Most IoT System Integration Need Centers on Solution Design

Of the companies that hire system integrators, 78 percent do so because they lack the experience to integrate the systems themselves, IOT Analytics says. 

Compared to other technology areas, the deployment of IoT technology is particularly complex, the firm says. “IoT projects require skills in several areas that have historically been separated, including secure embedded design and engineering, connectivity management, cloud and IT architecture, data science and application development.”

source: IOT Analytics

Data Center Interconnection Hardware Costs Growing Fast

Data center interconnection requirements are large and getting larger. As Cisco notes, most movement of internet traffic is within the data center. Some 72 percent of all traffic is “east-west,” defined as data moving solely within a single data center.

Only about 30 percent of total traffic moves in or out of a single data center (north-south traffic). About 14 percent of traffic moves between data centers. Only about 15 percent of traffic moves between data centers and end users. 

All of that interconnection carries costs for data centers, and interconnection costs are growing. 

“At 10G, pluggable) optics represented about 10 percent of the total hardware cost of a data center network,” says Bill Gartner, Cisco SVP and general manager. “As we progress to 400G, optics represent well over 50 percent of the total hardware cost.”

source: Cisco 

IoT and Edge Computing Drive Less Public Network Spending Than You Think

Edge computing and internet of things growth will not have the same implications for public network services and revenue that human-oriented devices have had. 

There are perhaps 6.2 billion connected human devices devices used by people in 2021, with possibly 4.3 billion to 4.4 billion using a direct mobile connection. Roughly two billion use indirect connections (Wi-Fi or Ethernet) that do not have a direct account associated with them. 

There also are perhaps 34 billion connected internet of things devices in use in 2021, likely mostly using an indirect connection (Wi-Fi, another short-range communications protocol or Ethernet). Perhaps two billion of those devices are connected by mobile networks, according to Ericsson.  

source: Statista

That points to a significant difference between human-used devices and IoT devices: most human-used devices will rely on a mobile account; most IoT devices likely will not. 

source: Gartner

Since the typical sensor connection generates far less revenue than a smartphone account, for example, that also implies that IoT connection revenue will provide less connection revenue uplift than might be expected. An IoT sensor might represent connectivity revenue two orders of magnitude less than a smartphone connection does, for example. 

Volume will matter, but it is the average revenue per device and the prevalence of non-mobile connectivity and non-public-network connectivity that really matter more. Sensors and devices often will use a local untethered connection such as Wi-Fi or Bluetooth and not create immediate demand for a dedicated mobile or other public network connection. 

SaaS Still Biggest Public Cloud Revenue Driver but PaaS Grows Fastest

End-user spending on public cloud services is forecast to grow 23.1 percent in 2021 to $332  billion, up from $270 billion in 2020, says Gartner.

Software as a service (SaaS) will remain the largest market segment at $122.6 billion in 2021. Infrastructure-as-a-service (IaaS) will grow about 39 percent; desktop-as-a-service (DaaS) will grow at 68 percent. 

Worldwide Public Cloud Services End-User Spending Forecast ($ Millions)
Service	2020	2021	2022
Cloud Business Process Services (BPaaS)	46,131	50,165	53,121
Cloud Application Infrastructure Services (PaaS)	46,335	59,451	71,525
Cloud Application Services (SaaS)	102,798	122,633	145,377
Cloud Management and Security Services	14,323	16,029	18,006
Cloud System Infrastructure Services (IaaS)	59,225	82,023	106,800
Desktop as a Service (DaaS)	1,220	2,046	2,667
Total Market	270,033	332,349	397,496

BPaaS = business process as a service; IaaS = infrastructure as a service; PaaS = platform as a service; SaaS = software as a service; DaaS = desktop as a service

source: Gartner 

How Close to the Premises Does Edge Computing Need to Be?

Will widespread edge computing lead to widespread edge interconnection of the sort that presently happens in big data centers? Yes, but “where” interconnection happens will depend on what sort of “edge” we are talking about. Some larger facilities that are metro level will certainly support interconnection. 

Lumen Technologies, for example, believes it can cover about 98 percent of edge computing demand with five millisecond or less latency, from a relative handful of regional locations. Others networks of small edge data centers, spaced at about 20 kilometer distances, also will work.  

IDC has estimated that 75 percent of enterprise latency needs are satisfied with latency of less than five milliseconds. About 15 percent of use cases can tolerate latency of five to 10 milliseconds. 

source: IDC 

Ambient Computing is Virtually Synonymous with IoT and Edge Computing

We know a technology has become pervasive when we no longer notice; people simply “use it.” Edge computing, the internet of things and use of artificially intelligent processes not requiring direct human interaction all are viewed as part of a trend towards ambient computing of this sort. 

Smart speakers and personal voice assistants are good consumer examples of people “using computers and computing” without “knowing it.” 

But much of the growth of invisible computing will come in the form of applied sensor use (internet of things). 

source: Deloitte 

The business value might be related to applied mobility, but is not “just” mobility or untethered connectivity. It is the ability to add sensing--and the ability to act on conditions--to ordinary devices that creates a way to “do things differently” or “do different things” that drives the additional value.

The business value of ambient computing is simply the ability to “act or behave differently,” based on real-time measurement of temperature, location, sound, motion, light, vibration, pressure, torque or electrical current, for example. 

And that “real time” use of actuators such as valves, switches, power, embedded controls, alarms or device settings is why edge computing is inextricably linked with IoT or ambient computing.

Verizon, Dreamscape Partner for Edge-Supported VR

Verizon and Dreamscape Immersive announced a partnership to develop virtual reality (VR) applications using 5G and mobile edge computing (multi-access edge computing). 

The partnership’s first priorities will focus on 5G immersive-learning and training innovations for use in enterprise, public sector, and education environments. 

Verizon also has taken an equity stake in Dreamscape through Verizon Ventures. Verizon and Dreamscape will collaborate to develop and market avatar-driven synthetic training and simulation experiences for government and specialized professional learning uses.

Verizon and Dreamscape Learn, a partnership between Dreamscape and Arizona State University, will work together to innovate immersive VR learning experiences for various education levels and environments.

How Much "Edge Revenue" Will Telcos Get?

By 2022, IDC predicts that 60 percent of all Asia/Pacific network resources will be deployed at remote edge or service provider locations, up from 20 percent in 2020.

The issue for many connectivity service providers is how much of that edge activity will occur at the “telco edge,” implying some amount of revenue generation from edge computing. 

source: IDC 

As IDC outlines the various “network edges,” telcos might not have direct roles for industrial edge or enterprise edge applications, which might be driven by enterprise-owned private networks. 

there are temporary “tactical edges” deployed to support disaster recovery, as well as “device” edges that might have direct or indirect revenue for connectivity providers. 

IDC also predicts that, globally, by 2023, over 50 percent of new enterprise IT infrastructure deployed will be at the edge rather than corporate data centers, up from less than 10 percent today.

80/20 Rule for Edge Computing?

In many use cases, edge can handle 80 percent of the computation. Perhaps 20 percent of the time, remote computing will be necessary. 

Edge is Complementary to Cloud