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Intelligence brief: Entering the edge compute era

Intelligence brief: Entering the edge compute era

Author: Silvia Presello

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Edge computing has become something of a buzzword in the telecoms and tech industry. But why is edge computing important, and why are we talking about it now?

A recent study published by GSMA Intelligence and the Automotive Edge Computing Consortium (AECC) suggests advances in wireless technologies and businesses undergoing digital transformation are driving investments in edge computing. This is putting edge computing back in the spotlight. To provide a view of what is happening, GSMA Intelligence surveyed 400 executives across five groups from across the value chain: operators, cloud providers, vendors, systems integrators and car manufacturers.

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Why it matters

Edge computing enables computing resources, such as those for storage and networking, to also run at the edge of the network instead of just in centralised public/private clouds. Through edge computing, AI/ML is deployed near the end user, enhancing the functionality of Internet of Things (IoT) and connected devices. Centralised clouds need the edge to unlock the full potential of AI/ML and leverage the vast amount of data generated by the increasing number of IoT connections. By 2030, there will be around 38 billion IoT connections that will need the edge with embedded AI/ML to run automation. Cellular connectivity is crucial for IoT use cases involving mobile assets such as cars, trains and trucks, making edge computing increasingly relevant to the 5G monetisation story.

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Investment plans and strategy

The survey  demonstrates that overall sentiment towards edge technology is positive. Some 73% of survey respondents claim they will increase their year-on-year investments in edge computing. The medium increase across the ecosystem compared to the previous 12 months is expected to be 10–15%. This reflects that edge computing is becoming increasingly strategic for enterprise sales success.

Figure 1: A medium investment rise of 10–15%

Source: GSMA Intelligence

Revenue gains realised from deploying edge computing in connected vehicles are forecast to rise considerably over three years, with 15% of car manufacturers expecting to generate an uplift of 16–20%. Rising demand for connected vehicle services such as mobility-as-a-service, HD mapping, V2X, and other security applications is spurring growth in edge computing across the sector.  As well as automotive and transport, edge computing is becoming more widespread in sectors such as consumer electronics, media and smart cities. The growing popularity of the metaverse, remote operations, collaboration, e-games and e-sports is driving adoption of edge computing in consumer electronics.

Figure 2 Top industry verticals driving demand for edge computing

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Outlook

The survey results suggest the main responsibility for bearing the costs of edge network deployment is placed on operators, reflecting that most of the edge costs are related to infrastructure. However, operator revenue growth is still mostly in the low single digits, and the cost of capital is above net income margins, posing headwinds for investments. No single player can deliver full edge computing network capabilities to enterprises or navigate alone the challenges that come with innovative technology. Partnerships will therefore be a key success factor. A host of partnerships with operators have already come about to this end.

Reports assessing edge computing are now online click here