphones or VR headsets from either the comfort of their own home or while on the go. To find out more, please click here.
Bell Canada Public MEC with AWS Wavelength is now available in the Toronto area, with additional Wavelength Zones to be deployed in the future. To find out more, please visit: Bell.ca/publicmec
AWS currently has Wavelength customers (see References below) in the United States, the United Kingdom, Germany, South Korea, Japan, and now Canada. It also has deals with Verizon, Vodafone, SK Telecom, and Dish Network.
Bell Canada explained that the service is targeted at enterprise customers. It will initially offer services to enterprises in Toronto, with expansion planned into other major Canadian markets.
“We’re excited to partner with AWS to bring together Bell’s 5G network leadership with the world’s leading cloud and AWS’ robust portfolio of compute and storage services. With general availability of AWS Wavelength Zones on Canada’s fastest network, it becomes possible for businesses to tap into all-new capabilities, reaching new markets and serving customers in exciting new ways. With our help, customers are thinking bigger, innovating faster and pushing boundaries like never before. Our team of experts are with customers every step of the way on their digital transformation journey. With our ongoing investments in supporting emerging MEC use cases, coupled with our end-to-end security built into our 5G network, we are able to give Canadian businesses a platform to innovate, harness the power of 5G and drive competitiveness for their businesses.”
– Jeremy Wubs, Senior Vice President of Product, Marketing and Professional Services, Bell Business Markets
“AWS Wavelength brings the power of the world’s leading cloud to the edge of 5G networks so that customers like Rudsak, Tiny Mile and Drone Delivery Canada can build highly performant applications that transform consumers’ experiences. We are particularly excited about our deep collaboration with Bell as it accelerates innovation across Canada, by offering access to 5G edge technology to the whole AWS ecosystem of partners and customers. This enables any enterprise or developer with an AWS account to power new kinds of mobile applications that require ultra-low latencies, massive bandwidth, and high speeds.”
– George Elissaios, Director and General Manager, EC2 Core Product Management, AWS
“With Bell’s Public MEC and AWS Wavelength we are able to offer new, fully immersive shopping experiences to our customers. Shoppers can virtually explore our new arrivals and interact in real-time with our staff and industry experts during interactive events and pop-ups. Thanks to the hard work, support and expertise of Bell, AWS and Summit Tech, we were able to successfully deliver our first immersive/interactive shopping event with the quality, innovation and excellence that our brand is known for.”
– Evik Asatoorian, President and Founder, Rudsak
“Canadian organizations across all industries are transforming their workflows by harnessing the power of new technologies to launch new products and services. In fact, 85% of Canadian businesses are already using the Internet of Things (IoT). In order to maximize the benefits of cloud computing, intelligent endpoints and AI, while adding emerging technologies like 5G, we need to modernize our digital infrastructure to embrace multi-access edge computing (MEC). Modernized edge computing interconnects core, cloud and diverse edge sites, enabling CIOs and business leaders to optimize their architectures to resolve technical challenges around latency, bandwidth and compute power, financial concerns about cloud ingress/egress and compute costs as well as governance issues such as regulatory compliance without losing advanced features like machine learning, AI and analytics. MEC offers the possibility of deploying modernized, cloud-like resources everywhere to support the ability to extract value from data.”
– Nigel Wallis, Research VP, Canadian Industries and IoT, IDC Canada
- Bell is the first Canadian telecommunications company to offer AWS-powered public MEC to business customers
- First AWS Wavelength Zone to launch in the Toronto region, with additional locations in Canada to follow
- Apparel retailer Rudsak among the first to leverage Bell Public MEC with AWS Wavelength to deliver an immersive virtual shopping experience
Bell is Canada’s largest communications company, providing advanced broadband wireless, TV, Internet, media and business communication services throughout the country. Founded in Montréal in 1880, Bell is wholly owned by BCE Inc. To learn more, please visit Bell.ca or BCE.ca.
References:
AWS looks to dominate 5G edge with telco partners that include Verizon, Vodafone, KDDI, SK Telecom
Verizon, AWS and Bloomberg media work on 4K video streaming over 5G with MEC
AWS deployed in Digital Realty Data Centers at 100Gbps & for Bell Canada’s 5G Edge Computing
Amazon AWS and Verizon Business Expand 5G Collaboration with Private MEC Solution
European telcos need to address very high 5G energy consumption
by Angel Dobardziev, Senior Director at IDC (edited by Alan J Weissberger)
At this year’s Mobile World Congress in Barcelona, major wireless equipment vendors such as Ericsson, Huawei, and Nokia highlighted 5G portfolio announcements that emphasized the generation’s superior energy efficiency and sustainability, and indeed, recent IDC conversations with European CSPs underlined the fact that energy efficiency is a top priority for most network operations executives.
