In much the way that the past decade in datacom was defined by video applications, the next decade will be defined by smart systems – self-driving cars, Internet-of-Things (IoT) and AI (very smart systems). At the infrastructure level, what CIR thinks this will mean is that the priority will be low latency; the video revolution has mostly been about raw bandwidth. This trend is creating new opportunities for edge computing and at the core of this opportunity space is the “edge platform.” The edge computing platform is a software environment that is used to write and run software applications, which can be customer facing solutions for business apps or solutions or even management solutions. As an aside, it seems appropriate that software should be such an essential underpinning to a revolution in which smarts is so critical.
Understandably then that CIR concluded in our recent study of edge computing infrastructure [URL] edge platform software is one of the fastest growing areas in the overall edge computing market. There are also other factors that make edge computing platforms a near term revenue opportunity.
# Market open to new entrants: Some of the big IT/computer firms will no doubt crowd into the EC platform before too long. But for now the early stage of the edge computing space and the fact that the functionality and performance required for edge computing platforms are not well defined means that there is no clear market leader. So the market for edge platforms remains open for competition:
# The money is there: CIR notes that the edge computing platform market seems to have garnered a lot of interest from venture capital and early-stage investors. Edge computing platform firms are among the best funded companies in the overall edge computing market. In addition to the usual VCs, we note that Microsoft, IBM and HPE have all made acquisitions in edge computing startups. As far as VC investment goes, consider Pensando. This edge computing platform provider raised $145 million from HPE and Lightspeed Venture Partners is a Series C funding in October 2019.
# Open-source potential: Based on developments to date, we think that the edge computing platform market will be slanted toward open source offerings. Even large vendors in this space such as IBM and Baidu have announced open source edge offerings. Baidu in January 2019 announced the launch of its open-source edge computing platform called OpenEdge.
# Room for service providers too: CIR believes that service providers are expected be large adopters of edge platform as a means of providing customers with improved quality of service through developing customer facing apps at edge platforms. By way of an example. Deutsche Telekom announced a partnership with Altran to create an Open Source, Low Latency Edge Compute Platform for operators, to enable them to develop and launch 5G mobile applications and services faster.
# A Platform-as-a-Service Opportunity (PaaS): Finally, CIR believes PaaS, once it is widely available, will see rapid growth since a large number of third-party app developers as well as telcos and enterprises will look towards developing customer-facing edge computing solutions/apps. We think in particular that PaaS will provide an advantage as the whole platform development process will become OPEX based. And, of course, XaaS offerings of all kinds are very much in fashion right now.
