AT&T + HPE = edgy TLC

AT&T has announced a new partnership with HPE to drive the benefits of edge computing in enterprise services.

The duo has agreed a go-to-market strategy to accelerate business adoption of edge connections and edge computing, seen by some as one of the most interesting areas of the up-coming 5G economy.

“AT&T’s software-defined network, including our 5G network, combined with HPE’s intelligent edge infrastructure can give businesses a flexible tool to better analyze data and process low-latency, high-bandwidth applications,” said Mo Katibeh, CMO of AT&T Business. “Bringing compute power closer to our network helps businesses push the boundaries of what is possible and create innovative new solutions.”

“HPE believes that the enterprise of the future will need to be edge-centric, cloud-enabled and data-driven to turn all of its data into action and value,” said Jim Jackson, CMO of HPE. “Our go-to-market alliance with AT&T, using HPE Edgeline Converged Edge Systems, will help deliver AT&T MEC services at scale to help our customers more quickly convert data into actionable intelligence, enabling unique digital experiences and smarter operations.”

There are of course many benefits to edge computing, though one of the areas AT&T will be hoping to address through this tie-up will be the security concerns which will emerge. This looks like it could be one of the key marketing plugs of the AT&T proposition, as its Multi-access Edge Compute (MEC) Services will hope to drive the benefits of mobility to enterprise customers.

From HPE’s perspective, the team will be contributing on the low-latency side of the 5G euphoria. HPE suggests its Edgeline Converged Edge Systems could help create use cases where applications can reside on premises for lower latency processing.

It might not be as ‘sexy’ as plugging ridiculous download speeds, but the greatest benefits of 5G to the telcos would appear to be diversification as opposed to increased squeeze on the wallets of consumers. With more data being created each day, the edge will become increasingly important to activate products, services and business models in a faster and more operationally efficient manner. Enterprise organizations will largely be unaware of how to reap the greatest benefits, a pleasant niche the telcos could certainly profit from.

The edge takes centre stage (again)

At Mobile World Congress in Barcelona, the edge was one of the most prominent topics and the same can be said in Denver at Light Reading’s Big 5G Event.

The edge itself is a relatively easy concept to understand, but in reality, the deployment and evolution are much more complicated facets. It is usually the case that the biggest potential or most promising developments are the most difficult to achieve, but it does seem there is resistance continued resistance to change.

“I don’t think we are doing 5G right, we are too obsessed by being faster,” said Telus CTO Ibrahim Gedeon.

This is a message which is becoming increasingly frequent, and while the frequency is encouraging, an some point the walk is going to have to follow the talk. At this event, Telus, Equinix, AT&T, T-Mobile US and Verizon have all preached the benefits of moving beyond a ‘bigger, faster, meaner’ business model which is focused on speeds, but soon enough some might assume these are simply statements to appease the masses.

In terms of the future of the telco world, those telcos who maintain the status quo, focusing on speeds, will march down the path of commoditisation. Those who challenge themselves, taking on the incredibly difficult challenge of evolving the business, will find additional value and redefine themselves as a ‘Digital Service Provider’. And the edge is a very important component of that.

“Does 5G need edge, yes,” said Jim Poole, VP of Ecosystem Business Development at Equinix. “But does edge need 5G, no.”

This is a tricky position and a conundrum often faced in the telco and technology world. For some, the path forward does often look like a solution in search of a problem. It might not sound like the most attractive path, especially when there is the simplistic and more instantly gratifying pursuit of increased speeds.

It all depends on what the telco actually wants. As Mitch Wagner of Light Reading pointed out, there is nothing fundamentally wrong with the utility business model, these are companies which do make money and are often much safer bets, but this is not what the majority of telcos want in the future.

The answer is relatively plain if utilitisation is to be avoided; add more value to the ecosystem. This is where the likes of Google, Amazon and Microsoft have been successful. They have embraced the idea of a solution looking for a problem, demonstrated the value in disrupting the status quo and proved to the world new is better. For the telcos, this means embracing the unknown.

