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Edge Computing: The Next Frontier for Telcos

Edge computing presents opportunities for telcos to re-evaluate their business models to diversify their sources of revenue beyond the traditional. Driven by the Internet of Things, video-on-demand and big data, edge computing moves data centers closer to the end user at the edge of the network, optimizing content delivery and data processing.

By converting empty floor space into an edge computing data center, telcos can not only expand their business, but provide better service by reducing latency and lowering transmission costs.

Why telcos?
In today's diversified data center landscape, the lines are blurring between telcos, network carriers, traditional colocation providers and cloud data center service providers. Telcos are uniquely positioned to benefit from the edge computing trend due to their location at the literal edge of the network where they are closest to the user base. Additionally, because of the inherent nature of their business, telcos likely already have the critical infrastructure (including high-bandwidth fiber) necessary to support this new data center model. Lastly, the recent update from copper to fiber has readied telco networks for speed and scale while the transformation of the physical switch to the software switch has shrunk the footprint needed for equipment, opening up space within central offices that can be used for new revenue generating purposes.

Where to start?
In order to begin the transformation journey, telcos will need to address five critical criteria:

Space: a commodity that has become available with the move from analog to digital.

Power & cooling: it's likely some forms of these systems already exist within the central office space. However, telcos should determine if the current systems will be sufficient or if additional infrastructure will be necessary. At the very least, they will need an uninterruptible power supply (UPS), downstream power distribution unit (PDU) and critical air conditioning within the data center space. Furthermore, in order to ensure adequate power, it may also be necessary to increase utility service, add generator capacity or install a complete AC system.

IT racks: racks will be needed to support the IT equipment that is installed.

Security: cameras and access control systems will be necessary to regulate which employees are able to enter the data center and when.

During the planning phase, personnel involved in the build may also want to consider utilizing reference designs (think of them as building blueprints) that outline different solutions and costs based on the existing environment, budget constraints and end goals.

Additionally, should existing space be too limited for a full mechanical, electrical and power buildout, telcos can utilize prefabricated power, cooling and, if necessary, IT, components. These modular building blocks enable a "build-as-you-go" approach that allows operators to easily and quickly add or remove power and cooling capacity, as well as IT space, as necessary throughout the lifecycle of their data center.

The decision to transform an existing telco business into one that also provides data center components isn't to be taken lightly, but it is a decision that will pay off. Consider this example:

Costs: a central office with enough space to construct a 24-rack environment that supports 5kW per rack, for a total load of 120kW. Assuming the need to build out infrastructure including generators, UPSs, AC, racks and security, a telco provider could expect construction costs to reach between $1-1.5 million.

Return on investment: a telco provider adopting a colocation data center model, in which the telco builds and provides the data center environment and rack space while individual customers are responsible for the purchase, installation and management of the IT equipment they put in, could look to rent each 5kW rack for between $1,500-2,000. In a 24-rack deployment, the telco cold realize a revenue of $400-600k per year, with the entire system paying for itself in less than 36 months.

As telcos look to balance tightening finances with increasing demands on bandwidth and processing speed, new approaches will be necessary to open revenue streams and strengthen the digital strategy for businesses. Edge computing, which streamlines data transmission, decreases latency, and enhances the traditional telco revenue model will be a very compelling option.

— Mark Hurley, Data Center Solution Architect, Schneider Electric

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Joe Stanganelli 5/12/2016 | 8:31:06 AM
Re: true but the devil is always in details Well, for a lot of companies who face similiar circumstances, the answer is: "Hire younger, fire older."  (Because older people don't put up with as much garbage, have more self-respect, and are paid more.)

Unlawful?  You bet it is!  But, speaking as an attorney with employment law experience, I can assure you that that doesn't stop some companies from doing it.
brooks7 5/11/2016 | 12:42:40 PM
Re: true but the devil is always in details And those employees would fall into the Union....

See that is the thing here.  We often look past the very human challenges like how do I get an organization of 100,000 people do be nimble.


Joe Stanganelli 5/11/2016 | 9:07:59 AM
Re: true but the devil is always in details @7: Of course, it would only be the employees with the DC access that would need to have the checks.

But unions -- particularly telco unions, and ESPECIALLY Verizon's union -- are known for being very vocal and protective.
brooks7 5/11/2016 | 2:21:26 AM
Re: true but the devil is always in details jtombes,

I see a huge problem with say Verizon going to the Union asking them to run background checks on all the Union workers...who would have access.  So, yes I think there is a huge challenge getting enough employees to be approved.  Data Centers generally are not unionized.  Telcos generally are.


komatineni 5/10/2016 | 7:01:31 PM
Re: true but the devil is always in details @jbtombes, guess you are referring to the other reply. Ideally, it should reduce the number of specialists/technical persons in field. There is certainly some complexities in DC as well new security requirements but i would skip to comment. Doubt I have a good understanding about background security stuff. 
komatineni 5/10/2016 | 6:58:56 PM
Re: true but the devil is always in details Joe, guess virtualization is not going to solve all challenges. e.g. Last mile, the site works itself, or the long pending control plane seperation/distributed architecture + orchestration. Wihle there are tremendous improvements in last two years its still miles away IMHO. 
jbtombes 5/10/2016 | 5:08:56 PM
Re: true but the devil is always in details So edge computing would increase the number of personnel, and/or you'd see a problem with the average data center employee passing background/security tests? 
Joe Stanganelli 5/10/2016 | 8:55:39 AM
Re: true but the devil is always in details Yes, but that's where the virtualization comes in to play -- letting the software do the heavy lifting and scaling up or down elastically as needed.

Or am I missing something here?
brooks7 5/9/2016 | 2:11:09 PM
Re: true but the devil is always in details  

I agree and I think that the biggest hangup might be an odd one.  Many data center customers have security requirements that would include background checks of all the carrier employees that would have access to the space.  Without this, you are really stuck on the ability to support customers with things like PCI or HIPPA compliance.

komatineni 5/9/2016 | 9:15:36 AM
true but the devil is always in details Indeed and tend to agree on the points but there is a reason why EDGE computing is not ubiquitous these days. For decades (or centuries) telcos charging systems are centralized, so does the other 'services' or functions supporting the traffic, charging, billing and other operational support systems. Any new technology that can enable the control plane - data plane separation where the signaling is still forwarded to the central location while the data is terminated close to the source would help a lot. Secondly, the deployment and managing the thousands or millions of such devices in the field is going to be very painful. Finally, the actual use cases are still not very realistic. 
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