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© STL Partners | Proprietary and Confidential 1
Role of edge in enabling digital transformation within the industrial sectors
Yesmean Luk
Senior Consultant, STL Partners
IoTHINGS Week 2020, Edge Forum
26 May 2020
© STL Partners | Proprietary and Confidential 2
Previously, enterprises either hosted applications in a data centre or software was integrated into the appliance
© STL Partners | Proprietary and Confidential 3
Edge computing allows enterprises to deploy applications closer to the end-user/source of data
✓ Low latency
✓ Reduce bandwidth costs
✓ Data localisation
✓ Increase flexibility & scalability
✓ Reduce vendor lock-in
✓ Reduce cost (and size) of infrastructure
✓ Improve application mobility
✓ Data security
© STL Partners | Proprietary and Confidential 4
Another way of looking at the benefits of edge is combining the capabilities of both local and cloud computing
Local compute capabilities
Cloud compute capabilities
© STL Partners | Proprietary and Confidential 5
Where is the edge? Depends on who you are or who your customer is
Enterprise Access Point Access NetworkEnd-device Transport Core Network Internet
Edge computing
Network edge/multi-access edge computing
On-premises edge
Device edge
Location of compute workloads/processing
Edge computing brings processing capabilities closer to the end user/device or the source of data
© STL Partners | Proprietary and Confidential 6
Different industries more/less suited for different types of edge
Network edge On-premises edge
Manufacturing
Agriculture
Construction
Defence
Emergency Services
Extractive Industries
Financial Services
Government
Healthcare
Logistics
Media & Entertainment
Retail
Professional Services
Tourism & Events
Transport
Utilities
Defence authorities often deal with sensitive and
confidential data and thus require private networks for data security purposes.
Private networks are very expensive and complicated to set up, which limits the
usage to large corporations and government entities
MEC to ensure minimum communication delays between
traffic controllers and ambulances, and private networks for fast, secure and reliable connection (e.g. – ESN)
Autonomous vehicles for instance require MEC for the extremely low latency to trigger real-time actions
to prevent accidents
Potential use of both MEC (for remote monitoring) and private network (for patient
data privacy purposes)
MEC for real-time 3D design collaboration, and private network for sensitive data
protection (new innovative design) and faster network deployment for
construction sites
Lack of network coverage for oil & gas industry as they often use satellite -
need for private networks to reduce downtime
MEC allows improvements in multiplayer gaming
experience and AR/VR by dramatically decreasing lag
© STL Partners | Proprietary and Confidential 7
Edge computing is a key part of enterprises’ digital transformation
Improving efficiencies New business models
Reducing waste and defects
Increasing asset lifetime
Minimising time / maintenance &
repair costs
Run operations more efficiently
(automation)Servitisation
Data-driven product
development
Our digitalisation and innovation initiatives focus on becoming more efficient, reducing downtime and reducing bottlenecks.
Major automotive group
The focus is always going to be on greater control and automation – the stuff owned by the OT guys – they’ve been doing this for forever and a day.
Edge platform provider to manufacturing & extractives
At the end of the day, it is all about how we can improve services we provide to customers, on top of the products they already have out there.
Leading aero/auto engineering group
We can now move towards a leasing model where batteries are leased for an amount of time so the customer won’t have to worry about having to replace the battery – it’s already in their contract.
Leading battery manufacturing group
In mining, customers buy every dime that you make. As soon as something stops working or stops the supply chain, you start bleeding cash.
Leading oil, gas and mining group
The focus is always going to be on control and automation – the stuff owned by the OT guys –they’ve been doing this for forever and a day.
Edge platform provider to manufacturing & extractives
We have our own role in helping our customers to reduce the cost per barrel through the services we provide, so digital transformation is a part of that
Leading oilfield services provider
© STL Partners | Proprietary and Confidential 8
The key drivers for edge computing depend on industry-specific factors: e.g. mission criticality, regulations etc.
Factor ManufacturingOil, gas &
miningConnected Car Smart cities Healthcare Retail Logistics
Low latency & reliability ✓ ✓ ✓ ✓ ✓ ✓ ✓✓
Reduced backhaul ✓✓ ✓✓ ✓✓ ✓✓
Data localisation ✓ ✓✓ ✓ ✓✓ ✓ ✓
Scalability ✓ ✓
Light device ✓✓
Mobility ✓
Resilience ✓✓ ✓
© STL Partners | Proprietary and Confidential 9
Most new use cases are still at an innovation/early adopter stage of using edge computing/cloud
Innovators Early Adopters Early Majority Late Majority Laggards
Autonomousdriving (V2X)
AR/VR
Traffic management
Customer engagement
Electric vehicle energy mgmt.
AR/VR
UAV inspection
Remote monitoring
Equipment monitoringPredictive
maintenance
Location tracking
Video analytics
Remote operations
IT/OT
Security
Warehouse mgmt. systems
OTAupdates
Asset tracking
Cloud gaming
Remote patient care
Web optimisation
Use cases such as asset tracking in vehicles and on-prem IT systems have existed for over a decade
However, we are still at an early stage of seeing new use cases and enterprises implementing distributed/edge cloud
Still some uncertainty of the future use cases – making the right infrastructure decisions is key
© STL Partners | Proprietary and Confidential 10
How is edge compute being deployed? Both brownfield and greenfield deployments
Network edgeOn-premises edgeDevice edge
Condition monitoring
Remote operations
IT/OT
Security
Equipment monitoring
Warehouse mgmt. systems
Traffic management
Customer engagement
Autonomousdriving (V2X)
Electric vehicle energy mgmt.
