The Edge Computing Opportunity in Asia Pacific

Iain Gillott

Iain Gillott
President
IGR

In late 2018 in Singapore, I presented some preliminary estimates of how big the edge computing opportunity is in Asia Pacific.  The audience were the major players in the AP region, those who will design and deploy edge computing in the years to come.

Asia Pacific is, of course, a highly diverse region with massive variances in the size of countries and economies, languages and cultures.  Some other regions of the world are far more homogeneous - not so Asia Pacific.  This makes forecasting technology adoption in the region particularly challenging.  As a result, iGR split the region into several parts to more accurately reflect the trends, economies and cultures in each.  We then sum up the numbers to give a forecast for the entire region.

For edge computing, the opportunity is in two parts: mobile operators and enterprises.  Let's deal with the enterprise opportunity first.

For enterprises, edge computing is being deployed today in a variety of environments.  For example, a manufacturing plant can use edge compute to aggregate sensors from disparate systems to give a consolidated ‘view’ for management systems.  Or a transportation company can combine feeds from various sensors on a ship or truck, analyze the inputs and decide which need to be sent to the cloud for additional processing - this saves money by not sending all of the sensor traffic to the cloud via a cellular connection.  Note that in these two examples, 5G or even LTE is not required - the manufacturing plant may be consolidating data from ethernet connections, for example.  This is an important point - edge computing does not have to wait for 5G to be deployed to provide value today.

iGR sizes the enterprise edge computing opportunity in Asia Pacific between 2018 and 2023 to be $37.8 billion - this includes the hardware and software for the edge computing platform but not wireless and wireline networking connecting to the platform.  The forecast assumes that edge computing will be used with Wi-Fi, LTE and, soon, 5G.

The second opportunity is for the mobile operators - this is when an operator puts edge computing in their networks and hosts applications for customers, consumers, etc.  For example, a multi-player game that uses augmented and/or virtual reality will require both high bandwidth and low latency over a public network.  This would be ideal for 5G combined with edge computing.  The forecast spending by the mobile operators on edge computing between 2018 and 2023 is just $187 million.  Why so low compared to the enterprise opportunity?  Two reasons: firstly, it will be a couple of years before the mobile operators put edge in their networks; and secondly, this is just for the hardware and software.

In fact, the mobile operator edge deployment is likely to be in conjunction with the move to 5G new core - this is the new packet core that is required to support the 5G applications and services.  New core deployment will not start until late 2020 at the earliest and more likely 2021 and beyond for most operators in the region.  New core is a fully virtualized environment and edge compute will be part of this.  Since 5G needs edge computing architectures to achieve the promised low latencies, this deployment strategy makes sense.  The mobile operators in AP are expected to spend $4.1 billion on new core - this therefore more accurately reflects the spending on edge computing by the operators.

Asia Pacific represents a significant opportunity for edge computing architectures over the next five and ten years.  Together with 5G, edge computing represents the largest rearchitecting of cellular and mobile networks, leading to new services, applications and devices. 5G networks need edge computing to deliver on the performance promised, but edge computing does not have to wait for 5G - enterprises are deploying today.

Iain Gillott
President, iGR
 
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