The edge is that unknown for the moment. Yes, the edge exists in the 4G world, but there is much more value in the 5G era. It is a case of putting the cart before the horse, but as it was pointed out today, creating a proposition which is defined by the edge offers a new dynamic, encourages the imaginations of a new type of developer and creates new services. Telcos can be fundamental in delivering the foundations of these new businesses, products and services, but they need to disrupt themselves and create a new organization.

This again is a statement which is not new. This week and countless other conferences have seen executives preach the promise of evolution, but sooner or later the telcos are going to have to replace talking with walking.

The time of rhetoric is coming to an end, we need to see progress in these transformation initiatives.

The private power of the edge

One of conundrums which has been quietly emerging over the last couple of months concerns how to maintain privacy when attempting to improve customer experience, but the power of the edge might save the day.

If telcos want to be able to improve customer experience, data needs to be collected and analysed. This might sound like a very obvious statement to make, but the growing privacy movement across the world, and the potential of new regulatory restraints, might make this more difficult.

This is where the edge could play a more significant role. One of the more prominent discussions from Mobile World Congress in Barcelona this year was the role of the edge, and it does appear this conversation has continued through to Light Reading’s Big 5G Event in Denver.

Some might say artificial intelligence and data analytics are solutions looking for a problem, but in this instance, there is a very real issue to address. Improving customer experience though analytics will only be successful if implemented quickly, some might suggest in real-time, therefore the models used to improve performance should be hosted on the edge. This is an example of where the latency business model can directly impact operations.

It also addresses another few issues, firstly, the cost of sending data back to a central data centre. As it was pointed out today, telcos cannot afford to send all customer data back to be analysed today, it is simply an unreasonable quantity, therefore the more insight which can be actioned on the edge, with only the genuinely important insight being sent back to train models, the more palatable customer experience management becomes.

Secondly, the privacy issue is partly addressed. The more which is actioned on the edge, as close to the customer as possible, the lesser the concerns of the privacy advocates. Yes, data is still being collected, analysed and (potentially) actioned upon, but as soon as the insight is realised the sooner it can be deleted.

There are still sceptics when it comes to the edge, the latency business case, artificial intelligence and data analytics, but slowly more cases are starting to emerge to add credibility.

SK Telecom looks to the edge to monetize 5G

SK Telecom has announced the launch of its ‘5G Mobile Edge Computing Open Platform’ in an effort to marry two of the industry’s hottest topics.

While 5G has dominated industry discussions for years, this years Mobile World Congress saw edge computing steal at least some of the limelight. This may well be evidence of a more pragmatic approach to connectivity ROI, with telcos removing some of the buzz surrounding 5G and creating a more realistic story about how to commercialise the connectivity bonanza; 5G is only one step forward, but the edge is another.

“By opening up the ‘5G Mobile Edge Computing Platform’, SK Telecom will secure the basis for expanding the MEC-related ecosystem and accelerating the release of 5G services,” said Park Jin-hyo, CTO of SK Telecom. “SK Telecom will join hands with diverse companies throughout the globe to boost the adoption of MEC-based services.”

As part of the initiative, SK Telecom will offer enterprise customers the opportunity to improve customers Quality of Experience (QoE) by connecting their service server or data-centre to SK Telecom’s MEC platform. SK Telecom will also provide open Application Programming Interfaces to enable customers to easily develop MEC-based 5G services.

By enabling the edge, ideas such as the smart factory become more of a reality. SK Telecom claims that latency can be reduced by up to 60% by using the edge.

Although the traditional means of generating revenue in the telco space has been through very simplistic and consumer orientated marketing strategies, this cannot be the case for 5G. Such is the expense of deploying a network which meets the connectivity expectations of tomorrow, leaning on traditional business models will likely not work. To realise the promise of 5G, initiatives such as this one, which encourages more creative projects with enterprise customers, are an excellent step forward.

This was perhaps one of the most satisfying outcomes from Mobile World Congress this year, as while some might have viewed the switching on of 5G networks as somewhat of an anti-climax, for us it was a very palatable outcome.

