Three companies — Amazon.com, Microsoft and Google — quietly dominate the world of cloud computing.
With more more than 100 giant data centres worldwide, they rent out computing power to all manner of customers, making billions of dollars along the way. In fact, cloud computing has done more to fuel Amazon’s earnings in recent years than its e-commerce business.
But there’s a threat looming on the horizon, quite literally at the edge of the network. With so many mobile devices and sensors now connected to the Internet — and relying on artificial intelligence — more people and companies need their computing power close to them. For everything from fast analysis of road conditions to streaming holographic concerts, remote data centres are just too far away.
That’s going to hand a huge opportunity to wireless carriers, which are building fast 5G networks to handle the task. And create a threat for the dominant cloud computing players, according to telecommunications analyst Chetan Sharma.
“Over time, cloud will be primarily used for storage and running longer computational models, while most of the processing of data and AI inference will take place at the edge,” said Sharma, who has written a report on the topic sponsored by software provider AlefEdge. He pegs the size of this so-called edge computing market at more than US$4-trillion by 2030.
Wireless carriers and the owners of cell towers have a big advantage in the edge computing race: not only do they control access to high-speed telecoms networks, they have valuable real estate, such as tens of thousands of cell sites.
Cloud computing isn’t going away by any means. But there’s more pressure on the industry’s Big Three to team up with wireless carriers, so they’re not left out of the burgeoning edge market.
‘Partner up’
“The big players realise that at a minimum they need to partner up with operators to get access to their real-estate property,” Sharma said. Already, AT&T — the second largest US wireless carrier — has joined forces with Microsoft and IBM, two cloud providers.
“Our goal is that our partners are wildly successful,” said Sam George, a cloud executive at Microsoft. “If our partners are wildly successful, we’ll be wildly successful. There’s a lot of money to be made for partners.”
Amazon and Google declined to comment on their plans.
AT&T has hundreds of workers focused on edge computing, and it’s “a core part of our 5G strategy”, said Mo Katibeh, chief marketing officer of AT&T’s business division. “This is one that takes a village.”
IBM, meanwhile, is also working with carrier Vodafone Group in Europe. “The networks are essentially themselves becoming a cloud,” said Steve Canepa, IBM’s global MD for the telecoms industry. “The telcos today have a point of presence at the edge, and that becomes a great place to have an extension of the platform.”
Cloud providers in China — such as Alibaba Group and Tencent — invested in carrier China Unicom two years ago. And more such investments and partnerships could be coming, Sharma said.
For other tech companies, including chip makers like Intel, the hope is the shift leads to a bigger opportunity for everyone. “We see a rapid convergence between the cloud providers and connectivity providers,” said Caroline Chan, a GM at Intel. “In our view, it’s a bigger pie.” — Reported by Olga Kharif, (c) 2019 Bloomberg LP