5G networks are incredibly high-power consumers (especially mmWave). They can provide downstream data rates of up to 1 Gbps at latencies of ~20ms to thousands of densely connected devices (smartphones, internet of things, machines, etc.). This massive performance uplift versus 4G is achieved with a powerful 5G RAN infrastructure that can include densely packed 64x or 128x massive MIMO (mMIMO) antennas (by comparison, 4G typically has 4x or 8x mMIMO antennas); denser network architectures with more cell sites in urban areas; and much “fatter” fiber backhaul/fronthaul networks that shuffle traffic between the RAN and core networks, among other things. These powerful features can make unoptimized 5G networks voracious energy beasts: a GSMA study cited Huawei research that 5G cell sites needed up to three times more energy than their 4G equivalents.
Of course, 5G networks support many new and existing energy-reducing features such as smart sleep mode, beamforming, C-RAN and a much more flexible architecture. These energy-saving elements make 5G a much more energy efficient technology per unit of mobile traffic versus 4G. This is a key point that is readily seized on by mobile infrastructure vendors to encourage CSPs to accelerate their 5G investments and deployments. But there is a bit more to the 5G energy and sustainability debate than just how efficient it is on a perbit basis or how much it can reduce carbon emissions in other industries.
First, mobile data traffic has been growing at more than 40% over the past few years and looks set to continue its exponential growth. In its latest mobility report, Ericsson estimates that global mobile traffic will increase by a factor of 4.6 over the next five years, from 80EB in 2021 to 370EB in 2027, 80% of which will be video related. So while 5G is much more efficient per bit, CSPs will move a lot more data bits through the air, which along with the higher density of base stations (due to higher carrier frequencies) will require a lot more energy than previous generations.
Second, mobile operators are deploying 5G networks on top of existing 4G (and often 3G and 2G) networks. Over a third of all mobile traffic in 2027 will still be carried over 3G and 4G networks. This means CSPs will typically have to spend on energy to power new 5G networks as well as existing 3G/4G networks in parallel for many years to come, which will also mean continued upward pressure on energy use and spend.
CSPs need to pull three 5G sustainability levers to address the energy issue:
IDC believes CSPs must ensure they lead the 5G energy and sustainability debate by focusing their efforts on three key areas:
- Establish C-suite accountability for accelerated 5G energy efficiency and sustainability
- Partner with 5G equipment vendors
- Define 5G sustainability impacts to stakeholders (regulators, investors, customers, partners) in a credible and realistic framework
While leading European CSPs, including Vodafone, BT, Telecom Italia, and Telenor have announced bold targets to achieve net-zero emissions by 2030, the task of reducing energy consumption in the short term almost entirely falls to network operations executives, whose agenda includes competing priorities of accelerating 5G deployments, maintaining network performance, lowering operating costs, reducing legacy network complexity, and supporting broader CSP transformation. Delivering more substantial energy savings requires concerted effort — and investment — to transform and upgrade network operations processes and equipment so they can minimize energy use per bit of traffic carried while maintaining or improving network capabilities and performance.
Such accelerated energy efficiency focus and investments need accountability from CSP C-suite executives to succeed. This is not always the case today given the current financial situation of the telco sector in Europe. A case in point is the switch to green and renewable energy to power mobile networks, including solar and wind, which often requires substantial focus and investment in new renewable energy infrastructures. For example, T-Mobile US announced in January 2022 that it reached its 100% renewable energy target at the end of 2021, one of the first in the world to do so. But this required a concerted effort over three years since it was announced in 2018 by then-CEO John Legere. At the time, the company said that this was not just the right thing to do, but it made excellent business sense, suggesting that it would save $100 million in energy costs in the next 15 years.
Second, CSPs must work much more closely with vendor partners, 5G equipment providers, and software vendors to improve the energy efficiency of equipment and monitor how they deliver on it. Leading 5G infrastructure vendors in Europe such as Ericsson and Nokia offer comprehensive energy optimization frameworks that focus on planning, deploying, and operating 5G networks to greatly reduce energy footprint without impacting performance. IDC is aware of only a few CSPs that have established commercial incentives for strict 5G energy efficiency targets on the equipment they procured to make sure vendors deliver on it. Some energy management specialist vendors can help with this task as well.
Finally, CSPs must take a decisive but realistic and credible position on potential of 5G for “downstream” energy reductions. These refer to energy saved and carbon emissions prevented in other industries via 5G use cases that can reduce carbon emissions. There is very little doubt that high-performing 5G networks are set to enhance existing use cases and enable new ones in different industries from manufacturing to transportation, energy, health, and agriculture that will minimize the need for people to move to specific locations and optimize the efficiency of assets, resources, and workforces in many ways depending on the vertical and enterprise. But the 5G downstream industry and societal impacts sustainability estimates must be realistic in order to be credible. There are, for example, highly optimistic estimates that 5G can help achieve a fifth of carbon reduction targets in some markets by 2025, even though many operators are just starting to get to grips with standalone access (SA) and network slicing technologies that are critical for many such use cases.
