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Edge computing, which locates services closer to consumers and data sources, can help enable applications and use cases in which real-time processing, low latency, and a corresponding boost in the Quality of Experience (QoE) are critical.

In our previous post, Industry trends from the ever evolving service provider edge, we noted that service providers (SPs) are in an ideal situation to take advantage of the edge computing shift. Along with their traditional strengths in building networks, connectivity, physical location(s), and existing data consumption and management models, SPs are well positioned to develop partnerships and ecosystems to create new revenue streams.

Introduction and technology drivers

Service Providers have made great strides to establish network flexibility for new applications that require agility in how they sync up with their infrastructure resources—accommodating fluctuations when and where they create peak traffic demands. The resources (bandwidth, processing cycles) consumed by each application vary, differing in how much memory and storage they need. SPs have utilized virtual system infrastructure deployments to meet these requirements most efficiently. 

As SPs support new architectural frameworks that expand capabilities in 5G and Internet of Things (IoT), they can find more opportunities to implement edge computing and develop their partner ecosystem. 

  • 5G support - From an architectural point of view, 5G creates a wide range of impacts on service deliveries, including new functionalities at the network edge. Aspects of 5G that will contribute to service providers using cloud-based, software-driven infrastructures in edge deployments include:

    • The introduction of virtual radio access networks (vRANs) to the network virtualizing control for multiple radio infrastructures to simplify network operation. Radio controls will be supported in pools of cloud-based, software driven resources at locations in 5G network edges.

    • Deploying networks using the architectural framework known as control and user plane separation (CUPS). CUPS takes advantage of the agility and elasticity of virtualization by allowing operators to optimize platform resources according to the requirements of their services.

  • IoT Applications – Applications with low-latency processing dependencies are creating requirements for cloud-based infrastructures at the edge. Because of the sheer number of systems that are required to be closer to application users, it's important to keep per system costs at a minimum. 

  • Additional applications

    • Virtual Reality/Augmented Reality  – Retention of immersion in the application is crucial to quality of experience, due to bandwidth/latency challenges.

    • Video streaming or consumer generated video – Large data volumes being manipulated necessitating proper bandwidth and latency reduction.

    • Applications heavily dependent on near real-time input and responses such as geographically distributed gaming, and remote medicine/surgery.

Economic incentives for creating the new virtual edge 

Service provider motivations to invest in edge deployments can be linked to opportunities to earn new revenues and profits–and reduce costs associated with data transport and operational efficiencies. The network edge represents a majority of the operator’s capital and variable expenses, and therefore is a key area of interest for network modernization efforts.

Evolving markets are the main reason for pursuing new edge plans, and include: 

  • Ongoing growth of mobile data traffic for the foreseeable future led by video and IoT 

    • Streaming video, gaming, social media, ecommerce, email and search applications are compelling drivers in adoption of smart mobile devices (including tablets and wearable technology). A large proportion  of traffic in mobile networks will exist in the form of video (live broadcast, content streaming, user-generated video calls, etc.), and consumers have shown willingness to spend on consumer value-added applications. 

    • Mobile network-based IoT connections are expected to reach billions of devices connected to cellular IoT applications. 

  • Anticipated adoption rates for 5G network services - A significant portion of mobile data traffic worldwide is expected to be carried on 5G. 

    • Applications that will be generating new revenues, and the supporting network functions for expanded services, may not be possible without service providers enhancing their infrastructures with additional edge technology. Traditional networks, with limited capacities and speeds, are subject to much higher demands as data volumes increase, and face scalability and performance issues.

  • Lower total cost of ownership (TCO) and higher return on investment (ROI) - Implementations using cloud-native, openly-architected, software-driven platforms have regularly shown significant reductions in operating expenses and TCO reductions (OPEX and CAPEX), making new edge deployments viable.

Service providers avoid commoditization and explore ecosystem opportunities

Service providers see emerging markets and revenue opportunities which extend beyond mere connectivity, and are those of a value-added nature. They speculate that current business models will be unrecognizable within the next decade and expect ecosystems to be the change agent, but do not believe they have the capability and experience to build them out to realization. 

Ironically, the telecommunications industry is better positioned than others to drive value through ecosystems (or partnerships), based on compatibility factors like vision, culture, and technology fit. 

The precise strengths of the service providers - trust, reliability, and proven infrastructure – will facilitate the establishment and expansion of ecosystems and participants, particularly in the 5G and IoT realms. Building on this longtime trust in connectivity and data provisioning, service providers can move up the applications stack with ecosystem and application developer participants, by leveraging existing infrastructure complementing cloud computing with low-latency, QoE-enabled solutions. 

If service providers leverage established competencies in highly reliable connectivity services, they can best position themselves as a go-to industry resource and end-to-end data integrator in addition to acquiring clear understanding of participants’ value chains, and their potential for additional multi-vertical value. 

Ecosystem opportunities exist for B2B and B2C participants

Fortunately, service providers are well acquainted with value chain buildout and offering current implementations to a variety of entities in mutually beneficial relationships. A continuation of this approach,utilizing an edge computing services architecture, is a natural extension. To illustrate, consider the delivery of value-add services such as data analytics in addition to edge access, or services centered on proactive asset maintenance.

