In recent years, cloud computing has revolutionized enterprise IT. Widespread access to the cloud’s scalable, reliable, powerful computing resources have unlocked countless opportunities for businesses and their customers.
But this decentralization has resulted in vast distances between data centers and end-users, making latency inevitable. These processing delays limit the viability of certain applications—and rule out others entirely.
As IoT devices proliferate and enterprise networks expand, centralized cloud computing alone cannot keep up with the pace of big data management and activation. Maximizing the potential of these new IoT use cases requires shifting processing power to the network edge—and the innovative enterprises who make the transition can expect outsized rewards in the five areas below.
Better customer experiences
The challenges facing the retail industry help illuminate how moving computing to the edge can make benefit enterprises and their customers alike.
Although 51% of American consumers prefer to shop online, e-commerce has not rendered brick-and-mortar retail obsolete. The growth in digital experiences has transformed customer expectations surrounding the physical retail experience. While the personalization and interactivity e-commerce shoppers have come to expect are easy to provide online, translating them offline presents major technical challenges.
Much-touted solutions like AR/VR show promise, but come with tremendous bandwidth and processing requirements. Sending this data round-trip to the cloud strains even the most robust wireless networks, and still introduces unavoidable latency – a significant problem for stores vying to deliver real-time, in-the-moment interactivity to their customers.
Edge computing, on the other hand, overcomes latency and bandwidth issues by shifting computation closer to the input devices themselves. When it comes to creating seamless in-store experiences, immediacy is key.
Imagine a regular customer walks into a coffee shop and the minute they’re through the door, a digital display offers them a one-click option to order “the usual.” Maybe they hesitate for a moment, at which point an algorithm running on the device generates a personalized coupon on the fly. Enticed, the customer taps yes, and the POS system automatically syncs with their smartphone, registering the payment. Capturing valuable micro-moments like these is only possible by working around the latency inherent in the cloud.
Better ROI
Modern enterprise IT budgets can represent up to 6.9% of total revenue. With such heavy investment, even modest gains in technological efficiency can have substantial impact on the bottom line. Edge computing allows companies to reduce network operating costs by lowering the amount of data that needs to be sent to the cloud for processing and analysis.
This shift is already underway. Gartner estimates that in 2018, nearly 90% of enterprise-generated data was processed in a centralized data center or cloud. The same study projects that by 2022, only 25% of data-processing will be centralized, with the remaining 75% occurring somewhere on the network edge. This shift will not only enable enterprises to reduce cloud computing expenses, but also will help improve operational efficiency.
Virtualization and consolidation
Edge computing will further improve enterprise efficiency by accelerating another networking trend already well underway: the shift from purpose-built infrastructure to virtualized software solutions. Combining centralized orchestration of edge resources with virtualized solutions capable of running atop multiple devices will consolidate and simplify software, decreasing the amount spent on hardware, infrastructure and storage.
More agile business practices
The real-time analytics and context-driven intelligence edge computing generates will empower more agile and proactive business practices. In the coming hyper-connected edge economy, instant access to relevant metrics will produce new opportunities for value capture and creation. One exciting possibility is the prospect of dynamic digital advertising exchanges capable of optimizing placements based on traffic, events and prior performance. Participants in such a network will be able to maximize ad revenue and might even be able to sell their own underutilized display space to other retailers.
Envision a gym that knows when its members have just finished a workout, based on data from connected exercise equipment. After an hour on the treadmill, the gym may charge a premium to allow a nearby health food store to advertise on the treadmill’s screen. If that particular gym member shared traits with previously successful prospects, the rate might be dynamically adjusted even higher. In turn, the gym might pursue a similar arrangement to send targeted messages to the health-conscious customers at the local health food store. Transforming idle screens into consistent revenue generators is just one potential benefit for enterprises ready to embrace the new edge economy.
New revenue
In addition to optimizing existing operations, edge computing will also enable enterprises to pursue entirely new lines of business. Dramatic reductions in latency are necessary for commercializing technologies like autonomous vehicles or robotic surgery, where every millisecond matters. The consistent and instant connectivity edge computing provides might be the key to making these experimental innovations commercially viable and safe. And while self-driving cars may still be far down the road, edge computing is already proving its potential in other industries.
Brick-and-mortar retailers are now using new “endless aisle” technology to allow shoppers to seamlessly move from physical to digital experiences. In-store touchscreens connected to real-time inventory data let customers check if an item is in stock. If what they’re looking for is not available, the system can automatically suggest a similar item currently in stock or give the option to have it delivered directly to their front door. And if the customer opts in, the system can recognize their preferences and automatically make suggestions the next time they shop at that store (or at any additional locations). Technologies like “endless aisle” create an entirely new modes of blended retail that would not have been possible without edge computing.
As edge computing continues to gain momentum, enterprises are beginning to appreciate its potential impact. Whether it is optimizing internal operations, improving customer experience, capitalizing on hardware, enhancing existing offerings or pioneering new ones, the edge computing revolution promises to affect every aspect of the enterprise. Savvy organizations able to harness this emerging technology will be able to take full advantage – while those that ignore developments on the ground and resist the shift may be stuck with their heads in the cloud.
