Multi-access edge computing (MEC) has turned the corner from being seen as an interesting alternative to the hub and spoke architecture of cloud computing to being recognised as a vital technological enabler of low latency, connected intelligence. George Malim examines the latest analyst predictions for the technology’s increased uptake.
It comes as no surprise given the drivers that are affecting the technology market that substantial growth in MEC is expected. The arrival of 5G, with its low latency communications capability, the dispersal of more and more people and endpoints to the edges of networks, and the increased familiarity with applying intelligence at the edge have all come together to provide important stimulae for growth. This is borne out by research from Dell’Oro Group which projected in its July 2020 forecast that the MEC market will grow at a compound annual growth rate (CAGR) of 169% between 2019 and 2024.
Coronavirus-related lockdowns and new ways of working are demonstrating that more needs to be done from remote locations and, with office work now moving away from large, centralised locations, so too are computing resources. Dell’Oro’s latest estimate is a revision of its January 2020 forecast and reflects the industry collaboration and momentum being achieved. The firm says that this traction has caused it to double its predicted CAGR. Nevertheless, the firm does not project steep immediate growth. It continues to expect the market to start slowly before accelerating significantly in the second half of the 2019-2024 forecast period. The firm expects China to be the leading market in terms of the scale of MEC deployments and the country will represent the largest regional market.
Frost & Sullivan’s recent analysis, 5G and Edge Computing—Cloud Workloads Shifting to the Edge, Forecast to 2024, also finds that edge computing is a foundational technology for industrial enterprises because of the lower latencies, robust security, responsive data collection and reduced costs it can offer. The firm reports that, in spite of being at a nascent stage, the MEC market is estimated to grow at a CAGR of 157.4%, garnering a revenue of US$7.23bn by 2024, up from US$64.1m in 2019.
“The recent launch of the 5G technology coupled with MEC brings computing power close to customers and also allows the emergence of new applications and experiences for them,” said Renato Pasquini, the Information & Communication Technologies research director at Frost & Sullivan. “5G and MEC are an opportunity for telecoms operators to launch innovative offerings and also enable an ecosystem to flourish in the business-to-business (B2B) segment of telecoms service providers using the platform.”
A recent Heavy Reading survey has also uncovered that communications service providers (CSPs) see MEC as an opportunity. Almost 85% of network operator professionals polled believed that edge computing would be critical or important to their network evolution strategy, the firm says.
For Pasquini, the CSP opportunity comes second to the edge applications and software market. “From the perspective of the MEC ecosystem, software – edge applications and solutions – promises the highest CAGR followed by services,” he said. “[These are composed of] telecoms operators’ services, cloud providers’ infrastructure-as-a-service, and edge data centre colocation services.”
MEC is not simply a CSP opportunity. Frost & Sullivan predicts that approximately 90% of industrial enterprises will utilise edge computing by 2022, presenting immense growth prospects for MEC market participants. Consulting firm, Deloitte, has reported that more than 80% of executives surveyed in a recent report believe that advanced connectivity is very or extremely important to their ability to capitalise on advanced technologies such as artificial intelligence (AI), edge computing and data analytics. In fact, the importance of edge is being recognised to the extent that ABI Research expects AI chipset revenues from edge deployments will dethrone cloud as the leading market by 2025. At that point edge AI chipsets will generate revenues of US$12bn per year, outpacing the cloud AI chipset market, which will reach US$11.9 billion in 2025.
Cloud remains at the centre of AI today with most workloads served in public and private clouds. However, the industry is beginning to shift away from centralised cloud resources driven by the need for privacy, cybersecurity and low latency and AI training and inference workloads on gateways, devices and sensors is starting to happen. Recent advancements in key domains, including connectivity to cloud computing, new AI learning architecture and high-performance computational chipsets have played a critical role in this shift, the firm says.
“As enterprises start to look for AI solutions in the areas of image and object recognition, autonomous material handling, predictive maintenance and human-machine interface for end devices, they need to resolve concerns around data privacy, power efficiency, low latency and strong on-device computing performance,” explains Lian Jye Su, a principal analyst at ABI Research. “Edge AI will be the answer to this. By integrating an AI chipset designed to perform high-speed inference and quantized federated learning or collaborative learning models, edge AI brings task automation and augmentation to device and sensor levels across various sectors. So much that it will grow and surpass the cloud AI chipset market in 2025.”
The pandemic has disrupted demand for many smart consumer devices, notably smartphones, smart home, and wearables. These would have helped further stimulate deployment of AI accelerating technologies at the edge and, at the same time, implementation of AI in industrial manufacturing, retail and other verticals has been postponed or put on hold. This is likely to be only a temporary state of affairs.
“ABI Research expects the market to rebound in 2022. It is important to note that the impact on the chipset supply chain has been relatively minimal since fabrication factories in Singapore and Taiwan remained operational during the outbreak,” Su points out, adding that vendors of key connectivity technologies such as 5G, Wi-Fi 6, and autonomous solutions such as autonomous vehicles see minimal impact to their product roadmaps. “Catalysing many other emerging technologies, edge AI will pave the way for a variety of new business opportunities in the consumer and enterprise segments.”
Covid-19 may have caused a slight pause in production of technologies that pave the way towards intelligence at the edge but it has also made people look in more detail at the edge as they assess what the new world of work will look like. In addition, many believe lockdowns and quarantines have only accelerated digital transformation in general and that can only further accelerate the march towards greater intelligence at the multi-access edge.