“The shifting trend in Data Centre setups is giving telcos a unique opportunity to move up the value chain by repositioning themselves as cloud carriers,” says Franck Turquet of DataQube
Edge Data Centres (EDC) are changing the face of ITC in the same way that smartphones (more specifically the iPhone) transformed mobile communications. And this transformation in turn is impacting big tech companies and affecting the business models they’ve come to rely up on to build their data centre empires.
As edge computing technologies and definitions are still evolving, different terms are sometimes used interchangeably or have been associated with a certain type of stakeholder. For starters there is still huge ambiguity as to what constitutes an edge data centre. Some describe EDC as a data centre that is not located in the public cloud. Others define EDC as a mini data centre situated at the edge of mobile networks (base stations etc). Indeed, some define EDC as a purpose-built micro data located on premises within a large enterprise.
What these different interpretations have in common, however, is that the data handling and storage is no longer happening centrally but much closer to the end user. And this shift in data handling is breaking the hyperscalers’ paradigm of over two decades, leaving space for new entrants to join the arena.
EDC and edge computing is being driven predominantly by 5G and the wealth of technologies and applications this next generation network is expected to power. But the edge phenomenon isn’t a topic to future discussion. Edge computing is already happening without 5G going mainstream and what’s more it’s gaining momentum. Indeed, Gartner predicts that 75% of all data will be generated outside of the classic private or public cloud by 2025, while Omdia envisages that not less than 7 out 10 enterprises will invest in EDC over the next 12 months.
EDC as a business model follows three fundamental laws:
- The law of physics: processing and handling data at the point of creation is much more efficient than moving said data to a central location – even over superfast networks.
- The law of economics: 90% of all global data has been generated over the last two years according to Forbes. The CAPEX and OPEX costs of transporting data at these levels are unsustainable long term.
- The law of the land. Owners of real estate in highly urbanized or industrialized areas have a strategic advantage to host EDC facilities.
Enterprises, service providers, property owners, landowners ICT suppliers, hyperscalers are all jumping on the EDC bandwagon and becoming Edge Data Centre providers because the opportunities are unprecedented. Everyone that is except the telcos. Even though they have a strategic advantage in the edge computing space they still remain slow adopters of EDC.
With EDC, Telcos could make significant infrastructure savings, reducing transport costs by nearly 90%. They could generate new revenue streams by selling high value services to their existing enterprise customers in retail, finance, manufactures, industries, governments etc. all of whom have either already implemented (or are planning to implement) innovative applications using AI, IoT, VR/AR, live streaming etc. However, as has happened previously, Telcos are failing to capitalize on this lucrative opportunity and are losing out to the tech giants.
Simultaneously, Telcos are struggling to retain the bottom line. If telcos want to increase their profit margins, they need to lower their infrastructure costs or generate new revenue streams. Most of them have implemented diversification strategies as their revenues flatten and their investments in 5G and IoT are non-optional. EDC presents telco organisations with a unique opportunity to become highly profitable entities once again by leveraging their strategic advantage, but this is not happening.
So why are they still slow adopters?
Telcos are risk-averse – their 3G and 4G spectrum investments did not reap the rewards they expected. As such, their appetite for new business venture like edge computing isn’t very high. Moreover, many telcos struggle to properly understand their end customer requirements, and this has resulted missed business opportunities in OTT over the last few years.
With DataQube the risk is very limited. Our unique edge data centre system is available on a leasing basis, allowing customers to stay in control of their cash flow while taking the necessary steps to move toward full ownership of their DataQube modules. Within a 6-month timeframe, Telcos could have a fully working edge Data Centre facility up and running, generating between £8K – £15K per rack per month. If the location isn’t proving to be lucrative, DataQube modules can be easily relocated to alternative locations with no disruption nor downtime.