How IoT and Network Edge Expansion are Dispersing the Cloud

The cloud remains a mystery and a relatively new concept to many business leaders, despite the reality that 85 percent of enterprises had a multi-cloud strategy in 2017. However, the cloud is old news compared to the “edge.” The network edge is where the most exciting advances in business are taking place. There is much speculation about the edge completely blowing away the clouds – public, private, and hybrid.

A Look Back at the Cloud: The World’s Most Inaccurately Named Technology

What word would describe an immense set of massive concrete structures, filled with burning metal and connected with wires? How about a cloud?

In the ancient world of mainframes and dumb terminals, users had to request access to high-powered processing. Shared access was more reasonable and economical, but could be frustrating as queues of processing requests grew exponentially. The introduction of virtual machines (VMs) in the 1970s created multiple systems, each with its operating system, on a single server, laying the foundation for parallel processing, software as a service (SaaS), and the cloud.

The cloud got its name from engineering flowcharts representing unspecified routing and dynamically assigned processing as an unknown cloud. At its heart, the cloud is the internet, where packets of data find their route from endpoint to endpoint along unpredictable trajectories. That was the entire point of the technology in the first place so that communications could never be severed in wartime by downing telephone/telegraph lines during World War II.

IBM defines the cloud as: “Anytime, anywhere access to IT resources delivered dynamically as a service.” That includes SaaS, platform as a service (PaaS) for developers, and now Infrastructure as a Service (IaaS), which covers everything a business needs to operate, from provisioning to storage to networking to computing. “Everything” used to be enough. Not anymore.

Era of Edge Intelligence: The Internet Without Computers

What the cloud did for servers, desktops and laptops, the edge is going to do for all other machines, from light switches to drones to autonomous cars. Just as the cloud handed over the processing power of massive data farms to every computer in a business, the edge will hand over even greater processing power to all the rapidly evolving intelligent machines in the Internet of Things (IoT).

Peter Levine, the VC general partner at Andreessen Horowitz, suggested that 2005 to 2020 will be remembered as the Era of the Mobile-Cloud. The end is in sight for the dominance of the cloud. Around 2020, we will enter the Era of Edge Intelligence, where our entire environment will be alive with distributed processors.

Levine mused, “Think about a self-driving car. It’s effectively a data center on wheels, a drone is a data center with wings, a robot is a data center with arms and legs, and a [ship] is a floating data center… These devices are processing vast amounts of information, which needs to be processed in real-time.”

How Edge Computing Works

IoT Requires Cutting-Edge Investments

That is why the processing must be done at the network edge. There will not be a millisecond to waste relaying data back and forth when lives are on the line. IoT devices are only now gaining the elemental computing capacity they require to function effectively due to advances in miniaturization, 4G/5G connectivity, APIs, and containerization.

That is why edge computing products and services investments are expanding at a CAGR of 30 percent from now through 2022. Conventional data centers are struggling to meet computing demands now, let alone in the future of IoT swarms.

Gartner estimated that, by 2022, 50 percent of all data generated by businesses would originate on network edge devices. They found that there were already 8.4 billion connected “things” by the end of 2017.

Santhosh Rao, principal researcher for Gartner, detailed how increasing dependence on the edge will marginalize the existing business model of cloud access. “As the volume and velocity of data increases,» he said, «so too does the inefficiency of streaming all this information to a cloud or data center for processing.”

Edge + IoT = Civilization 2.0

Just as the 21st century has been defined by the seismic shift from push-to-pull technology – from TV broadcasters to user-generated on-demand video and from print publishers to social media – the same drive is dispersing processing from concentrated data centers down to distributed devices.

Big players like Microsoft Azure and Amazon Web Services dominate the access rights to cloud data centers. Still, the processing dynamo at the edge generates hopes for new market models and industry leaders to rise on the tide of local processing on IoT machines.

Richard Waters, San Francisco-based editor for the Financial Times, wrote, “It is not clear yet whether the re-emergence of edge computing will be a powerful enough force to justify those hopes. But it does suggest that the rise of the giant computing clouds will not be the end of tech history.”

What’s certain is that even as we reach the edge of the world, a new one is being born on the far side of that edge, and innovative startups are best positioned to take advantage of that new reality.