Skip to main content

Distributed Edge Computing Vendors Adapt to Change

The 5G edge network value chain of players has an upside opportunity to generate new revenue and gain visibility in a market that includes IT data center companies, enterprise end verticals, public cloud service providers, and content delivery network (CDN) providers.

5G edge networks will play a key role in unlocking the commercial potential of new use cases such as private wireless communications. According to the latest worldwide market study by ABI Research, 5G private networks revenue will grow from $1.6 billion in 2021 to $65 billion in 2030, with a Compound Annual Growth Rate (CAGR) of 60.1 percent.

5G Edge Network Market Development

"With 5G edge networks, every enterprise engagement is a custom job. Consequently, communications service providers (CSPs) and vendors seek to establish business models that are governed by different KPIs, both technical and commercial," said Don Alusha, senior analyst at ABI Research.

This opportunity stands in contrast with product-led solutions that fit well with mass-market, country-specific or region-specific subscriber models. 5G edge network deployments mark the industry's first focus on business evolution and integration with vertical industries.

To that end, tier-1 service providers such as AT&T, Telefonica, Verizon, and Vodafone -- and their infrastructure supplier vendors such as Ericsson, and Nokia -- are establishing enterprise business units.

Moreover, public cloud hyperscalers like Amazon, Google, and Microsoft are taking a strategic approach with new solutions aimed at unlocking the value of 5G and edge computing networks.

"CSPs own edge infrastructure that holds potential in terms of local compute and low-latency connectivity, but they have limited cloud experience. Cloud providers are agile and innovative. With the right collaboration arrangements in place, there is no reason why 5G edge computing cannot yield value for all parties involved," says Alusha.

At present, however, nobody can accurately predict where this market is going to evolve. It will be a captivating journey to see how different parties collaborate and co-create to unlock the value of the 5G edge networks being built today.

According to the ABI assessment, 5G edge networks face several key barriers that could impact market maturity. The business cases remain a key area where further work is required from the industry at large.

The business case for advanced use cases depends on the market’s appetite for 5G edge networks and enterprise desire to modernize their operations. Furthermore, the technology ecosystem for edge computing is immature. It will take time to re-engineer existing hardware and software for highly distributed, space- and resource-constrained edge locations.

A good starting point to drive ecosystem maturity is for the industry to acknowledge that building a 5G edge network is the first step. The second step is to figure out how to best integrate these new technologies into enterprise verticals’ business processes.

Outlook for 5G Edge Applications Growth

"That may not be a matter of technology but a matter of the degree of effort required to initiate service convergence and a process change that spans marketing, sales, product design, and so on. This strand remains the topic of much discussion in the industry," Alusha concludes.

That said, I believe IT vendors who are prepared for the distributed edge computing opportunity will demonstrate their ability to proactively help customers uncover the most compelling use cases, and then assist those enterprise buyers to create the required business case for CFO and CEO consideration.

Besides, every new IT investment must compete with a variety of other vendor proposals that CIOs and CTOs will consider as potential projects. Return on investment (ROI) comparisons and the promise of associated business outcomes will drive the customer decision-making process. A vendor's professional service organization will likely have a key role in this complex procurement process.

Popular posts from this blog

Digital Transformation Investment at $3.4 Trillion

Business technology leadership matters. Across the globe, more leaders have been pursuing bold Digital Transformation (DX) initiatives with the goal of creating new sources of business value through digital products, services, and experiences. As an additional benefit, the COVID-19 pandemic revealed that digital transformation efforts improve an organization's resilience against global market disruptions. Global DX investment is forecast to reach $3.4 trillion in 2026 with a five-year compound annual growth rate (CAGR) of 16.3 percent, according to the latest worldwide market study by International Data Corporation (IDC). Digital Transformation Market Development "Despite strong headwinds from global supply chain constraints, soaring inflation, political uncertainty, and an impending recession, investment in digital transformation is expected to remain robust," said Craig Simpson, senior research manager at IDC . The benefits of investing in DX technology -- including aut

Artificial Intelligence for National Border Security

National border protection agencies are under pressure to provide the highest level of security in the face of growing threats, such as increasing illegal migration and international terrorism. Now, government agencies are embracing advanced border security technologies to aid in effectively and reliably securing national borders. These solutions look to detect and identify potential threats and prevent them from escalating to a point that may jeopardize security. Security Surveillance Market Development Traditional border security patrols and Closed-circuit Television (CCTV) surveillance systems aren't adequate protection, and agencies must increasingly deploy new solutions to stay ahead of criminals and other potential threats to ensure the safety of a country’s borders. According to the latest market study by Juniper Research, the value of the border security technology market will exceed $70 billion globally in 2027 -- that's rising from $48 billion in 2022. Growing by 47 p

How to Apply Sustainability to Drive Value Creation

Global climate change policy initiatives have been an emerging topic for CEOs and their leadership teams, as they look to the future. Many organizations are preparing to play their part and help reduce carbon emissions. Eighty-seven percent of business leaders expect to increase their organization’s investment in sustainability over the next two years, according to the latest worldwide market study by Gartner. Customers are the stakeholder group creating pressure for these organizations to invest or act on sustainability issues -- selected by 80 percent of executives, followed by investors (60 percent) and regulators (55 percent). Sustainability Market Development "Sustainability enables businesses to cope with disruption," said Kristin Moyer, VP analyst at Gartner . "Economic uncertainty, geopolitical conflict and escalating materials and energy costs are forcing businesses to reexamine all forms of expenditure." According to Gartner, this focus on essentialism --