Last year, Amazon Web Services (AWS) used its annual re:Invent conference to stake out a strong position in edge computing, making it very clear to any telcos which thought the edge was their natural home, that they would not have the market to themselves. This year, AWS pushed further into the edge cloud space, and announced strategic partnerships with telcos like Verizon and Vodafone, indicating how operators can work with the webscale giant – but implicitly issuing a warning to those which try to be too greedy about the edge and even the 5G value chain.
It is essential that the two sides find a way to cooperate, and to ensure that the combination of cloud and 5G produce more than the sum of their parts. Indeed, without the productive convergence of these two platforms, most of the promises of 5G – in terms of new operator revenues and new enterprise capabilities – will be only partially delivered.
Verizon and AWS announced a 5G edge solution that aims to marry the strengths of both companies, rather as AT&T is doing in its own cloud partnerships with Microsoft, AWS and others. But of course, the more powerfully AWS extends its cloud leadership to the edge of the network, the more enterprise customers will fear a lock-in – something that some operators hope to exploit by offering a converged, high quality connectivity solution that links to multiple clouds, and allows workloads and data to be located flexibly.
Other vendors – and potential 5G operator partners – are also focusing on the threat of the AWS (or Microsoft Azure) lock-in by promising more flexible solutions, with HPE timing its own launch of new multicloud approaches to coincide with re:Invent.
But in the 5G, edge and IoT worlds – which are increasingly inter-dependent in the map of next generation digital enterprise platforms – AWS will be impossible to ignore. Operators may have had a brief window to leverage their in-built advantage over the webscalers – their distributed networks and physical locations – but that is closing rapidly as the biggest opportunities emerge on enterprise premises, rather than public edge sites on cell sites, and as AWS unleashes its Outposts edge offering with full commercial availability.
As well as Verizon, it announced alliances with Vodafone, Centurylink, KDDI of Japan and SK Telecom of Korea, and others are sure to follow. Telcos still have an opportunity in the edge computing market, thanks to their connectivity, their locations and their knowledge of operating highly distributed sets of assets. But beyond their own classic applications – faster video or augmented reality gaming for their established user bases, delivered from public edge cloud sites – they will not be able to do this alone. They need to find a good balance of power with AWS, Azure and Google, and also, a way to cooperate with one another, in order to match the webscalers’ global presence and ability to serve the needs of multinational customers.