Operators such as Verizon and AT&T have made announcements about partnerships with big cloud providers, including AWS and Microsoft Azure, to co-build edge compute locations. But we’ve not heard a lot from the cloud providers, themselves, about their perspective on edge compute.
However, Microsoft’s EVP of Worldwide Commercial Business Judson Althoff talked a little bit about the cloud giant’s edge aspirations yesterday at the UBS Global TMT Virtual Conference.
He said Microsoft is increasingly putting compute ability at the edge. “There are scenarios where reasoning at the edge and having compute at the edge, and then deciding when you round-trip to the cloud for model propagation makes a lot of sense for customers,” said Althoff, according to a Seeking Alpha transcript.
Some use cases he mentioned for Microsoft edge compute included precision agriculture, factory operations and private 5G networks.
“Being able to reason at the edge will be an important part of computer architectures moving forward,” said Althoff.
In terms of private 5G networks, the company has, this year, acquired both Affirmed Networks and Metaswitch, and seems to be plotting a business in 5G private wireless offerings.
Microsoft also sees tangential return-on-investment from edge compute used in innovative, new ways.
Althoff gave the example of Kroger grocery stores, which is connecting advertisers with customers, digitally, in a personalized way by using Kroger’s proprietary data. Kroger refers to this strategy as part of its cost of goods sold (COGS) improvements. The strategy gives “digital advertising national brands and their advertising agencies the opportunity to bridge media directly into commerce and precisely measure ad performance,” according to a report on Kroger’s website.
“The idea that somehow inside of a Kroger grocery store there's compute capability, because you're serving up ads at the shelf edge and you're engaging with your customers with on-the-spot promotions as they're walking through the store is a part of a COGS environment that does not exist today, except in that Kroger example, does not exist at scale,” said Althoff.
In addition to new retail business opportunities, Microsoft is also eyeing new opportunities with automated factories for its edge compute aspirations.
“The bulk of the way the world's industrial companies operate today is in a non-digitized capacity,” said Althoff. “As we continue to learn about the applicability of those hybrid intelligent edge scenarios, so goes the expansive nature of our TAM [total addressable market]."
Frenemies: Microsoft and service providers
At a recent FierceWireless 5G virtual event, panelists discussed the business opportunities for operators at their edge.
All operators are trying to understand the intersection between their networks and hyperscale networks and where edge computing fits.
“The only way this works is if operators keep and increase their enterprise customers,” said Patrick Lopez, the founder of the consulting firm Core Analysis.
But it’s unclear how revenues will be split between the operators and the hyperscalers. Operators are worried they may become just "the pipe” over which the hyperscalers provide services to enterprises and garner most of the revenues.