HPE plays matchmaker at the edge between telcos and their clients

The IT giant has waded into the increasingly competitive market for edge networking services, but will customers bite?

Iain Morris, International Editor

June 16, 2020

6 Min Read
HPE plays matchmaker at the edge between telcos and their clients

HPE seems to have volunteered itself as a matchmaker between telcos and business customers craving an affair at the edge of the network, or even on the business premises.

The US IT giant today stepped forward with a new offer designed to bring the different parties together. If it takes off, it could potentially slow down the march of hyperscale firms into edge territory.

The basic idea is to help operators cater to business demand for "edge" services. The definition of the edge has never been razor-sharp, but here it would mean either a telco's own central offices – of which there are usually thousands per country – or a variety of business facilities. A gas station is the example provided by HPE.

Hosting applications in these facilities, rather than the giant data centers where they are normally found, could appeal for a few reasons. For one thing, it would cut "latency," a service lag that occurs when signals face a long-distance journey. When it comes to more advanced applications, this lag could spoil the experience.

This sort of local breakout could also ensure that data stays off the public Internet, which might be a more efficient or secure way to run the application.

"Ten years from now when local traffic lights are communicating with cars, that is information that doesn't have to go back to the core of the Internet," said Phil Mottram, HPE's vice president and general manager of communications and media solutions, during a press briefing this week. "It is relevant for 30 seconds and then the information is no longer needed."

HPE thinks it can play matchmaker because it already has a bundle of products and services it can package together – with a "nice wrapping," in the words of Rolf Eberhardt, HPE's head of service orchestration – and provide to operators courting business customers.

Those products include edge computing hardware, in the shape of its Edgeline servers, and edge communications in the form of Aruba, the Wi-Fi and networking firm HPE acquired in 2015. HPE also touts a lot of applications expertise, some of which is courtesy of partners.

On top of all that – and this is today's big reveal – is the HPE Edge Orchestrator. As Eberhardt describes it, this will take all the different edge components, bundle them up and make them available to business customers in a convenient way.

Businesses, says HPE, will be able to control applications across hundreds of locations "with a single click." The entire proposition falls under Greenlake, the newish part of HPE that sells everything on a consumption-based "as-a-service" model, and has continued to grow fast during the pandemic.

Is it unique? Gabriel Brown, a principal analyst at Heavy Reading, draws a parallel with VMware, the cloud computing subsidiary of Dell, which, like HPE, is a big player in the server market.

It is a comparison HPE executives say they were anticipating, but Mottram thinks the breadth of HPE's capabilities is what sets it apart. "You obviously need good software capability as well as computer expertise, and we can also add Aruba," he tells Light Reading. "As a company we do believe we have quite unique assets for an edge-to-cloud strategy."

An HPE-facilitated edge affair between telcos and business customers could also cut hyperscale firms entirely out of the picture. That may appeal to operators worried that Amazon, Google and Microsoft are mopping up business and leaving them with only a connectivity role in these edge deals.

"The basic pitch could be that this is for telcos to stay in the game, deploying applications at the edge, rather than just partnering with Amazon and Google and Microsoft," says Brown.

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

Even so, a big question is whether there is enough interest in running applications at the edge for all this to be viable.

During HPE's briefing on the launch, Justin van der Lande, an analyst with Analysys Mason, said he was "not overly convinced" about the existence of a "killer application" requiring ultra-low latency. The traffic light example given by HPE would "probably not" require sub-second processing, he said. Initial interest, Mottram conceded, is likely to come from organizations that want to keep applications in the local area.

Some analysts also doubt telcos are the perfect match for business customers on the lookout for edge partners. HPE cites market research by IDC that says 40% of businesses trust operators to be the main provider of edge solutions.

But IDC also says telcos came below several other types of company when businesses were asked who was best suited to providing edge solutions for their organization. IT infrastructure vendors, systems integrators, data center companies and cloud hyperscalers were all preferred to operators.

For HPE, convincing operators it is an alternative to a partnership with a hyperscaler may be tough. Spain's Telefónica announced an alliance with Google last week that is just the latest in a string of tie-ups between telcos and cloud giants.

At the same time, telcos' realization they cannot go it alone could work out well for HPE. "Operators are not expecting to completely dominate the edge in the sense they were talking about two or three years ago," says Brown. "They are being more open to partnerships."

Of course, that means there will be no shortage of competition, as HPE executives clearly recognize. "Equipment suppliers are coming in and then you have the systems integrators, the hyperscalers and the specialized startups with niche offerings," says Eberhardt. "I believe the race is still open."

Mottram is optimistic Amazon, Google and Microsoft will not be able to have it all their own way. "Some carriers do have a lot of power and in some markets these hyperscalers don't actually have that much pull," he says. "There are some countries where they will fight and hold their position because they have a sustainable unique value."

HPE has done the technological groundwork to join that fight. Now it has to persuade operators it has something they and their business clients really need.

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— Iain Morris, International Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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