Hybrid edge cloud: how to succeed in a multi-edge and multi-cloud world
- Go-to-market models for the enterprise edge are still being developed across a broad ecosystem of edge players, presenting many possible routes to market.
- This is driving the adoption of multi-edge, hybrid multi-cloud solutions, and CSPs should look to remain agile in this new go-to-market reality to secure a share of future revenue streams.
The edge computing market, which enables game-changing enterprise benefits like scalability, data sovereignty, and low delay, is expected to be worth $445 billion by 2030.
For communication service providers (CSPs), this delivers significant market openings across new sectors such as manufacturing, gaming and entertainment – with use cases already advancing based on real-time analytics, autonomous vehicles and smart robotics.
Edge market strategy for 2023 and beyond
The road to a fully developed edge market is long, and still taking shape. The ecosystem is wide and fragmented. Many players and partnerships that span not only CSPs, but also hyperscale cloud providers, system integrators, technology vendors, content aggregators and even the enterprises themselves are still being formed.
This gives today’s edge market many flavours, with deployment models that can be driven by CSPs themselves, hyperscale cloud providers (HCPs), or a combination of both – as well as infrastructural setups that comprise the network edge on CSP premises, the extended public cloud edge of HCPs, and on-premises private edge and gateway edge deployments at enterprises, consumer-facing premises and vehicles.
This fragmented ecosystem, with no one clear defined solution, is driving the adoption of multi-edge, hybrid multi-cloud solutions.
It’s becoming clear that the ability of CSPs to adapt and be agile in this new landscape will define their future role in edge value chains, so it’s key that their go-to-market strategy addresses this new reality.
This means taking a holistic end-to-end view on the requirements and the ecosystem to determine, for example, who best to partner with for a specific use case. This will also drive key questions that will determine investment choices, such as whether it makes sense to invest in network edge infrastructure or partner with HCPs.
In our latest edge strategy playbook, we delve into the edge ecosystem to explore today’s viable go-to-market models. From a network and solutions perspective, we also explore which infrastructural functions will be key for CSPs to succeed on their chosen strategic path.
Based on our findings, here are some of the key takeaways:
Hybrid solutions are becoming the go-to-market edge reality
The takeaway: By rapidly expanding the extended public edge to dense urban centers, HCPs are well positioned to capitalize on emerging edge markets. Service providers need to consider how to complement their infrastructure with HCPs or risk missing out on the action.
With a high number of distributed sites and expert network knowledge, including the demonstrated pedigree to provide intelligent traffic routing, the value proposition brought by CSPs to the edge ecosystem is a strong one.
However, how this is applied in terms of solution orchestration and gaining a share of new business models, is an entirely different question – and one that depends on enterprise strategy, regional ecosystem maturity, and the segments targeted by each use case.
With this in mind, we believe frontrunning CSPs can make good ground in the market by pursuing a multi-edge strategy that comprises network edge, extended public cloud edge, and private- and gateway edge. This is what we call the hybrid edge cloud.
What is the hybrid edge cloud?
The hybrid edge cloud is an enterprise edge deployment model that combines infrastructural elements of both private cloud (provided by CSPs own infrastructure) and public cloud (provided by HCPs infrastructure) environments. It’s an evolution of the partner edge, where resources, expertise, and value are shared between both players – and where network functions and enterprise applications run seamlessly across a single hybrid infrastructure.
As we explore in our playbook, hybrid edge cloud deployments are already gaining early market success, building on earlier partner edge examples.
In Europe, Gruppo TIM has explored an interesting use case with clear business value where Ericsson’s 5G cloud network functions and applications are distributed across a hybrid setup comprising TIM’s cloud infrastructure and Google’s Cloud solutions.
While in Asia-Pacific markets, various CSPs including SingTel and SKT are developing hybrid edge enterprise solutions based on a combination of a private edge model that is integrated with the extended public cloud. This enables the CSPs to be agile in addressing many possible market scenarios.
