Raymond Liao

10 February 2021

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As telecom operators reimagine their networks to take advantage of 5G and edge computing, they are trying to determine which customers will be most valuable and which applications will drive the most demand.

In a panel discussion at Edge Global Week, I joined a group of executives from IBM, Cox Communications and HTC to discuss how telecom providers can “get an edge” on the edge.

Some key takeaways from that conversation validated a lot of what we already believe: that short-term opportunities for 5G edge computing will be driven by enterprise IT, that the long-term success will rely on consumer-facing killer apps like gaming and VR, that operators can benefit from working with and listening to developers, and that open source will be fundamental to innovation in the space.

The opportunity for enterprise IT on the edge

Telecom operators recognize that edge computing offers them an opportunity to move beyond just being a dumb pipe for data. To fully capitalize on the chance to go from being an infrastructure or service provider to being an applications provider, however, they must first understand what those killer apps are and embrace them.

In the short term, enterprise use cases will likely drive adoption of edge computing. Rob High, the CTO for Edge Computing at IBM, says a lot of early interest in edge computing he’s seeing has been from enterprises that are not necessarily driven by what are doing.

“Enterprise organizations, independent of their relationship with network providers, are forging ahead to use edge computing to advantage their business and their business processes,” High said.

According to High, hyperscalers have an advantage in this market with their cloud-out architecture, while telcos have an edge with the edge-in architecture. In wake of the COVID-19 pandemic, demand is accelerating as enterprise clients advance their digital transformations.

Telecom operators have an opportunity to benefit from enterprise interest in part due to the transformation within their own networks. Thanks to the separation of the control plane and the data plane, as well as the adoption of open source in the core software market and open APIs in the radio access market, telco networks are becoming very similar to enterprise campus networks. With workforces becoming increasingly distributed in the wake of COVID-19, telcos could become the providers of a “virtual” campus network for large enterprises.

Gaming and VR could be killer apps for consumers

In the longer term, telecom providers are looking for massive consumer-facing opportunities enabled by edge computing and 5G networks. One of those potential killer apps could be gaming.

Several gaming companies and online service providers have already introduced their own cloud gaming services, but those services can be hampered by low bandwidth or high latency, which 5G and edge services can solve. As a result, Dennis Chan, the Assistant Vice President of OTT and ICT Business at HTC, said his firm is seeing a lot of interest from the gaming industry.

“Gaming may be a driver because we are talking to several different gaming companies,” Chan said. “They are eager to work with different telcos to put… the game server in the mobile operator network, so that they can... serve the end user.”

Nancy Li, who is the director of Edge Platforms at Cox Communications, agreed and added that virtual reality could provide another opportunity for telcos.

“It is a nightmare if you wear VR goggles but have a huge delay, it's totally not acceptable. Introducing edge computing can definitely help us to improve the latency,” she said. “Lag is the gamer's worst nightmare.”

Telcos benefit from a developer-first approach

While edge computing will create new opportunities for telcos to expand their enterprise businesses, those same companies could also benefit by working with developers and smaller startups.

Cox Communications’ Nancy Li noted that her team did some research and found that developers represent more than 50 percent of revenues for hyperscale cloud providers like AWS and Azure today. According to Li, that research shows that any telco entering the space will need to take a proactive approach to the developer market.

“From there we can actually gain more than revenue opportunities, we can gain lots of customer feedback,” Li said. “They fail fast and learn fast. They quickly provide feedback to us so that we can be very agile and build the best product for our customers.”

Open source is the key to edge innovation

The edge computing opportunity is massive, but it will require cross-industry collaboration in order to be successful. Because of that, developing standards everyone can agree to will be an important part of gaining widespread adoption.

“I think what's key about open source is the creation of open standards and communities of common interests that will rally around a common theory of computing on which we can build up strength in that ecosystem,” IBM’s Rob High said.

What’s important is not just that open standards are being developed, but that they have buy-in from key industry stakeholders. High noted that if you look at some of the vendors involved with the Linux Foundation’s LF Edge-related standards, those open source projects are essentially becoming the de facto standards for the industry.