Edge Growth Will Exceed That Of Cloud

It’s my assertion that edge, fog, edge computing and any or all services that need one or more of these infrastructure deployment strategies will grow at a pace that will make the exceed the early years of modern cloud computing growth.

Cloud – The Early Years

Cloud as most of us know it, was born with the cuddly name of “AWS S3” on March 14th 2006. Five and one half years later Derrick Harris wrote for Gigaom that AWS was approaching a billion dollar business. Admittedly AWS wasn’t the only cloud service offered in the world and it didn’t include services like SaaS (Salesforce or Netsuite etc.) but it was certainly the lion’s share of IaaS on the market. In 66 months, Amazon had built a cloud business worth $1 billion in sales, very impressive. Eight years later in 2019, cloud and cloud services had estimated global sales of $227.8 billion (Gartner).

Edge/Edge Computing – The Early Years

In 2019 the global Edge Market was valued at $3.5 Billion in sales. Admittedly the cloud and edge markets are diverse and made up of other services beyond a simple comparison of IaaS equivalents, but it’s still extremely impressive that a market that was largely non existent in 2016, was estimated at $3.5 billion three years later. It’s also worth noting that the market is estimated to grow at a CAGR of 37.4% to total sales of $43.4 billion in 2027.

Thoughts on Edge Market Maturity

In 1992, those of us in tech and old enough (like me), remember using simple tools like Mosaic to hunt for mostly useless information on that would become “the internet”. It was a tech toy. The vast majority of us saw the internet as interesting and potentially valuable, but few in 1992 were thinking “wow, this is going to change the world”. By 1996 the “toy” had matured to the point that even mid-sized businesses needed a web page or they in effect, didn’t exist.

I see 2020 Edge as approximating 1993 for the internet from a maturity standpoint. I expect that by 2023 most of us will already be using the “edge” knowingly and unknowingly in ways we can’t yet foresee. I believe that by 2023 the edge will have matured to a point similar to 1999 for the internet and that we will have accelerated past the basic business models associated with 1999 to a vast number of new ones. I believe this rapid growth will occur for the following reasons, among others:

  • Latency: Latency is already considered a driver for edge, but most think of latency as important only for those apps that can’t effectively function without low latency. I’m betting that we will discovery the benefits of low latency in many applications that we say are “working just fine” today and this will help drive growth
  • Analytics at the edge is likely a requirement for a number of reasons, not the least of which are real-time application/customer needs. Data analytics at the edge will also be required in many cases due to the large volume of data being created combined with the cost and difficulty of centrally locating (I.e, public cloud) it.
  • Lowering barriers to entry will change the assumption for what business models can be successfully supported today vs. at some point in the future. Current barriers involve access to low cost data center capacity, disparate application support and deployment strategies, high cost of networking, lack of general support or easy availability of 5G, and assumptions of what’s even possible from financial or technical standpoints.
  • Assumptions: Many of the technologists I’ve spoken with or advised on edge strategy have come to me with the same concern; “how can we deploy to the edge when the premium of build and management is too high to support the business model?” My answer to that is “challenge your assumptions”. If your strategy is that you plan to stretch, like a rubber band, your current infrastructure, security, and app designs over the “edge market” then yes, you’re right, it would be too expensive. In my book, being at the edge is too valuable an opportunity and when the value is there, it’s time to break assumptions. Do you really need air conditioners or generators for even small data centers. Do you really need high priced servers with fans and specialized management tools. Do you really need the same number of staff per X number of machines? The answer in most cases is, no.

I Think the Edge Market will Exceed the Estimates

Even though we have 20/20 ish hindsight vision as to how the internet and cloud markets grew beyond original assumptions, I believe we’re still underestimating the value of the future edge market. I’m putting a flag in the ground right now to say that I think the $43 billion number by 2027 is off by 300% and that in the same 14 years it took cloud/SaaS/PaaS, etc. to reach $218 billion, all Edge services will be worth closer to $300 billion. In fact, I believe it so much that I’m staking my future on it by doing my part with Edgevana to lower the barrier to entry for enterprises and suppliers to successfully exploit the opportunities.

We won’t recognize our technology landscape seven years from now. Our interaction with technology will be so pervasive (good or bad) that we won’t know how we managed without it. Responding to and interacting with your environment, whether in a car, a retail outlet or a city park will be as natural to us as it is today for someone under 30 when they say “don’t give me details dad, just text me when you’re there”.

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