To sum up, sustainability will remain a major focus area for CSPs in 2022 and beyond and 5G networks’ energy use is a major issue in this debate. While European telcos net-zero goals to 2030 and beyond are worthy commitments, CSPs must clearly do more now. To this end, they can establish senior C-level accountability on this issue, work much more closely with vendor partners, and set realistic targets on downstream 5G sustainability gains.
About the Author:
Angel Dobardziev is a Senior Director at IDC and a judge of the World Communication Awards. He can be contacted at [email protected]
References:
Omdia: Enterprise edge services market to hit $214 billion by 2026
According to a new report by Informa’s Omdia, revenue from edge services (where EXACTLY is the edge?) will reach $214 billion by 2026. That’s more than double the current size of the enterprise edge services market, which will reach $97.0 billion in 2022, says Omdia. With a compound annual growth rate (CAGR) of 20.4%, North America is predicted to dominate with 41% of global revenue share between 2021 and 2026.
This Omdia report discusses the latest global enterprise edge services forecast including edge consulting, integration, network, security, storage/compute and managed edge services considering use cases, verticals and edge deployment models.
Enterprise edge services forecast by region, 2021-26 ($ billions)
Source: Omdia (owned by Informa)
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While hyperscalers build out edge access points and systems integrators (SIs) design consulting and professional services for edge use cases, enterprises are looking to service providers to define business cases, run pilot projects and scope out different approaches to edge computing use cases, according to Omdia.
The Informa owned market research group outlines two main consumption models for edge services.
- In one model, enterprises will need consulting, systems integration and other support services to deploy physical edge infrastructure.
- The second method is a cloud-based, as-a-service and fully managed approach, where services provided by hyperscalers and independent software vendors (ISVs) are extended to the edge using local access points or gateways.
Omdia sees several opportunities for network providers to assist enterprises with the challenges that arise from implementing their edge strategies. The firm notes that telcos can help enterprises navigate data location and management considerations; regulatory compliance; network considerations such as the need for and availability of 5G, WAN/LAN and private networks; selecting the right edge setup and location; balancing use of internal skills with managed edge services; defining clear business cases; and more.
Edge consulting services from SIs, telcos, ICT solutions vendors and consulting firms form the largest part of the enterprise edge services market at 39.3% in 2022, says Omdia. While cybersecurity and network management subscriptions from service providers are critical to edge service packages, these subscription-based telco services are declining over time, the research group adds.
However, fully managed, cloud-delivered edge services, including multi-access edge computing (MEC) and workload and database management, are increasing in popularity. Omdia predicts that edge storage and compute services will be the strongest area of growth, with the services emerging as cloud services extensions to the edge provided by major hyperscalers, service providers and data center operators.
“As data volumes continue to grow and enterprises aim to move more workloads to the edge, they require more compute and storage capacity in the form of IaaS and PaaS at edge access points,”Omdia explained.
Edge locations will also shift from customers’ premises (53% in 2022 and 38% in 2026) to PoPs (point of presence) such as cloud access points and to a lesser extent, data centers.
“By 2026, over a third of edge services revenues will be realized as part of PoP deployments, which provides key opportunities and challenges for ICT service providers,” says Omdia.
Emerging edge use cases
Edge use cases initially took flight in industrial applications and IoT use cases for worker safety, automated production lines, mining and logistics, explains Omdia. Over the next five years, the largest vertical forecasted to lead growth in edge services is the financial market, which could use AI-based analytics and cognitive systems for business decisions, market insight, risk assessment and customer service platforms.
Source: Omdia
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Additional edge service use cases, which network operators could deliver as managed services, include smart meters for energy use and environmental monitoring; transport and container tracking; customer behavior analytics in retail; network efficiency; and data protection compliance and cybersecurity.
What applications do enterprises expect to run at the edge?
Omdia recommends several approaches for service providers, SIs, hyperscalers and ICT solutions vendors to consider when working with enterprises on edge services. Suggestions include developing vertical and workload-specific edge services that can be largely replicated to different customers, creating innovation hubs for edge solutions to test edge setups with customers, developing consulting services and creating a partner ecosystem to reduce vendor lock-in for customers.
References:
https://omdia.tech.informa.com/OM024012/Enterprise-Services-at-the-Edge–Forecast-202226
The Amorphous “Edge” as in Edge Computing or Edge Networking?
Multi-access Edge Computing (MEC) Market, Applications and ETSI MEC Standard-Part I
IBM says 5G killer app is connecting industrial robots: edge computing with private 5G
ONF’s Private 5G Connected Edge Platform Aether™ Released to Open Source