The focus on the edge, and the dampening of 5G hype, set the stage for progress. Yes, the industry has spent a lot of the futureproof networks, and yes, investors are craving the promised profits, but conversations felt much more realistic, pointing towards the work which still needs to be done. Afterall, 5G should be viewed as a catalyst to secure new revenues, not as the silver bullet.

Edge takes centre stage at MWC 2019

For all the hype and buzz which was generated ahead of Mobile World Congress 2019, the edge stole some of the attention away from 5G.

Perhaps this is more of a realisation that 5G is not all its cracked up to, at least for the moment anyway. After handing out the accolades for ‘5G first’, this now seems to be the time to settle down and take a mature look at what we have in front of us.

Numerous telcos have not crossed the finish line to offer 5G to those who feel they need it, but with the incredibly limited nature of the coverage and a lack of devices to make use of the bonanza, you have to ask what is the point? For all the promise of greatness, this year’s gathering had a much more pragmatic feel.

Yes, 5G is exciting, but its only the beginning. Yes, there is a chance to make more money, but the usecases have to be figured out. Yes, there are some interesting ideas out there, but Release 16 is where the magic will happen. And yes, today’s 5G will bring certain benefits, but there is of course a lot of work to be done.

It might seem like a bit of a negative thing to say but keep the champagne on ice because nothing has been achieved yet. And this seemed to be the mood throughout the halls of the Fira. The industry has been building up this promise of a connected society, built on superfast 5G networks, for years, but the hype seems to have been dissipated by reality.

There was of course a lot of talk around 5G, perhaps most notably because of the devices the manufacturers were showing off, but it would certainly be fair to say the edge stole at least a bit of the limelight.

Although there are some telcos out there who believe they can build a 5G business on the concept of speed, many are building towards the latency angle. This is where the edge will play a critical role, and the rational businesses throughout the world are building partnerships and investing in technology to make these services a reality.

Telefonica is an excellent example, as while it announced a partnership with Microsoft to smarten up its Aura product ahead of taking on the likes of Amazon and Google in the personal assistant space, this tie up will help it drive towards the edge, creating a wealth of new services for a variety of customers. During the press conference, Microsoft CEO Satya Nadella pointed towards the edge as one of the most powerful developments over the next couple of years, and he certainly wasn’t the only one.

On the final day of MWC, Ian Fogg of OpenSignal spoke of how importance low latency will be to enhance the gaming experience for users around, while two halves of the same bad played a set in opposite ends of the hall, one in Vodafone’s stand and the other in Ericsson. While we’re not convinced this is a block-buster usecase, it does demonstrate what can be done.

While the edge plays an important role in content caching and distribution, a more intelligent can help change the industry in numerous other ways due to the idea of ‘dumb devices’. The more processing power, intelligence and storage components which can be moved off these devices, the cheaper they become to manufacture. This could potentially have a scaling effect on certain aspects of the already blossoming IOT segment.

Of course, what is worth taking into account is that there are numerous devices and services which are becoming increasingly complex. Only a segment of the IOT world will become ‘dumb’, and irrelevant of how small it is, it will open the door, encourage growth and adoption, as well as broadening the number of usecases which might be considered commercially unviable currently.

The same argument could be said for smartphones. With more ‘intelligence’, storage and processing power moving off devices, there could be more freedom to evolve the smartphone. Power demands and the necessity of having some components on the devices could be removed. There could be a lot more opportunity to create new concepts.

An interesting counterpoint to this latency usecase for 5G was raised by Bengt Nordstrom, CEO at Northstream, during our MWC podcast. Nordstrom points to the reduction in latency over the last few years, and whether this has encouraged any new (or growth) revenues in the industry. If it is simply improving experience as opposed to adding to the bottom line, is there any reason to believe this wouldn’t be the case moving forward, and does it build a business case for 5G investments?