These are just some examples where we see CSPs pursuing a hybrid approach to good effect, where they are investing in their own infrastructure but also embracing the partner edge in parallel for network functions and third party applications.
Develop your value proposition in a hybrid market before it’s too late
The takeaway: With the right capabilities across key functions, CSPs can develop a strong value proposition across hybrid environments. Deciding which cards to play and when will all depend on your enterprise strategy.
As an enabler of horizontal scale to other industries, and the associated value that brings, it’s important that all partnerships, investment choices, and verticals targeted are factored into the CSP edge strategy. Naturally, this will also depend on factors including level of enterprise growth ambitions and willingness to invest, market size and position in that market, as well as the CSP’s assets and offerings beyond connectivity that can be used by enterprises.
In CSP-led and hybrid models, CSPs have the option to deliver three possible edge services, in any given combination. This comprises connectivity services, cloud infrastructure services, and application services.
However, irrespective of service bundling, success in the edge market will depend on a complete end-to-end solution. This requires extensive engagement with the ecosystem, as well as investment in key network functions including infrastructure, orchestration, user plane and traffic routing, exposure, and services. Find out more about what to consider for each of these functions in our latest edge deployment strategies playbook for 2023 and beyond.
For CSPs, establishing control of the higher layers of the network stack such as orchestration, enterprise portal and exposure will be key to building a value proposition.
In hybrid scenarios, for example, hybrid infrastructure support should be built into the service orchestration, as well as management capabilities. This affords CSPs the capabilities to manage and orchestrate the CSP integrated cloud and mobile network cloud stacks (either integrated or provided by HCPs) in more central locations. This architecture supports management capabilities for network functions and edge applications if they are part of the CSP catalogue.
Standards must stay simple to drive market growth
The takeaway: The telecom industry needs to avoid fragmentation in standards, technology, and interfaces, while also enabling differentiation and competition between CSPs. 3GPP is the main body influencing standardization in edge computing.
The standardization of the edge ecosystem is ongoing, and comprises many different initiatives from various organizations, industries and companies.
This includes 3GPP, which is aligned closely with GSMA, ETSI and the Cloud Native Computing Foundation (CNCF). It also includes several industrial alliances, such as the Automotive Edge Computing Consortium (AECC) and the 5G Alliance for Connected Industries and Automation (5G-ACIA).
Connected to this, there are also ongoing open-source initiatives to define and standardize service APIs for an open ecosystem. The most influential forum in this area,CAMARA, is a cooperation of many different industry players across ICT sectors, including CSPs, HCPs and device manufacturers.
To fully develop the value of the future edge, it’s important that our industry works to ensure close alignment and low fragmentation between today’s broad and wide initiatives. This will be key to achieving faster roll-out of new edge services across different sectors, leading to the desired economies of scale. A fast and effective standardization of service APIs across key verticals will also be crucial in realizing this ambition.
Develop an edge strategy for 2023 and beyond
The evolving edge ecosystem opens many exciting new routes for CSPs into new verticals and revenue streams. However, whether CSPs choose to pursue a CSP-led or a HCP-led model, it’s becoming clear that emerging hybrid infrastructural setups will be required to unlock scalable go-to-market solutions that can be horizontalized across sectors.
For CSPs, this raises several strategic considerations that must be addressed already today, such as exploring market opportunities, building partnerships with the ecosystem – not least of all HCPs, and identifying which investments are required to create a competitive enterprise offering.
We cover all of this and more in our latest edge deployment strategies playbook for 2023 and beyond. We recommend you take a look.
Learn more about edge computing, strategies and Ericsson’s related offerings.
Read the article: Edge computing infrastructure and beyond: the 5 key factors for better edge choices
Read the article: Five good reasons to consider wireless WAN for edge computing
Read the article: Experts on the edge: A strategy for successful edge computing implementation
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