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Edge computing opportunities for telecom providers

Compatibility issues and the initial limited release of 5G have hindered edge computing adoption. But widescale 5G rollouts, advances in AI and new use cases could drive deployment.

After years of relentless marketing, telecom providers agree: Edge computing hasn't lived up to the hype. Splashy partnership announcements from hyperscale cloud providers, vendors and operators delivered smaller-than-anticipated results.

The history of edge computing traces back to the introduction of content delivery networks in the 1990s. The concept was straightforward: place servers close to end-user locations for faster cached image and video transmission. The advent of technological advances, such as streaming, AI and 5G, brings new life to the idea of moving processing and storage closer to content creation and consumption.

Telecom operators envisioned edge computing as a way to monetize 5G to deliver big dividends. 5G could make edge computing a preferred way to cut transit between the premises and the cloud and reduce network traffic volume. Edge computing could facilitate new applications for use cases that are resource-intensive and require low latency, such as gaming and analytics.

Edge computing challenges

The crux of the challenge with edge computing is how telecom operators and service providers marketed it. Operators and service providers led with the concept rather than the customer need, which means they neglected to develop the infrastructure. This resulted in inconsistencies and deployment issues.

Below is a breakdown of some of the challenges around edge computing:

  • Limited 5G rollout. 5G is a core part of edge computing, but the hyperpromotion of edge computing preceded 5G's widespread availability. The lack of network reliability for edge computing deployments led to some disappointment from early adopters and drained enthusiasm for mainstream use cases.
  • Compatibility issues. Edge computing typically requires hardware and software from multiple vendors. The lack of standardization and subsequent interoperability and integration challenges have also hindered adoption and success.
  • Security concerns. Potential edge computing security issues also hamper widespread adoption. Operational technology and IoT devices that edge computing environments could support aren't as closely monitored or secured as traditional IT resources.

Edge computing opportunities for successful deployment

Despite the obstacles to widespread edge computing adoption, telecom operators have made significant advances to push adjacent technologies. Extensive 5G deployments, for example, could set the stage for momentum in the edge computing space. Telecom operators, hyperscale providers and vendors also see edge computing as a way to extend cloud services closer to the customer premises and reduce traffic across the internet.

In a report released in October 2023, management consulting firm McKinsey & Company discussed its survey of 75 telecom executives in North America and Western Europe. Most respondents expressed enthusiasm about edge computing monetization opportunities. Over half said they believe they can increase operational efficiencies through its deployment.

More than a quarter of respondents said they planned to scale up edge computing rollouts. Twenty-one percent said they expect edge computing to enable new enterprise use cases.

Industries that edge computing-enabled applications could support include the following:

  • Gaming.
  • Sports.
  • Entertainment.
  • Autonomous vehicles.
  • Healthcare.
  • Retail.

Public safety sectors have also made progress with edge computing. For example, localized cameras can detect and report on issues like traffic incidents and fires to expedite appropriate emergency personnel deployment.

Advances in AI have also improved edge computing and have driven interest in the technology. One use case of edge computing in AI is to facilitate local data processing. In addition, many early proof-of-concept generative AI trials run in edge deployments.

Further, data sovereignty regulations continue to evolve and require local data storage, which edge computing can provide. Organizations that want to maintain compliance have shown interest in edge computing.

Like other technology consumption models, the enabling technology is catching up to the concept. As network reliability and speeds improve and demand for more local applications support continues to rise, telecom operators might soon be able to cash in on edge computing in a bigger way than before.

Amy Larsen DeCarlo has covered the IT industry for more than 30 years, as a journalist, editor and analyst. As a principal analyst at GlobalData, she covers managed security and cloud services.

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