Looking at the usecases for low latency, there are many, some of which are arguably more important than others. Video chat is one which is mentioned often, especially when one of the parties in a remote location, such as international reporters. Esports is a significant one, and this is a growing industry. Betting and bidding could be another, and while many will think of sports betting first and foremost, the financial sector would certainly benefit as fractions of a seconds could means thousands in trading, especially with automation playing a role. Smart factories, transport systems, air-traffic control, security threat detection, network automation are more. There are numerous examples.

For us, the emphasis on edge computing represents a shift in mentality from the industry. 5G discussions are all about laying the groundwork for the future digital community, but in giving more airtime to topics like the edge, the industry is seemingly more focused on the commercial realities of futuristic connectivity. 5G won’t make the future, it will just enable it.

5G was supposed to steal the show in Barcelona this year, and it certainly was the protagonist, but the edge certainly commanded more than its 15 minutes.

The iStore is a perfect example of how we can make money – Vodafone

Many around the world will use Apple as a benchmark of how to successfully engage the digitally native consumer, though it’s the development of the iStore ecosystem which can be used as a model for the telcos.

Speaking at Light Reading’s Software Defined Operations and the Autonomous Network event in London, Atul Purohit from Vodafone Group pointed towards the slow-burning and long-term investments made in creating the app store as the way to make money in the digital economy. This is ultimately one question which will frustrate a lot of telcos, how will the vast expenses on 5G be recaptured over the next decade?

With 5G, MEC and IoT trends starting to make more concrete impacts on the real world, Purohit suggested a platform model should be built these technologies, with the telcos forming the centre of the ecosystem. This is not the blockbuster cash generator, a silver bullet to recoup lost billions, which some investors might want, but it is a sensible, sustainable business model. In fact, you can already see the benefits today.

Apple’s iStore and Google’s Play Store are excellent examples of careful development of an ecosystem and the rewards which can be realised when a segment matures, but the smart home is another. Most would have presumed the telco would be an excellent focal point for the smart home ecosystem, primarily because the router is already an accepted fixture in the living room, though the likes of Amazon and Google has imposed the smart speaker in its place.

This is an example of inaction than anything else, as the proactive internet giants wrestled the focus of the smart home away from the router and the cumbersome telcos, and onto the speaker. Services and products are being built around the smart speaker, and the financial rewards will be claimed by Amazon and Google. With personalised experienced and IoT trends of tomorrow, the telco still has an opportunity to stake its claim to be the focal point of these ecosystems.

This is a business model which will mature over time, requiring long-term investment and patience above all else, though it is a model proven successful time after time.

The edge will make us cash, but we need to be quick – DT

With telcos searching for elusive return on investment in a 5G world, edge computing could offer some relief.

Speaking at Total Telecom Congress in London, Arash Ashouriha, SVP of Technology Architecture & Innovation at Deutsche Telekom pointed towards the edge as a way to recapture the lost fortunes of yesteryear, but better move quickly or those crafty OTTs will swoop in again.

“With 5G, of course the consumer will benefit, but the challenges are mainly with enterprises; how you build specific solutions on one network, using network slicing,” said Ashouriha.

“What is the real opportunity for operators in avoiding becoming a dumb pipe? It’s going to be the edge. Whatever happens, only the operator can provide the next POP on the mobile phone, never forget that. Are we able to monetize this? If you want to achieve low latency, you have to process the traffic where it is being generated, not 100km away. From an operator perspective, this gives a huge opportunity to leverage the network.”

The theory here is simple. For those usecases which require near real-time transactions, autonomous driving or robotic surgery for example, low latency is critical. Unfortunately, the speed at which data can be moved has a limit, that is just physics, in order to guarantee low latency processing power has to be moved closer to the event. This is an excellent opportunity for the telcos to make money.

However, there is only a small window of opportunity, Ashouriha thinks it might only be two or three years. If the telcos do not take advantage and create a business to capitalise on the edge, the OTTs will swoop in and reap the rewards. All the likes of Google or AWS need to build such a business model is a partnership with one MNO in a market, then the cloud players can leverage the power of their cloud assets to build the case for low latency.

