Edge Computing: Telco Positioning Strategies and Monetization Opportunities in Europe

The global edge computing market in 2020 was valued at $9.5 billion. The market is projected to grow at a CAGR of more than 23% during the forecast period 2022-2025. The largest growth driver of the edge computing market opportunity 2021-2025 lies with edge data centers. The mini/micro data centers provide the infrastructure that enables edge computing by providing the data storage and computing closer to the points of data collection and where applications and content are consumed. The key players in the market are Hyperscalers, data center infrastructure vendors, telecom infrastructure vendors, telecom operators, content delivery network providers, and system integrators that are partnering and positioning themselves to seize the opportunity from the growing edge computing market and enable new use cases.

Global edge computing market overview

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Telcos in Europe have been working to bring multi-access edge computing (MEC) to market, bringing edge computing to the customer premises – even closer than network edge computing (NEC) where telcos deploy edge nodes within the carrier network. In addition, telcos have worked to be able to provide edge computing solutions alongside 4G/5G private networks. In order to fully take advantage of the edge computing market and bring new services to the market, some telcos have even created independent edge computing businesses or divisions.

Telcos are well-positioned to be active in the edge computing market. Telcos can not only benefit from edge computing in their own operations, but also from offering edge computing services to enterprises. Telcos can leverage their infrastructure and network to provide the connectivity necessary to enable edge computing and to deploy micro data centers and edge nodes. Many telcos have also partnered with other key players in the edge computing market, especially hyperscaler’s, to provide the cloud services and platforms necessary for edge computing deployments. Telcos can monetize edge computing solutions by providing “edge as a service”, vertical edge solutions, managed services, and system integration.

What are the market dynamics in the edge computing market?

The edge computing market is driven by new use cases that require low latency and real-time data processing.

Performance and latency: Edge computing reduces the number of “network hops” that data or application content has to travel in order to be processed or delivered to consumers. The faster turnaround times associated with local data processing help to ensure lower latency and higher levels of application performance. This has implications for a wide range of content-rich and time-sensitive applications such as media content, autonomous vehicles, Industry 4.0, and real-time digital health applications.

Real-time data processing: By processing data locally, edge computing ensures that data can be harnessed and acted upon in real-time. Real-time data processing makes it possible to offer a wide range of new applications and digital services and is essential for things like autonomous, driverless vehicles, online gaming, or failure detection systems in a factory or chemical plant.

Privacy and security: By processing and storing data locally, edge computing addresses the privacy and security concerns that arise when personal data is sent to a centralized cloud data center. It can therefore help enterprises manage data residency and compliance obligations. In addition, the edge offers an additional perimeter where potential security attacks can be detected and prevented.

What are the trends in the telcos edge computing market in Europe?

Many telcos have partnered with hyperscalers to be able to bring cloud resources closer to customers and leverage the hyperscalers existing development tools and market presence. The partnerships allow telcos to leverage the hyperscalers’ cloud platforms and allow the hyperscalers to leverage telcos’ physical infrastructure for edge computing. Telcos can use partnerships with hyperscalers to utilize edge computing in their own operations as well as offer edge computing to enterprise customers.

Telcos have been working towards providing MEC solutions, especially 5G MEC, to bring edge computing to the premises of customers, even closer than NEC. Telcos provide NEC by establishing micro data center edge sites within the carrier network. By adding MEC to the edge computing portfolio, telcos can deploy edge computing in more use cases such as on the premises of a smart factory enabling Industry 4.0 technologies.

Some telcos have launched their own dedicated edge computing business units or independent businesses e.g., Liberty Global’s JV AtlasEdge, DT’s independent business MobiledgeX, and TIM Group’s Noovle cloud and edge computing business. By creating separate business units or edge computing businesses, telcos can further monetize the edge computing opportunity and dedicate more resources to the edge computing market.

Who are the market players in the edge computing market?

The key players in the edge computing market are hyperscalers, data center infrastructure vendors, telecom infrastructure vendors, system integrators, and telecom operators. The other players also include data center colocation providers, as well as professional services companies & content delivery networks.

The Hyperscalers include Baidu Cloud, Microsoft Azzure, Tencent Cloud, and Google. The data center infrastructure vendors include inspur, Lenevo, IBM, Cisco, DELL Technologies, and HP. The system integrators involve Accenture, Deloitte, TCS, and Capgemini. The telecom infrastructure vendors include Huawei, Nokia, Juniper Networks, and Fujitsu. The Telcom operators include Vodafone, Lumen, Telstra, Orange, and Telefonica.

Global edge computing market, by key players

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Market report scope

Scope

• Telcos can tap into opportunities in areas including Industry 4.0, autonomous vehicles, smart cities, and AI and big data analytics by providing edge computing services.
• The manufacturing, retail banking, insurance, energy, and utilities verticals are among the top ten verticals presenting opportunities in the edge computing market.
• Telcos’ activity in the edge computing space in Europe has ramped up with new partnerships, services, and business units.

Reasons to Buy

• This Insider report provides a comprehensive examination through forward-looking analysis of Europe’s edge computing market opportunity and trends in a concise analytical format to help executives build proactive and profitable growth strategies.
• The report provides extracts of GlobalData’s edge computing forecast, split by products/services and top verticals, along with the key drivers behind ongoing and upcoming trends in the global edge computing markets.
• Three European telco case studies illustrate how telecom operators can position in the edge computing market and monetize the growth opportunities available to them.
• The report is designed for an executive-level audience, with charts and tables boasting presentation quality.
• The broad perspective of the report coupled with comprehensive actionable insights will help operators, equipment vendors, and other telecom industry players better position to seize the growth opportunities in Europe’s emerging edge computing market.