Edge computing represents a huge opportunity for telecoms service providers.
Our recent research with Analysys Mason indicates that revenues from enterprise edge implementations will be worth $17 billion over the next three years, based on the operations of just six industries across four countries. During the same period, enterprise edge implementations are set to eclipse the value of those that serve consumers.
But longer-term, edge also represents a potentially existential threat. The shifts towards virtualization and cloud computing that enable edge are accelerating the commoditization of the network, opening the floodgates to upstarts looking to capitalize on the promise of the new technology.
Hyperscalers, consultancies and other organizations with IT capabilities are all vying to become players in the enterprise edge ecosystem. Meanwhile, service providers are in danger of being sidelined as the proverbial dumb pipe — facilitators of the ecosystem and acting as partners to the technology companies selling edge solutions, but not primary players within it.
In fact, as service providers struggle to adopt virtualized, disaggregated networks, just 6 percent of enterprise IT decision makers see telcos as an authority in the edge space.
According to The Edge Disconnect, there are three main roles service providers can play in the enterprise edge ecosystem:
- The Edge Location Owner, delivering connectivity to enable edge deployments.
- The Edge Connector, delivering virtualized network functions to integrate edge with enterprise infrastructure.
- The Edge Application Enabler, delivering edge application development platforms and tools to enterprises.
Our research shows the revenue opportunity increases as we work down the list, moving from offering connectivity — the traditional role of the service provider — to offering edge infrastructure and application platforms.
But with connectivity a pivotal component of edge, doubling down on network technologies still represents a substantial short-term opportunity.
Defining your proposition
The primacy of edge means you should take a proactive approach to define your organization’s edge proposition, and the role it will play in the edge ecosystem.
Doing so can be complicated, so it is important to start with some basic questions.
The 10 questions we ask below are intended to walk you through the process of capturing your organization’s existing capabilities in edge and mapping them to the needs of your customers.
Some of the questions may seem simple, but providing full and accurate answers will give you a solid basis for a successful long-term edge strategy.
These questions are accompanied by a workbook that provides useful examples and templates to help you map out your approach.
With that in mind, let’s get started. And if you would like help with any of the questions, don’t hesitate to reach out to our edge consultants.
1. Who are your customers or prospects?
It’s first essential to outline who will be buying, selling and administering your edge products and services.
Start with generic information — likely edge customers will include the CIO, CISO, CDO and CTO. For example (and time allowing), build out fuller personas to help you achieve product-market fit later in the process.
As you do this, ensure you remain focused on the industries you are looking to serve.
2. What are your customers’ priorities?
Capture what your client is trying to achieve in their role.
Are there particular applications, products or services they’re seeking to bring to market? What volume and what sort of inbound RFPs are you receiving for edge applications and services? What edge-relevant conversations are you already having with clients?
3. What are your customers’ challenges?
What’s keeping your clients up at night? Do they have particular data security concerns? Are they suffering with high backhaul costs? Are their budgets under pressure?
Capture their challenges here. If you can, get this information by asking them; if not, put yourself in their shoes and get creative.
4. Which customers’ priorities and challenges represent the greatest revenue opportunity to your business?
List the priorities and challenges that are relevant to your business and order them by what you anticipate being most lucrative. Select the top five and estimate the scale of the opportunity around each.
5. How can edge computing help customers meet these priorities and challenges?
Edge computing brings the cloud to the network edge, with benefits of processing speed, latency, security and cost, particularly when applied to data-intensive tasks.
Additionally, many enterprises are excited by the new use cases enabled by edge. For each of the top five priorities and challenges you have captured above, determine how edge technologies and applications can be applied.
Here it can be helpful to use a Lean UX Hypothesis template to capture what the expected outcome of the application of Edge computing would be. Typically, the template is as follows:
We believe that [our company] will achieve [this measurable business outcome] if [this persona] can achieve [this goal] with [this technology].
6. Which edge-related threats apply to your organization?
As mentioned above, edge presents a massive opportunity, but also a potentially existential threat, to service providers. Here, consider and capture that threat in more depth.
What could prevent your organization from capitalizing on edge?
- Could internal operating inertia prevent you from providing edge applications or infrastructure?
- Could a lack of vertical expertise mean clients tend to go elsewhere for edge consultancy and implementation?
- Could a lack of internal understanding of edge business models prevent decision-makers from acting on edge?
- Could it be relegated to “dumb pipe” status, providing only connectivity to technology companies selling fuller edge solutions and applications?
7. What edge products and services can you currently offer?
How mature is your edge offering, and what applications can already be brought to the edge of your network? Do you already have rack space sitting within your base stations? Do you have partnerships in place with public or private cloud providers? Or perhaps you have pre-packaged solutions for particular use cases? Capture this information here.
8. How does your edge capability map to your customers’ challenges and priorities?
By now you have a clearer idea of what your customer needs and what you have to offer. How do the two fit together? Are there significant areas of opportunity where you are currently lacking in capability? For example, do you have an existing public cloud partnership in place, but also need the security of private cloud? Or are there particular ISVs you need to provide access to? Capture these gaps, and your organization’s strengths.
9. How can you fill your edge capability gaps?
For each of the gaps you have identified, map out your options for filling them.
Access to [insert ISV here] required:
- Strike up partnerships with ISVs using internal talent.
- Custom-build proprietary applications.
- Resell the ISV’s app through a third-party (eg WWT, Cisco).
- Steer clients to access ISV via a hyperscaler partnership (Microsoft, AWS) and provide the connectivity.
Assess the likely success of each of the options above by performing a SAF (suitability, acceptability, feasibility) analysis.
10. Now, what are your strategic options?
Based on the information you have collated about your customer, your capability gaps and market insights, now assess your company’s strengths (Q7) and weaknesses (Q8) alongside the opportunities (Q5) and threats (Q6) you see.
Use a TOWS framework to provide structure to the strategic options available to you.
Consider, for example, how the strength of your network enables you to deliver more sophisticated services. And how your core business not being an application provider can become a long-term weakness, that could be overcome by leveraging partnerships with system integrators such as WWT.
Any strategy should consider how your network will evolve and be maintained. Think about whether a viable strategy would require you to implement new software capabilities such as containerization to minimize potential disruptions to IT and OT systems when upgrading them.
Do you have an understanding of what ISVs are currently on the market that could be integrated within your architecture to expedite solving your customer challenges? Or is there a niche opportunity within your customer that you could build a bespoke applicate for?
Could your strategy look at first providing ancillary benefits, such as ensuring the infrastructure used can manage 5G radio frequencies and host monitoring applications? Or enablers that you could sell internally (to your ops team, for example) as well as externally?
This process can be tricky as you will be working with assumptions, but it’s an essential step in defining how your organization works within the edge ecosystem.
Once you’ve stepped through these questions, you will have identified your organization’s existing edge capabilities, and analyzed your options for augmenting or evolving them to meet enterprise demand.
Based on this information, you should be able to form a clearer picture of a realistic edge proposition — whether that means continuing to provide connectivity and meeting customers’ edge requirements through partnerships, moving towards selling network functions to enterprises directly, or creating edge application platforms — and the actions you can take to make it a reality.
However, you may have found yourself with a mass of options that you’re now struggling to navigate.
In either case, our consultants can walk you through your next best actions, based on expertise drawn from edge deployments across the globe and partnerships with every key hyperscaler and ISV in the edge space.
We’re here to help you crystallize your product offering. Once we’ve done so, we can get you to a POC within weeks, with support from our Advanced Technology Center labs.