Investing in Edge: The Customer Perspective and Decision-Making

Aug. 2, 2018
How are companies making decisions about edge computing? Bill Kleyman looks at four real-world use cases of companies using edge strategies to save money and improve their delivery of mission-critical products and services.

You’re a growing business, supporting more users, and are facing a serious challenge. How do you impact ‘closeness’ around your users and the services you deliver? At a very high-level, this is the premise of edge computing and what it can deliver. It’s an intimacy that organizations are striving for when creating new kinds of solutions to impact business services and their users.

In a world where “slow is the new down,” edge systems are specifically designed to support advanced services by placing them as close to the user as possible. Latency is expensive. Amazon found that every 100ms of latency cost them 1 percent in sales, meaning that a page load slowdown of just one second could cost it $1.6 billion in sales each year.  Google has calculated that slowing its search results by just four-tenths of a second could mean a loss of 8 million searches per day – meaning many millions fewer online adverts.

Although every business is different, you don’t have to be the size of Amazon to Google to feel the real-world impacts of latency and network slowness. There are some great ways to overcome latency. One is edge computing, which helps remove these barriers and positively impact the way you deliver key services.

This is a major reason why edge is now supporting so many different types of use cases, and not just faster Netflix so you can binge on “Stranger Things.” In my experience, edge is now being used for:

  • Branch and micro data centers
  • Hybrid cloud connectivity
  • IoT processing (Azure IoT Edge, for example)
  • Firewall and network security
  • Internet-enabled devices and sensors collecting and analyzing real-time data
  • Connecting entire networks of devices
  • Asset tracking
  • Streamlining research
  • Managing inventory for pharmaceutical, manufacturing, and corporate operations
  • Reducing latency for specific services and latency-sensitive applications

This is a big reason why, according to Stratistics MRC, the global edge computing market accounted for almost $8 billion in 2017 and is expected to reach more than $20 billion by 2026, growing at a combined annual growth rate (CAGR) of 11 percent during the forecast period.

Let’s pause here and look at edge solutions from a different viewpoint. I spoke with four customers about their edge deployments to get their perspective. We’ll keep them anonymous, as they are larger organizations, but they were happy to share their experience. First let’s look at their implementations, and then examine why they chose the edge and what went into the decision-making process.

Edge – From the Customer’s Perspective

  • Growing healthcare organization: This one is so cool, and probably my favorite. This growing healthcare organization is investing in wearables and advanced telemedicine. They’re using edge not only to deliver new kinds of healthcare services, but using it to save lives. Edge allows them to deliver powerful experiences while still processing really large data files as well as interactive imaging. Things like MRI and CT scan data is heavily optimized through a delivery process. This lets doctors sitting across the state to see data and communicate with patients. Interestingly, this customer also discussed data privacy, HIPAA, and security. Because of governance requirements, they had to design their edge to ensure HIPAA compliance and that certain data never left a state. This could be something you take into consideration as well. From this customer’s perspective, edge is a direct method to impact healthcare delivery, how patients engage with their healthcare systems, and how well critical data can be analyzed and applied.
  • Financial services organization: As I quickly learned in talking to my friends at this organization, every single second counts. In fact, they pointed me to the “value of the millisecond.” Research from TABB Group estimates that if a broker’s electronic trading platform is 5 milliseconds behind the competition, it could lose at least 1 percent of its flow; that’s $4 million in revenues per millisecond. Up to 10 milliseconds of latency could result in a 10 percent drop in revenues. From there it gets worse. If a broker is 100 milliseconds slower than the fastest broker, it may as well shut down its FIX engine and become a floor broker. For this organization, latency is literally worth $4 million per millisecond. From the customer’s perspective, edge was a no-brainer that allowed them to process data close to key systems and vastly reduce latency for their key financial applications.
  • Large enterprise: This organization had a very direct need. They processed and delivered a lot of video and rich content to a number of users across the world. First, they used large data centers. Then, they used single-cloud delivery model. Unfortunately, this was all rather costly. In comes the concepts of distributed computing and the edge. For this organization, processing data where it made sense, and using a consumption model, allowed them to be a lot more versatile and effective. Gartner points out that around 10 percent of enterprise-generated data is created and processed outside a traditional centralized data center or cloud. By 2022, they predict that this figure will reach 50 percent. For this organization, there are changes in how much content is delivered to a given region. Sometimes a certain region requires more data than others. This bursting capability allows to them use services when they need them, vastly reducing  costs.
  • Large manufacturing firm: This organization is heavily investing into the Internet of Things (IoT) for their manufacturing equipment as well as the products they deliver, so edge computing was really critical for them. They process a vast amount of data that’s outside of their centralized cloud and data center ecosystem. They needed smaller, branch locations to process and analyze this data. They also leverage cloud-based edge services to analyze data from their IoT products. So, in this case, there’s an internal as well as external use-case. This helps the company see where there are efficiencies, where there can be improvements, and how to make better decisions around product delivery. For a company that was giving digital life to analog devices, edge was almost a given.

