It did not go unnoticed the downturn in activities revolving around edge computing. Several analysts and industry sites have reported on it more than a year ago, like Lightreading. In the latest Xona Partners Insight Note, we provide our insights on this market segment(download below). The Edge computing is one of these foggy concepts that has in it something for everyone: cloud service providers (CSPs), telcos, and enterprises just to mention a few categories of players in a vast ecosystem. Our note highlights some of the fundamental aspects of the edge computing market in oder to assess how it can evolve in the future. We also include a few tips on what’s important in technical and commercial due diligence for edge data centres.
The Evolutionary vs. Revolutionary Edge
The fundamental thesis in assessing the progression of edge computing is understanding how applications evolve. This is because applications impact the development of the 4 layers of edge computing:
- Cloud service provider edge
- Telco edge (or connectivity edge)
- Enterprise edge
- Device edge
Our note focuses on the cloud and telco edge to help investors in edge data centres develop their framework for technical and commercial due diligence. We highlight the different drivers for the CSP edge and telco edge: The CSP edge is an evolutionary process driven by requirements of existing applications in contrast with the telco – or connectivity – edge that is largely driven by applications that are yet to mature and thus, their financial return on investment is uncertain.
Concluding Thoughts
Investors in the edge computing sector need to have the appropriate assessment of the underlying market trends that impact this sector. The pull back in investment may affect all the segments of edge computing initially. However, there are segments where growth will need to continue. That will not only require edge data centre facilities, but also the corresponding hardware and software that will enable this segment.