Edge Data Centers and the Impact of 5G

A new category of data center will become a major area in our industry – the edge data center – providing new opportunities for companies to develop and launch a new class of applications. There have been a few “edge” data centers for years in various areas such as content distribution (e.g. video streaming) and manufacturing, but significant growth is now expected due to new technologies such as 5G and the Internet of Things.

Edge data centers require three key capabilities:

• Storing data close to where it will be used, such as Netflix or Amazon Prime content is stored in content delivery networks close to large population centers. This reduces the strain on the network backbone and improves downloading and streaming for viewers.
• Putting processing power where it’s needed reduces latency or delay in responses. This makes things like remote control possible and enables technologies like augmented reality to run over mobile networks.
• Filtering the vast amounts of data generated by the (upcoming) proliferation of sensors and devices collectively known as the Internet of Things (IoT). Most of the data generated will need to be intelligently filtered or processed to help prevent clogging up major Internet backbone circuits.

There is a lot of hype around 5G, much of which is either unjustified or premature. There are significant technical hurdles to overcome, and the investment required in the infrastructure pales in comparison to previous mobile technologies such as 4G. However, when the infrastructure is built, there are some very exciting opportunities and real new applications that can take advantage of 5G.

Over the past two decades, a large portion of IT systems have migrated to centralized large data centers - which makes sense both financially and operationally. However, it is not suitable for everything, and new applications will drive the need to move data centers and other highly localized systems closer to users - at the edge:

The edge is where you place stuff so it's close to where it's needed

For a data center, the edge is just one location. The edge is in different places depending on who you are: a streaming service has a very different view of the organizations monitoring their traffic, a white goods manufacturing company has a different view than a car manufacturer, a mobile network operator has a different view than a utility company.

When 4G was first released, few people knew how many unicorns would emerge as a result. For example, Uber would not exist without 4G. The same is true for Deliveroo, Niantic (Pokemon Go), Stripe (payments), and a large number of Chinese companies that rely on smartphone apps. In fact, a large proportion of the world's unicorns rely on smartphone apps and 4G connections.

5G improves on 4G in three key ways: 1. Download speeds – 5G will be much faster than 4G, at least 1,000 times faster. The minimum expectation is a download speed of 10 Gbps, which can download an entire HD movie in 10 seconds. 2. Capacity – 5G operates at a much higher frequency than 4G, which means it can carry more traffic from more devices. This will help meet the expected exponential growth of IoT (Internet of Things) sensors, detectors, meters, cameras, connected cars and other devices. 3. Latency – This is the delay between a device sending data and receiving a reply. 5G will provide near-instantaneous responses that are 50 times faster or faster than 4G. This opens the opportunity for low-latency remote control and operation over 5G.

Applications written for edge data centers and 5G networks will come from new sources: such as automakers, logistics and transportation companies, healthcare providers, industrial manufacturers, and agricultural suppliers. Many companies in these industries are already working on pilot systems, but most will have to wait until national and global infrastructure is built. An entirely new edge ecosystem is needed that will run on new service models, and the providers will be a mix of existing service providers and a host of new companies.

The reason it’s worth paying attention to 5G and the edge is that it’s about to become even more important. Until recently, edge data centers had limited (albeit very important) uses, with video streaming being a good example but accounting for only a small fraction of global data center load. Most market forecasts now predict that edge data center demand will grow significantly to match the rapid growth of 5G and the Internet of Things. These new applications and services will require significantly increased availability of edge data centers.