The potential audience to make use of  Service Provider offered benefits can span the entire ecosystem of applications providers, network operators, enterprises, and finally, services offered directly to consumers/customers. Ensuring greater openness allows new and more capable ecosystems to emerge, and new, more efficient business models to develop. 

Business-to-business (B2B)

New forms of consumption already being served are ideal for utilization within edge computing architectures. Two potential examples:

  • An operator could develop a service product for public cloud providers based on a low latency edge tenancy supported within the service provider network. The public cloud provider, with established channels into the enterprise, could offer its own X-as-a-service capabilities to those enterprises.

  • Content Delivery Network (CDN) providers   - as an alternative to the points of delivery (PODs) supported by CDNs, the service provider could offer a tenancy within their network so the CDN provider could build their POD at a low-latency location. This approach is of significant value to the CDN provider and capture of revenue for the service provider.

  • Additional B2B / Enterprise space customers might include:

    • Gaming, Augmented & virtual reality vendors. 

    • Mobile virtual network operators and their enablement platforms. 

    • Connected car vendors. 

    • IoT-connected device platforms.

    • Public cloud provide.

  • Well-suited enterprise applications:

    • Equipment monitoring.

    • Security services.

    • Fleet vehicle diagnostics.

B2C offerings 

Application developers and content providers can benefit from closer proximity to subscribers and real-time access network data to provide a superior user experience.

Consumer video is the most prominent example of this type of product opportunity, since video streaming QoE benefits most directly from low latency to the subscriber.

A mobile service provider could enable their Radio Access Network edge to partners creating and deploying innovative new applications and services to consumer (or business) mobile subscribers. This approach which reduces the load on the operator’s core network could be a much less costly way to host applications and services.

Service providers can accommodate multiple consumers with "edge suitable" applications, which could include:

  • Smart home automation.

  • Multi-player gaming.

  • Connected cars and autopilot.

  • Augmented reality.

  • Autonomous ride sharing.

  • Virtual reality social platforms.

  • In-store engagement.

  • Autonomous delivery.

  • Onsite spectator entertainment.

The service provider’s ecosystem approach

The service provider’s traditional strength of connectivity offers a predefined and trusted "calling card" as they attempt to expand upon development of an ecosystem, which can capture larger partnership opportunities and new revenue streams. Their well-known interactions with government, media and analysts, investors, suppliers and current partners allows SPs the ability to place themselves amidst both enterprise and consumer-centered relationships. 

With potential developers teaming with product ideas and business models, SPs can forge affiliations that allow all to benefit from past expertise—with a corresponding reduction in business and technical risk—forming a business-to-developer partnership that amplifies value for each. 

 1. Expand connectivity capabilities to succeed in an edge environment built on trust 

  1. Maximize and feature new access technologies—and position future connectivity—to illustrate readiness for 5G and IoT use cases. Service providers should continue the admirable strides achieved in running network software in virtualized environments on general purpose hardware, rather than on specialized components. Similarly, networks are virtualizing their vRAN, which lowers costs and allows easier upgrades and scaling. 

  2. The service providers have a responsibility to secure the edge core network while industry partners bring compliant enterprise-grade secure solutions. Generally, service providers have not publicly experienced data privacy issues and breaches to the extent of some of the technology platform players. 

  3. Capitalize on agile mindsets and working methods – new areas of development with fast innovation cycles require new ways of operating.

2. Assume a platform facilitator role 

  1. Moving beyond connectivity, and by transferring core expertise to the edge, service providers can become a matchmaker for B2B and B2C players who want to monetize their own data or access relevant data sources. 

  2. SPs can establish a joint innovation space for businesses and developers, an open but secure environment to inspire confidence in experimentation and confidentiality.

  3. SPs should remain industry-agnostic without exhibiting favoritism in certain verticals to retain flexibility and maximize future options. Additionally, they should consider approaching companies that may have been seen as competitors in the past—expanded relationships can allow progression to new technical and business models more rapidly. 

Looking ahead 

Although technical solutions are able to keep pace with the current challenges, there is no way to predict the progression of future innovations, or what solutions will arise to address them. Additionally, partner ecosystem development is important, especially to amortize service provider infrastructure investments – including those facilitating edge-computing services. These considerations only heighten the need to provide solutions from a position of flexibility, and standardized operational environments, so that a myriad of operators and partners can provide and combine their value-added services, seamlessly. 

Because no single vendor has the ability to claim a complete end-to-end edge computing solution, the continued ascendance and utilization of the open source movement is especially well suited to ensure open and interoperable solutions currently and in the future. This will permit service providers the progress toward becoming frictionless enablers of edge computing advanced applications, and migrate up the value chain beyond connectivity and data transport—whether the resulting service is provided by them alone, or is a composite put together by multiple partners.

To enable new edge computing use cases, Red Hat participates in our products’ upstream open source communities like Kubernetes, OpenStack, and Fedora. Combined with our portfolio of products, our collaboration with forward-looking projects can equip service providers with expanded knowledge and an ecosystem to better serve customers in the edge computing market. 


About the author

As a Principal Product Marketing Manager, Sidney Kriger develops a content strategy that shows how Red Hat solutions can help telecommunications service providers meet the challenges of digital transformation. He has more than 20 years of experience in the telecommunications industry, having previously worked at Cisco and Nortel Networks.