April 18, 2024


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5G and cloud: How telecom can architect the next cloud era

By : Erik Ekudden, Ericsson Group CTO and Head of Technology & Strategy

5G and the massive increase of compute power in the network will transform the telecom industry like never before. Service providers, offering the most value add in emerging edge ecosystems, stand to gain most from lucrative new pathways into 5G cloud revenue streams. However, securing tomorrow’s market means making inroads already today. Below, I explain how service providers can gain an edge in the race to the industrial cloud and become key architects of the next cloud era.

Moving the compute power from a device to the network edge with split rendering gives an indication of what is to come for next generation immersive user interfaces. This breakthrough, which will ultimately enable 5G mobile mixed reality use cases, is one of the many use cases we are developing today at our D-15 innovation lab in Santa Clara, California, with partners Qualcomm and Nvidia. However, this is the first step. To make such demanding edge use cases happen at scale worldwide, we need to work to increase the interaction between the network and cloud infrastructure stacks.

Evolving to the high performance network edge

We call this the network compute fabric, and service providers will play a critical role in enabling and orchestrating this new computing paradigm, one which will have a substantial impact on digitalization of the world, like Industry 4.0.

In this computing paradigm, connectivity, compute and execution will form a single unified, integrated execution environment for distributed applications – providing integrated adaptive compute, connectivity, security and storage for any place, time, device and application.

Producing great performance with extended bandwidth, high throughput, increased security and millisecond latency, this integrated fabric will cater for new use cases at the edge such as closed-loop industrial control systems, industrial robotics, eXtended Reality (XR) with real-time synchronous haptic feedback and negotiated automatic cooperative driving.  

ericsson edge solution

Edge means everything in emerging 5G revenue streams

Our D-15 innovation testbed, in addition to our many R&D locations worldwide, serves as the epicenter for much of this collaboration and co-creation. At many of these hubs, we’re developing live edge computing use cases such as 5G gaming, edge and network slice combined orchestration and 5G enterprise augmented reality such as the 5G Gemba Walk developed with Magic Leap glasses, which leverages mobile and spatial technologies to continuously optimize production workflows and open new possibilities for augmented reality use cases.

Today’s service providers are undoubtedly best positioned to take the lion’s share of such revenue opportunities in emerging edge ecosystems. The evolution to cloud native network functions and distributed cloud computing enables service providers to move beyond traditional connectivity-service models and opens new doors to adjacent industries and expanding enterprise opportunities who are curious to explore the new edge computing use cases. Here, they have a distinct advantage to deliver intelligent traffic routing from the mobile network to the optimal location of the industrial application, in addition to having people on the ground and expert knowledge of network topology, network efficiency, device management and more.

For telecom players, this market will evolve rapidly and have significant consequences on the wider tech industry. Already by 2023, 25 percent of 5G use cases are forecast to be reliant on edge computing. By 2030, we expect a significant part of 5G revenue to be found in enterprise and IoT services. At the same time, according to our latest 5G consumer potential report, the cumulative revenue opportunities for digital consumer services alone will reach USD 131 billion over the next ten years.

This truly is a game changer for the telecom industry. As enterprises are digitalizing with 5G, service providers have the opportunity to decide which role they want to adopt in this emerging market. They can also make in-roads, while market roles are still being defined to establish a strong foothold in the network-cloud ecosystem.

For service providers, this will take place in three phases: creating a value proposition in the edge ecosystem, developing the network as a platform for enterprise, and preparing for the evolution toward the high performance network edge. 

The reality today: The edge computing ecosystem

5G is the perfect companion to cloud computing both in terms of its distribution and the diversity of compute and storage capabilities. New on-premises and edge data centers will continue to close the gap between resource-constrained low-latency devices and distant cloud data centers, leading to driving the need for heterogeneous and distributed computing architectures.

Today service providers can capture the first wave of edge computing use cases by focusing on dedicated deployments on-premises where connectivity performance requirements are stringent, and by exploring on-network application deployments at the point of presence of today’s Packet Core sites. Here, integrating service orchestration with 5G Core, irrespective of who owns the infrastructure, will be the key to success. This will allow service providers to dynamically expose and monetize the network based on information variables such as performance, efficiency gains, pricing and more – firmly establishing a value proposition in the edge cloud ecosystem. Cloud providers are important partners to extend the global ecosystem of developers and address the enterprise opportunity. Service providers can leverage their infrastructure capabilities, and gain an easy start to address the edge opportunity.

Many service providers are already making good headway in this area. Earlier this year, we announced collaboration agreements with TelstraTelefónica Deutschland and other service providers to develop advanced solutions in this space.

The next phase: The network as a platform for enterprise services

The availability of large-scale computation at the edge of the network will transform how enterprises deploy and consume IT. In the coming years, as compute and storage integrates deeper within the network stacks with the evolution of 5G, service providers arguably stand to gain the most. In this evolving computing paradigm, service providers should look to provide full end-to-end orchestration, with defined service layer agreements, in a self-service and automated way.

Orchestration and network exposure will continue to play a key role moving forward, enabling industrial applications to interact with the network resources in advanced ways such as selecting location, quality of service, or influencing the traffic routing to deliver on application demands.

Supported by the principles of cloud-native, the ecosystem should work together to avoid fragmentation and establish a global set of network application programming interfaces (APIs) which enable full automation of industry use case requirements. Today, we’re actively engaging global industry players and consortia such as 5G ACIA5GAA and AECC to help shape this development and make it easy for developers to automate lifecycle management across service providers.

Ericsson enabling the rich network edge 

At Ericsson, we’re strongly investing in the wireless edge and wireless WAN space to enable service providers to grow into emerging enterprise markets. Earlier last year, we announced the acquisition of Cradlepoint which provides a strong foundation for this.

We’re also active in various ways from a standardization, technology and use case alignment perspective where we engage with device vendors, cloud providers, operations technology vendors and application developers with specific domain knowledge, for example to define common network APIs.

Learn more 

Follow Ericsson Research’s journey to the network compute fabric.

For more insights, visit our edge computing page.

Read our white paper: Edge computing and deployment strategies for communication service providers.

Watch all of the 5G Things videos from our recent D-15 event on-demand today.

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