It’s important to note that you don’t have to be a large organization to leverage the edge. There are a lot of great service providers who are there to support and deliver edge solutions so that you don’t have to “buy” edge infrastructure. This type of model allows you to consume edge even as a small or mid-sized organization. As each of these customers illustrated, edge is an extremely versatile platform; allowing you to leverage the architecture numerous relevant use-cases.

Edge – The Decision-Making Process

After speaking with each customer, I was able to distill a list of key considerations in their decisions about deployment and the services they used.

  • It’s all about your use case. There are so many ways you can use the edge. One thing that I quickly learned that your edge architecture will entire depend on your use case. Do you leverage a cloud-based solution or do you work with a colocation partner? Do you require that your data stay compliant or does it need to go overseas? The decision around the edge will depend on your use case and how your business will continue to evolve.
  • Location, location, location. As mentioned earlier, the decentralized nature of the edge is a great use case. However, this doesn’t mean you need to work with a partner that has a global presence. If you have a regional location or are maybe in just one state, working with local edge options can make a lot of sense. The other factor to consider is whether you’re building your own edge, working with a colocation partner, or are leveraging the cloud. Finally, it’s the size of your edge that will help you select the location. Remember, some edge solutions can be very small, attached to a telecom location, for example.
  • Managing latency and delivery. For those organizations that require very specific delivery metrics, this is a major decision point, as with my financial services friends. Latency down to the millisecond was everything to them. In working with or selecting your edge architecture, you need to have a very clear definition of how you plan on delivering your services, applications, and data. If you have latency-sensitive applications or use-cases, this will absolutely be part of your decision-making process.
  • Capabilities around scale. Similar to the location point, quickly growing companies need to plan ahead when it comes to edge design. So, working with solutions which can support expansion is a key decision point to consider. Also, your edge can be a diverse platform. That is, a part of can be in the cloud, and the other with a colocation partner to create a sort of hybrid edge ecosystem. Remember, capabilities to create powerful points of interconnection between on premise and cloud locations is better than ever before. So, depending on your size and scale requirements, your edge architecture needs to be able to support future demands.
  • Contracts and SLA. In some cases, your edge is a secondary architecture that’s not mission-critical. On other cases, you’re a healthcare organization and your edge services could literally mean the difference between life and death. So, uptime, resiliency, and service level agreements (SLA) become very important when creating an edge system. I’ve seen both ends of the spectrum, where recovery times could range from a few hours down to a few seconds. The decision you make around the edge must involve considerations around contract obligations, uptime and resiliency, and the SLA.

With all of this in mind, it’s really important to note that your own edge journey can be very unique. As mentioned earlier, you don’t have to go at it alone. Just starting the conversation around edge can be extremely enlightening and help you establish your own use case.

Edge computing will continue to evolve and impact the various industries we support. We will constantly try to bring data close to users, and edge is a mechanism to do this. Our lives will become even more interconnected where edge systems will support advanced use cases and vastly improved user experiences.

Explore the evolving world of edge computing further through Data Center Frontier’s special report series and ongoing coverage.

About the Author

Bill Kleyman

Bill Kleyman is a veteran, enthusiastic technologist with experience in data center design, management and deployment. Bill is currently a freelance analyst, speaker, and author for some of our industry's leading publications.

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