OTAupdates
Asset tracking
AR/VR
AR/VRPredictive
maintenance
Location tracking
Video analyticsUAV
Insurance “black box”
Server/gateway
Roadside units
MEC data centre (base station)
Brownfield
Greenfield
Key
Programmable logic controller (PLC)
Server (“edge in a box”)
Rack
On-premise data centre
Programmable logic controller (PLC)
Rack
On-premise data centre
Programmable logic controller (PLC)
Server/gateway
Rack
On-premise data centre
© STL Partners | Proprietary and Confidential 11
In order to accelerate edge computing adoption, these barriers need to be overcome
IT vs. OT decision-making responsibility
Education and industry cultureData compliance
and regulation
Making the business case: cloud vs. edge
It’s not always clear who in the organisation makes infrastructure decisions, and who the
edge solution should be sold to. Some players (e.g. hyperscalers) tend to approach edge
from an IT perspective, assuming that IT=OT.
Even in digitalised industries, ‘dinosaurs’ exist. Education is needed industry-wide, both
to change the mindset of technical people who are resistant to change, and to combat the skills gap between different generations.
Data regulation is changing all the time; companies can be hesitant to process data at the edge and only send aggregates or insights
to the cloud and risk losing valuable information required for compliance.
Edge may bring new costs e.g. on-site and/or distributed infrastructure management –
which can be hard for cash- strapped industries to justify unless there is a clear business case for using edge vs. cloud.
Fragmented partner ecosystem
There is no single leading partner within the edge partner ecosystem. The ecosystem
ranges from the more traditional hardware providers (e.g. those who sell PLCs), industry-specific start-up companies, general Sis, etc.
Edge hardware for OT/industrial/enterprise needs
Much of edge is about bringing IT into OT, however this is not a simple copy and paste. Hardware needs to evolve to meet industrial needs (e.g. ruggedised equipment; limited
capacity in branches/retail stores, etc.)
© STL Partners | Proprietary and Confidential 12
There are different roles that players can play within the wider edge ecosystem and value chain
Cloud Infrastructure
Network
Facility
Application/Software
Hardware
Integration & Systems Design & Engineering Systems Integration Professional Services
Real Estate Data Centre Power & Cooling Site Maintenance
Processor ServerEnd-device Hardware Maintenance
Cloud ConnectContent & Application
DeliveryEdge Gateway
PaaS Analytics & APIs Software Application
Operating System IaaSCloud Aggregation &
OrchestrationVirtualisation & Containers
Open Source & Forums Open Source Forums & Communities
© STL Partners | Proprietary and Confidential 13
So, what’s next? How should companies kickstart their edge computing journey?
Build a business case• Define your business drivers / KPIs for using edge (cost, performance, agility)
• Assess which applications need to use edge and which will need cloud across IT & OT
• Evaluate the investment required to implement edge computing
1
Define your guiding principles to future proof infrastructure• You won’t know what your edge applications will be from Day 1
• Avoid mistakes of the past – less proprietary, more open infrastructure
• Flexibility is an inherent benefit of cloud – bring it to the edge
2
Select the right partners• Different technologies are coming together partners will need to support – 5G, IoT, AI
• The right partners are those who are engrained in the ecosystem and can bring others too – across applications, software, hardware and services
3
© STL Partners | Proprietary and Confidential 14
Thank youPlease feel free to reach out if you have any
questions:
yesmean.luk@stlpartners.com Research Consulting Events
Find more of our edge insights at
www.stlpartners.com/edge-computing
@STLPartners
linkedin.com/company/stl-partners
© STL Partners | Proprietary and Confidential 15
STL Partners advises companies on their strategies and puts them to action by engaging customers effectively
StrategyMarketing &
CommunicationsSales & Engagement
Proposition & Messaging
Proposition Development
Strategy & Planning
Proposition Testing
Market Sizing & Business Case Analysis
Content Marketing
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Media & Promotion
Customer Workshops
Sales Tools
Co-creation with Partners
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Go-to-market & Partnerships
© STL Partners | Proprietary and Confidential 16
STL has built a centre of excellence around edge computing and been advising businesses on this for over 3 years
Unrivalled expertise and experience……and an industry-leading edge knowledge centre
Supported 3 major telecoms operators to develop a commercial strategy for edge computing
Interviews with over 50 enterprises and solution providers across different industries
Team of experts: leading industry analysts and consultants, IoT practitioners & cloud specialists
Advised global telco on hyperscaler partnership negotiation worth €0.5M
Database of 150+ use cases for MEC, private networks edge and
on-premises edge
Interactive model for forecasting use case revenues
Ecosystem tool mapping 80+ vendors across the edge value
chain
MEC site ROI model & hyperscaler negotiation tool
“STL brings edge expertise. They understand that
landscape across telco and other ecosystems.”
“We worked closely with STL in true
partnership to deliver high quality, actionable insights that were not available elsewhere.”
“The consulting team produced high-quality output that could be repurposed in a wide
variety of ways.”
Year
2019
2020
2021
2022
2023
Data Type
Annual revenue
Value chain segment
Application
Connectivity
Edge Cloud
Hardware
Integration & Support
Country
Germany
Italy
Spain
UK
0
100
200
300
400
500
600
700
2019 2020 2021 2022 2023 2024 2025 2026
EU
R m
illio
ns
Integration & Support
Application
Edge Cloud
Connectivity
Hardware
Industry
Energy & Utilities
Manufacturing
Natural Resources and Agriculture
Other
Retail, Media and Events
Use case
Real-time UAV a...
Immersive experi...
Drone detection
AR in tourism
Head of Cloud Edge -European MNO
Product Manager - global software company
Head of Commercial & Partnering - Global MNO
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