- Edge computing is still new in the ASEAN region, with very limited initiatives by providers and enterprises.
- Providers and enterprises should start exploring the opportunity to gain a first-mover advantage.
The edge computing market is still new, but the ecosystem is developing fast with various initiatives and collaborations announced by key players in the last 12 months. This includes SK Telecom’s recent partnerships with VMware and Dell to offer edge computing in private 5G networking solutions (January 2021), AWS and Vodafone’s collaboration to roll out distributed multi-access edge computing (MEC) services in the UK (December 2020), Ericsson and Telstra’s initiative to develop enterprise use cases in verticals such as agriculture and smart cities in Australia, and many more. Edge computing has become a key focus for every provider across the technology stacks, including hardware vendors, cloud providers, telcos, and device manufacturers.
Edge Computing in ASEAN
In ASEAN, the edge computing market is still in the very early development stages. 5G is growing fast in the region, with telcos in Singapore, Thailand, and the Philippines rapidly expanding their networks and telcos in other countries expected to launch their services this year (for more, please see “5G Updates in ASEAN – Q4 2020: More Countries to Launch 5G This Year, Steady Growth Expected in the Next Five Years,” January 5, 2021). However, the focus is still mainly on the consumer mobile market and 5G FWA as a fiber alternative to drive fixed broadband penetration. In telco edge computing, Singtel is leading the region with its recent partnership with Microsoft to launch 5G MEC as well as its work with Ericsson to leverage MEC in its trial 5G SA network. Singtel and Globe (Philippines) are also part of the APAC-focused MEC Task Force launched in January last year. Other telcos also have various collaborations with technology vendors and enterprises to explore and develop enterprise 5G solutions, but the initiatives on edge computing are still rather limited. There is also a strong push by the cloud providers in the region. While there is a massive increase in public cloud migration, hyperscalers’ data centers (a.k.a. regions) are still limited in the ASEAN region. Most workloads are still hosted from outside the country (e.g., data centers in Singapore). Besides offering solutions for new applications that require low-latency, high-bandwidth, high-reliability networks, edge computing will also address enterprises’ local data residency requirements and minimize the carriage costs between hyperscalers’ data centers/regions and their country edges or domestic interconnection points.
On the demand side, as ASEAN enterprises are reshuffling their ICT spending to prioritize COVID-19 related investments (e.g., BCP and remote workplace), some businesses are pushing back their plan for next-gen technologies such as enterprise 5G applications and edge computing solutions. This will slow down the market adoption in the short to medium term. Nevertheless, the pandemic also drives the need for edge computing applications such as automation in the manufacturing and healthcare sectors as well as large-scale surveillance for temperature detection and physical distancing in public areas. A recent GlobalData study shows that only about a third of ASEAN enterprises are deploying or will implement the technology within the next 12 months. This shows a low market demand largely due to the lack of awareness and limited services offered by providers. However, as 5G adoption increases and the edge computing ecosystem develops, the market is expected to pick up strongly in the medium to long term with a five-year CAGR of 21.7% (source: ”GlobalData Market Opportunity Forecasts to 2024: Edge Computing,” April 22, 2020).
Telcos should consider collaborating with technology vendors and cloud providers (e.g., Dell, HPE, IBM, VMware, AWS, Google, and Microsoft) to develop MEC platforms. The collaborations should also be extended to enterprises to explore opportunities across different verticals. Some early use cases launched in the developed market include cloud-based gaming, AR/VR in healthcare, broadcasting, video processing, real-time analytics, automation in manufacturing, autonomous vehicles, and robotics. While not all use cases may be relevant to the ASEAN region, service providers should consider focusing on applications in key sectors such as robotics and automation to improve operational efficiency in manufacturing, real-time analytics to increase yields in agriculture, and large-scale surveillance in smart cities. Telcos could also leverage their existing capabilities such as cloud, IoT, security, and professional services to offer end-to-end edge computing solutions. As the technology is still new, having edge computing capability will offer service providers a first-mover advantage to capture early market opportunity and hence drive brand leadership. It will also expand the addressable market and accelerate their 5G monetization from the enterprise segment.
For end users, enterprises should include edge computing in their ICT roadmap and be more open to collaborating with service providers to explore and co-create new solutions. The region’s key sectors such as manufacturing, agriculture, and retail can benefit the technology by using automation and real-time analytics to improve operational efficiency (e.g., in a factory or at a farm) or leveraging AR/VR to enhance the customer experience. The technology will also be crucial in enterprises’ digital transformation journeys driven by the Industrial Revolution 4.0 as well as the growing need for high-bandwidth, low-latency applications.
“Telco Edge: The Next Big Battleground in Cloud Computing,” November 5, 2020
“Edge Computing Infrastructure: Competitive Landscape Assessment,” December 23, 2020