Building a better CSP business case for Edge Cloud

What is the killer app. for edge?

In our discussions with CSPs, and their software providers, one conversation dominates all others; what are the use cases that will drive a business case to invest in edge cloud? In addressing this question we have been particularly impressed with the powerful tool from mobiledgeX that allows users to explore the use cases for edge cloud.

We believe that CSPs, and their suppliers, will miss the overall edge opportunity with an exclusive focus on use cases, and by inference the need for “killer apps” to drive their business cases. CSPs will build and make investments for those use cases; they will not create and own a new Edge Cloud market.

In our 2018 report ROI at the edge we looked at the ROI for CSP edge to support enterprise applications. We found it was difficult to make a business case for this type of edge, beyond roll out to regional edge data centers. In terms of latency (the key edge technical differentiation), these would be barely differentiated from in-country data centers from public cloud providers. Given the existing market dominance and efficiency of the public cloud providers this is not a strong starting point for market success.

The success of cloud is about hard economics. Edge cloud needs to replicate this.

Appledore believe that the success of Edge Cloud will be about replicating the key success factors of public cloud at the edge:

• increased multi-tenancy;
• lowered average power and environment costs;
• massive increase in automation and lowered operational cost.

With these in place the environment will be there for existing applications and new innovative applications to consume edge cloud.

In the same way that an online bookshop spawned a cloud infrastructure giant, CSPs have the opportunity to lead the equivalent edge cloud from their starting position as network providers.

To succeed the CSPs need to shift their thinking beyond specific use cases to look at the whole edge market. Edge cloud will need to be available at scale, with high coverage and most importantly be application neutral. All of these can be provided by CSPs, but they can also be provided by others, using commoditized connectivity from CSPs. However, by actively combining connectivity with compute at the edge we believe that CSPs have a truly differentiated position.

In our most recent report on Edge Cloud we look at how CSPs can leverage the combination of Edge compute and 5G to create a truly unique edge cloud market proposition. The report explores how CSPs can replicate the investment success of public cloud at the edge, with an underlying “cloud native” business case. In particular, we consider how CSPs can use the diversity of connectivity available from wireless network to drive savings in edge cloud power and environment costs and increase edge cloud multi-tenancy.