Are MSPs Ready to Capture the “White Space” Opportunity?

Demand for online services has grown substantially and has been driven by new internet users, higher consumption of video content, and the emergence of cloud services. Consumers are becoming more mobile and more connected, and they expect a digital experience wherever they go. More than ever, compute and intelligence (artificial and machine) ought to be as close to consumers as possible. This marks a departure from the central repository or workload that predominates the telco world of today. The likes of Netflix, Amazon, and Google already predicate their business model on their widely diffused-edge infrastructure, or Content Delivery Networks (CDNs). This is a trend that is now picking up pace in telecoms, where there is increased market activity to place intelligent agents as close to the “edges” as possible.

The expected mobility and ultra-response time are driving innovation and the introduction of new products. A notable development is the momentum behind MobiledgeX. MobiledgeX is a company that aims to monetize 5G networks with an edge solution that goes beyond what is available today. On the infrastructure side, Crown Castle, a U.S.-based company that operates thousands of towers and small cells, is collaborating with Vapor IO. The strategic rationale is to deploy Vapor IO’s Kinetic Edge Platform—multiple data center facilities combined into a unified logical data center—at the base of cell towers. Further enhanced by a layer of Artificial Intelligence (AI), the telco edge can certainly serve as a catalyst for market growth. However, questions remain: how would the underlying architectures (e.g., edge clouds, devices, and central offices) evolve? Who would control their evolution? Are Mobile Service Providers (MSPs) ready to take advantage of the increasing compute, intelligence, and service logic residing at the edge? And, most importantly, what are the new services that will justify the somewhat expensive rollout of telco edge computing platforms?

The cloud and CDNs of tomorrow will be predicated on low latency, high bandwidth, and lightweight architectures (see Figure 1). MobiledgeX provides an architecture that lays the foundation for a common telco edge platform on a multi-MSP, multicountry basis. Analogously, but on the infrastructure side, Rancher Labs recently launched a lightweight version of Kubernetes specifically targeted at edge deployments. These are two examples among many others that illustrate the inevitable proliferation of edge platforms. This is driven by MSPs’ attempt to extend their services’ reach beyond their home countries from which the bulk of their revenues come. On the one hand, these edge platforms can serve as the foundation of new and innovative applications from the developer community. On the other hand, to expand a company’s commercial side on a global level, as web-scale players have done, may require a degree of sophistication on the technology front, particularly regarding harmonization and integration of a convoluted technology ecosystem.

The most probable pressing challenge for MSPs’ looking to implement edge platforms is to understand where they are via current complementary assets, edge platform solution maturity, and likely impacts on business outcomes. New edge solutions such as MobiledgeX embody extreme mobility. But for MSPs to embrace this mobility and pursue new opportunities globally, there are some elements to address: billing and roaming agreements, for example, both of which may be major issues when multiple MSPs enter the fray. To that end, technologies such as Network Function Virtualization (NFV) and Software-Defined Networking (SDN) serve as foundational steps, but they are far from being the complete solution. Resource independence, resiliency, and scalability remains a key component for successful monetization of edge platforms and underlying networks.

Network reconstruction from “nodes” to “functions” opens opportunities to create new services. The 5G core network is an embodiment of an industry shift where a network node is no longer a black box. In the coming decade, ABI Research believes that the shift toward the decentralized, the enabled platform, and the cloud will continue unabated. Three drivers are expected to enable the value at stake:

• Adherence to the end-to-end principle: Prospective solutions are expected to enable consumers and/or enterprises to access intelligence wherever it resides. This warrants edge architectures that factor in mobility of stateful application behavior, roaming in a multi–mobile network operator basis, and billing mechanisms that align with ever-enhanced mobility.
• Synchronization of distinct and dispersed products: Edge architectures will yield commercial value only if they are synchronized in a scalable fashion; that is, they remain effective even when there is a significant increase in the number of resources and of users.
• Enhancement by a layer of intelligence: A combination of edge computing and AI tools promises improved efficiency, convenience, and economic benefits but on the condition that telco edge blueprints and upcoming solutions are harmonized with existing infrastructure (operation support systems, business support systems, etc.).

In business, as in most other undertakings, nothing big starts big; tomorrow’s whale is today’s minnow. The challenge for the industry is that today’s minnows are tomorrow’s meals, and knowing which is which is not easy. The impending market for telco edge solutions is no doubt tomorrow’s whale, but it is one that is composed of a plethora of piece parts (technologies) that the industry must intimately understand. Currently, all the answers aren’t known, but we ought to understand the choke points in the near term to obtain growth in the long run. For example, MSPs need a clear sense of the industry(ies) they currently serve and the additional opportunities that fall within the boundary of telco edge. Caution, however, must be exercised so that well-defined boundaries do not obstruct the path to “white space” telco edge opportunities.

Cloud providers are taking advantage of their lean operations to launch and subsequently push their edge solutions in live deployments. Microsoft, for example, recently launched Azure Data Box Edge, a consumption-based edge infrastructure solution that is already being trailed by Esri and retail giant Kroger. If the telecom industry aims to mirror this degree of nimbleness and commercial “flatness,” it may need to sidestep the time-consuming standardization approaches that predominate today. Cloud and web-scale providers are kings of economies of scale. MSPs retain advantage at the edge, and provided they tame the underlying technology, they can be kings of economies of scope. Unique assets such as spectrum, central office, base stations, and billing relationships are hard-to-imitate capabilities that can be integrated seamlessly toward a common, federated telco edge platform.

Telco edge constitutes a growth opportunity, but MSPs must realize that capturing this growth is not a quick endeavor. It will take time. However, it should not preclude the industry from making a step now and accelerating efforts at some point down the line. MSPs should recognize what current telco platforms (MobiledgeX, Vapor IO’s Kinetic Edge) can offer today and deploy them without waiting for mature and proven solutions. Edge solutions from major cloud players (e.g., Microsoft’s Azure IoT Edge, Amazon’s AWS IoT Greengrass) may have the upper hand in technology maturity. The ability to move at cloud pace can be obtained with the right alliances and partnerships and an ecosystem that extends the utility of information-technology-designed solutions to the telecom domain. On that front, MSPs are already either collaborating (e.g., Vodafone’s partnership with IBM) or creating new, leaner entities with strong software expertise (e.g., Deutsche Telekom’s funding of MobiledgeX).