This is the challenge for the telcos; the opportunity is there and very apparent, but are they swift enough to capitalise on it? It certainly wasn’t the case for value added services and it seems the battle for control of the smart home has been lost, with Google and Amazon successfully positioning the smart speaker (not the router) as the centre of the ecosystem. The telcos need to react quickly, as you can guarantee the cloud players are eyeing up the opportunity.

One of the challenges, as Ashouriha points out, is industry collaboration. It doesn’t matter if you are the biggest, baddest telco around, no-one has 100% geographical coverage. To make this edge orientated service work, the telcos will have to develop some sort of framework where holes in connectivity can be plugged by competitors.

To tackle this challenge, DT has spun-off a business in Silicon Valley called MobiledgeX to create a platform where telcos plug in to create an always-connected experience for an ecosystem to build products and services on top of. It’s an interesting idea, and certainly a step in the right direction to capitalise on the edge opportunity.

With the billions being spent to develop 5G networks there is no single silver bullet to realise the ROI, but building a portfolio of services and business models will certainly get the telcos across the line. They just have to get better at capitalising on the opportunity when it presents itself.

Microsoft surges past $100bn in full-year revenues

Microsoft has unveiled its full-year financial results for 2018, with golden CEO Satya Nadella leading the company past the $100 billion revenue milestone for the first time.

It is now amazing to think this was a company which was struggling to adapt to the new world a few years back, but Nadella’s introduction and his stringent approach to cloud computing is paying dividends. He might not be the most charismatic leader in the technology world, but the numbers speak to themselves. $110.4 billion in revenues across 2018, a 14% increase, with the Productivity and Business Processes unit up 13%, Intelligent Cloud leaping 23% and More Personal Computing gaining 17%.

“We had an incredible year, surpassing $100 billion in revenue as a result of our teams’ relentless focus on customer success and the trust customers are placing in Microsoft,” said Nadella. “Our early investments in the intelligent cloud and intelligent edge are paying off, and we will continue to expand our reach in large and growing markets with differentiated innovation.”

Having taken a dominant position in the cloud market during the early days, Microsoft is continuing to tear-up trees at the front of the pack alongside AWS; over the course of the last 12 months the team expanded its global data centre footprint to 54 regions, claiming to be larger than any other competitor. Google might still be able to challenge, though the distance between the top two and everyone else is starting to look more apparent. Having re-established the company as a leader in the digital revolution, Nadella turning his attention elsewhere to build on the solid foundations; edge computing and conversational AI.

“I shared our vision for the intelligent cloud and intelligent edge a little over a year ago, a vision that is now quickly becoming reality and impacting every customer in every industry,” said Nadella during the earnings call. “Everything we have accomplished this year has been about accelerating our lead in this new era and the tremendous opportunity ahead. We focused on the right secular technology trends and growing markets and followed that up with solid roadmap execution.”

IaaS will continue to be the baseline business of the cloud business, though a restructuring of the sales team in recent months and accelerated focus on higher value services will be the cherry on top. The focus on AI and edge services will provide a new conversation with customers looking to capitalise on the connected era, which in turn requires additional storage and data, feeding the baseline cloud business once again. Utility is seen as a dirty word in some segments of the technology world, but it is very appropriate in cloud. Scale and accessibility is key in this business, a concept which Microsoft has grasped; the potential is almost limitless for the immediate future.

It might not be the sexiest part of the industry, but the public cloud is still an incredibly profitable and burgeoning area. Over the course of 2018, IDC predicts spending on public cloud services and infrastructure will reach $160 billion in 2018, a 23% increase from 2017. AWS might still be the leader in this space, though Microsoft is widely regarded as a clear second in the cloud race.

What is clear is the Microsoft strategy moving forward; the edge is critically important to the success of the business.

“I think vision that we have always had is that distributed computing in some sense will remain distributed. So, we don’t split this into, there is an edge computing, there is a cloud computing,” said Nadella. “The need for computing is on the secular basis going to increase. And as you need to reason over larger amounts of data, you need not only storage and compute to be co-located all over as the world get them embedded with computing, that’s what we are building for.”