Defining the market for edge and edge cloud

23 December 2019 |  Roy Illsley, Distinguished Analyst, Ovum

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The definition of the market in edge computing is not as simple as it first sounds. Currently, many consider the edge to be a device with compute and storage in a remote location like a mobile phone mast or retail outlet. While this is the edge, it is really just the beginning of the edge as, as technologies such as application-specific integrated circuits (ASICs) evolve and put more intelligence into devices, the edge moves out closer to the consumer or sensor. However, the market in edge computing will consist of several layers (hardware, connectivity, orchestration, marketplace, operational management) with devices/infrastructure and connectivity representing the base layers. 

Edge computing market will consist of several layers:

  1. Hardware
  2. Connectivity
  3. Orchestration
  4. Marketplace, and 
  5. Operational management.

The next three layers in Ovum's opinion are the most relevant to enterprise customers, and where the fastest growth will be due to the larger and more diverse supplier-base looking to move into edge computing.

Hardware at the edge 

Ovum expects that the edge will initially come in two main types; the near edge, and the outer edge. The near edge will be based on traditional servers, storage, or hyper-converged infrastructure (HCI) devices and be remotely managed, but hardware incidents will require a physical presence. The outer edge will evolve along two different directions. Firstly, gateway devices will be developed as fully managed devices with ASICs working alongside low powered x86 chips and SSD storage. These devices will be fully connected through bonded connections of mobile (4G and 5G) and other networks. Secondly, gateway devices will be developed as completely immutable and will be self-managing, being physically replaced if/when upgrades are required.
The edge will initially come in two main types; the near edge, and the outer edge. 
 
It is likely that both approaches for the outer edge (fully managed software-based solutions and self-managed hardware-based solutions) will proceed as use-cases demand. The impact is that organizations will need to change their management processes to significantly expand their physical device management capabilities.

Connectivity

Edge devices need to connect to either form a local cloud, or connect back to a regional/global cloud – depending on the type of workload and its specific requirements such as latency etc. This layer is where the telcos and cloud service providers (CSPs) can expect to see significant business opportunities. 
The introduction of 5G will act as a catalyst for this layer, providing different options to traditional networking solutions.
 

Orchestration

This is the key layer that delivers a standard platform to enable CSPs or enterprise customers to connect and have access to services/applications that can run at all of the edge locations.

This aspect of management is focused on how it enables services to execute and connect, orchestrating the applications, resources, and service delivery. Ovum expects this layer to be an expansion of the multicloud management market, which, according to Ovum's forecasts (Software Market Forecasts: Infrastructure, 2017–22) will be worth $11bn by 2022.

Marketplace

This layer is where the biggest market opportunity exists.
 

This layer is where the applications can be discovered and accessed by customers to run workloads at the edge. The key development in this layer will be the different types of application being deployed at the edge. Ovum considers that these applications will initially be focused on those markets where edge is most mature, but if the edge is to become more ubiquitous then the application layer is critical to driving edge adoption. 

In Ovum's opinion, this layer is where the biggest market opportunity exists as ISVs will want to ensure they have solutions that enable the connection of edge to core applications delivering an integrated solution.

Operational management

This layer is how the enterprise customers or CSPs can manage the entire cloud environment from a cost, service quality, and performance perspective. This layer, although part of the edge total available market, is more likely to be an extension of the existing operational management market. The UK government's ability to use data to shape public policy and deliver better outcomes for citizens remains predominantly aspirational. To date, the government's focus has been on transparency and open data, preferring to leave the thorny issue of inter-agency data sharing alone. However, the UK is now tackling this issue head-on with the Digital Economy Bill.

Economies, services and the general lifestyle are becoming more digital, connected and automated. Digital businesses in Asia Pacific (APAC) will face a proliferation of connectivity from new IoT, 5G digital cellular and smart city networks, which will heighten experiences of the Internet, online entertainment, mobile applications, multi-platform payments and more.

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