Vapor IO/Open Grid Alliance on leveraging edge compute to digitally transform Las Vegas
Internet of Things (IoT) devices using cellular networks reached 2.7 billion connections in 2021, according to the November 2022 Ericsson Mobility Report, and by 2028 that figure is projected to increase to 5.5 billion. As the vision of IoT comes to life (albeit potentially slower than expected in the early days of 5G), “The internet we built is not the internet we’re going to need,” according to Matt Trifiro, CMO of edge specialist Vapor IO and co-chair of the Open Grid Alliance. This is the basic premise Open Grid Alliance members have taken, and Trifiro explained what that means during the recent 5G Monetization Forum, available here on-demand.
He continued: “We built an internet that was primarily humans talking to machines oor humans consuming content that came from machines. And now we’re moving into a world where most of the traffic on the internet is going to be machines talking to machines. And machines operate in microseconds and nanoseconds and milliseconds, and humans operate in ones of seconds and tens of seconds and minutes. And so there’s an entirely different infrastructure that’s required to deliver on these, this next generation of capabilities.”
Taactically what this means, Trifiro said, is that infrastructure from real estate to fiber to data centers to software to radios need to change too. Trifiro used the city of Las Vegas, a very tech-forward locale with strong city-level guidance, as an example. Trifiro explained that Vapor IO used Las Vegas as a “showcase” city where the company first built “layer zero…So we put down data centers, we take fiber, we light the fiber, we then put a software-defined network on top of it, but that’s like this under-structure. All of these other services need to layer on top of that, and there’ll be other people that do what we do, but we were the first.”
The point here is that building out and leveraging the edge is a multi-party play. Beyond the technology piece, he also called out the “complexity of the business models because usually these vendors have a lot of different technologies and they all want to make money. The enterprise just wants to buy it, but wants a single SKU, and they want to buy it as a service.” He divided the market into three broad buckets: wired and wireless private networks, “near-premises” compute nodes to handle latency-sensitive use cases, and as a service applications like video inference for public safety, building security, smart retail, and others.
Monetizing edge infrastructure
So when the infrastructure and service layers are in place, what’s the route to monetization in this multi-party scenario? Trifiro noted the complexity of that answer but, in the context of private companies delivering infrastructure to catalyzing public and private user onboarding, he said, “By bringing new infrastructure into a region, particularly an infrastructure that is largely paid for by private companies, but might be catalyzed by public partnerships, you can create economic impact that goes way beyond just Vapor IO making money because it attracts new businesses to that area because now they’ve got services that they can’t get anywhere else.”
Open Grid Alliance conducted an extensive assessment around TAM in Las Vegas for the types of services delineated above, and sees long-term upside. Trifiro said the group has replicated that study in 12 other cities suggesting that the Las Vegas model scales. But in terms of the video-centric and other end user applications that would benefit from the Open Grid Alliance approach, what’s the generally timeline in terms of ROI and new revenue generation?
First off, Trifiro said the economics for consumer-facing applications aren’t in place. And in the case of something like enterprise use of augmented and virtual reality, “I don’t know of a single enterprise that’s adopted…at scale. It’s going to happen…but it’s not something that has happened.” Back to the apps that ride on top of videos, “If they’re being deployed faster than they can be analyzed—and what I mean by that is the human solution of guards sitting in a room or looking at cameras—that’s just not scalable anymore.”
But, big picture, it comes back to latency-sensitive applications that enterprises will ultimately want to run near-premises; in this case, the Open RAN architecture of splitting functionality between centralized and distributed units plays into market trends. He called out the popular 7.2 functional split on the fronthaul interface between a distributed unit and radio unit. Trifiro said a target latency of 100 microseconds does two things in this context. “You can deliver workloads off-premises that appear for all intents and purposes being on-premise. In a 7.2. Split, the only thing you have to have on the other side [of the distributed unit] is the radio. And the radio is relatively inexpensive…You can deliver a private 5G experience into a warehouse, a 7-Eleven, a Starbucks, a Target, just by hanging the radios and connecting to the internal network.”
So this architectural approach opens up the three buckets outlined earlier, all using shared infrastructure and all scalable based on demand. “If every company has to go build what looks like a data center in order to have private 5G, you’re going to have a much lower addressable market. But if you can pull a lot of that capability back to the infrastructure, then you’ve got a much larger addressable market. So that 100 microseconds was very, very important for us…So it’s a very different model than the internet today where maybe we’ll have a good Zoom call, maybe we won’t, depending on whatever is going on.”
When it comes to edge, “We cannot solve this alone”
Final thoughts on building, taking to market, running and monetizing a flexible, edge-centric approach to connectivity and services? “It’s complicated…It involves charging and billing and all kinds of things, but all the members are motivated. That’s the point of the organization is everybody got together and said, ‘We cannot solve this alone. We have to solve this together.’”
