One promise of 5G is unlocking latency-sensitive use cases, things ranging form immersive gaming experiences without jitter that takes a player out of the moment to computer vision systems deployed for access control, quality assurance, and other applications relevant to numerous verticals industries. But delivering on low-double-digit latencies is a job for more than just the 5G New Radio air interface; it also requires a distribution of computational resources out of centralized data centers to closer to where data is created. In the push to monetize mobile edge computing (MEC)—something that hasn’t really happened to a meaningful degree if you listen to quarterly reporting from most major global operators—how do you keep your eye on the ball?
Where MEC fits into the sweep of making new money off of 5G investments was discussed during the recent 5G Monetization Forum, available on-demand here. Volt Active Data Head of Product Marketing David Rolfe painted a picture of a future state wherein devices of all types are becoming intelligent and cloud-connected. In this environment, “There has to be some kind of orchestration effort or coordination effort going on somewhere,” he said. “And from the CSP’s perspective, this is another business. This is theirs to lose. Because if they don’t [capitalize], somebody else will. And they have the ability and the know-how, the capability to make an effort in this space. And they should.”
Vodafone Americas’ David Joosten, noting that operators already have spectrum in hand and networks deployed, but in the context of MEC at scale, it’s going to take an ecosystem approach. “If we want to scale, if we want to be flexible, we need to make sure that we offer this technology, or that we partner with other people or other partners in a flexible way to make it accessible to everybody, to make sure that the entire ecosystem is able to benefit. In my view, 5G or MEC…the potential is actually seismic.”
In terms of what that looks like in-market, we’ve seen operators partner with major hyperscalers for a number of reasons, chief among them access to existing distributed computing infrastructure and access to existing enterprise relationships. Some operators partner with the big three cloud providers—AWS, Google Cloud and Microsoft Azure—and provide dedicated on-prem, shared near-prem and consumption-based, public cloud-hosted options. The overarching notion is to meet your customer where they are, and give them the ability to pick and choose in a way that fits with existing organizational buying patterns and IT know-how.
What MEC use cases are operators attracted to?
While the figurative heat around 5G as an enabler of massive IoT has cooled from its early days, there are some break-out use cases which, rather than being hyper-tailored to a particular vertical, are more broadly applicable. Volt Active Data’s Rolfe called out autonomous guided vehicles steered by software using video feeds from cameras, and “vision-based use cases…to control traffic around schools, for instance.”
“What these things have in common is too much data at the edge to plausibly move elsewhere, or for security or sensitivity reasons you don’t want to move it elsewhere,” he said. “And there is also a requirement to coordinate or orchestrate it at some level. So they are not talking about individual components acting as individuals. You are talking about somebody turning the enterprise into a team. And from the CSP’s perspective, the opportunity is for managing this stuff. Because as time goes on, these environments will get more and more complicated.”
Rolfe continued: “There’s probably a significant market need for orchestration management and general device herding at the edge. And the advantage of going for that space is one, it’s something the CSPs have a broad familiarity with. And two, it’s probably a safer bet. You are selling shovels instead of digging for gold…Because a lot of these edge use cases are … They go from speculative, to surreal, to downright ludicrous in some cases, and so we’re seeing a shakeout as we are in the market generally. But if I were a VC right now, I’d be putting my money in managing the edge, not necessarily trying to place my bets on the right place on the roulette wheel for a specific use case. But the general pattern is collectivizing behavior and absorbing lots of data, but managing the data behavior collectively somewhere else.”
Joosten picked up on this idea of operator as manager of MEC applications delivered by multiple parties. To deliver on meaningful use cases, he said, “You need to work with the complete ecosystem to drive a successful deployment.”
MEC takes an ecosystem
As noted earlier, this ecosystem-forward approach often involves a major hyperscaler. Joosten cited Vodafone’s tie-up with AWS to use the cloud giant’s Wavelength solution. “We can set that up in a stadium within minutes just by connecting the technology through 4G, 5G, [and] using Wavelength’s greater let’s say reliability and lower latency than the public internet…It’s just one of the examples that a hyper scaler, plus network, plus 5G, really puts an application that benefits from that technology. And with that you can really create quite amazing business cases.”
Vodafone Americas, which also partners with Microsoft Azure for the cloud piece of the MEC puzzle, has also combined the technologies into applications that, again, are applicable to multiple types of business. Things like mixed reality and drone-based detection.
Ecosystem development, Joosten said, is “critical…in this space. I think it’s important to build enabling technologies and what we call here at the intersection between let’s say 5G, edge, hyperscaler clouds…The key challenge I think is more around the complexity of the implementation. If you can demonstrate simplicity, it’s much easier to sell. So often I would say by levering preexisting relationships with system providers as well as hyperscalers it makes it much easier for customers.”
Advanced services require an evolution of billing
Imagine a world where these private, public and hybrid MEC nodes are interworked with private, public or hybrid 5G networks, app developers have developed, and enterprises have bought in. It’s a multi-party solution creating meaningful new business value. If the operator, as Joosten suggested, serves as the manager, how can they extend the implementation simplicity all the way through into billing? And how does BSS need to evolve in the context of consumption-based pricing with network and cloud components delivering better than best-effort connectivity?
Gotranverse Vice President of Customer Solutions Tim Pflugradt picks up the story. “The current legacy systems have a very static product catalog that allows you to charge one price or two prices for a specific thing.” That’s not really going to work as the IoT is connected to 5G and MEC. ”So by having a billing system, monetization system, that has a less static and more flexible product catalog and pricing rules that can be changed on the fly and have more intent-driven pricing than contract-driven pricing, I think that’s where we’re seeing a whole lot of challenges in the billing side of it.”
This idea of intent-driven pricing can be a differentiator for operators, he said. It gives operators the ability to be transparent. In a hypothetical example, “Every one of those devices is functioning differently, has different latency expectations, resolution expectations, things like that.”
Tying that back into the need for an ecosystem approach to monetizing MEC, Pflugradt said CSPs need to “sign up various different partners to provide those end services to the end customer, and then be able to monetize that end customer for those end services, but also compute a revenue share for the partner. So the partner is incentivized to grow the market, to add more devices, add more functionality, add more stuff, but to drive also new customers to the CSP.”
Stay turned for the next part in this discussion of how MEC can help operators monetize the massive investment put into 5G.
