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BRIAN KRACIK: Welcome, everyone to our Google Cloud Innovator
Tech Talks for Telecommunications.
I'm Brian Kracik, Head of Telecommunications Industry
Marketing here at Google Cloud.
And we'll be talking about all things edge today.
Edge is an exciting topic, and it's really
focused on what we're hearing from our enterprise
customers and our CSP partners.
So to explore this topic I have with me Camille Mendler
from Omdia.
CAMILLE MENDLER: Hi.
BRIAN KRACIK: Camille, welcome.
CAMILLE MENDLER: Thanks very much.
It's about time you invited me.
BRIAN KRACIK: Well, we go back a long ways, don't we?
CAMILLE MENDLER: Indeed we do.
And we've seen trends come and go.
And this one is perhaps one of the fastest moving trends
that I've seen in my career.
Would you agree?
BRIAN KRACIK: I would agree.
I think just the momentum of Cloud
and how that plays into not only the core networks
but at the edge has been tremendous.
But we want to talk a little bit more about that.
So let me dig right in.
And what I'm excited about is what
is happening at the edge with the enterprises.
And how are the enterprises viewing themselves
when it comes to 5G and edge?
Are they innovators?
Are they laggards?
Are they are they digging in?
What do you think?
CAMILLE MENDLER: Well, it's an extraordinary time.
We're coming out of this global pandemic.
And it seems like everything has changed.
All the rules have changed.
Before the pandemic you know you'd only
have 2.5% of enterprises saying I'm
an innovator, a technology innovator.
Now that number has quadrupled.
I mean, that was one of the questions
that we asked enterprises in this study
that we did with you.
And this was consistent around the world.
The innovative ambition of enterprises
has accelerated beyond many expectations.
And I think for service providers
particularly, that means the way that they
go to business, go to market, the way that they
talk to customers--
and the edge proposition, how they wrap that--
has to change fundamentally; new rules, new ambitions.
BRIAN KRACIK: Well, what are some of those new rules?
Do you think their ambitions are square?
Are they are they in line?
Are they exceeding ambitions?
Are they too ambitious?
Are they not ambitious enough?
What's that ecosystem look like?
CAMILLE MENDLER: Well, let's start with the service
providers.
I mean, some service providers have been in business
for even a century or more.
And they've been used to being the technology leaders.
And now we have enterprise customers
who've usually gone to service providers
and said, what is there available, who in a sense
accelerated beyond the ambitions of the service
providers themselves.
So that's very, very different.
And whilst I think the enterprises are
very pragmatic in what they need to do today--
so I think right now we're still in a recovery phase
in terms of let's exert control over what's
happening in the business.
Let's secure our environment.
There is, as I say, ambition to do things very differently.
I mean, one of the questions-- and this
is a really great question to ask-- is given the opportunity
to do whatever you wish to do with technology,
what would you enable for your customers?
And the number one answer across the board,
whether we were talking manufacturing,
retail, or whatever, was to allow customers,
enable customers to create their own products and services.
Now, that's an extraordinary answer.
And you've got to step back and think
what will be needed from an infrastructure perspective,
from a Cloud infrastructure perspective,
from a network perspective, to make such an ambition possible?
And that's where edge starts.
You start to understand why edge is capturing
the imagination of enterprises.
BRIAN KRACIK: Well, that's really interesting.
And I think that sets it up for what
were some of the biggest surprises you discovered
in speaking to enterprises themselves?
So was that the biggest discovery,
or are there other tidbits in there?
CAMILLE MENDLER: Well, a couple of things--
I mean, beyond the fact that the enterprises are more ambitious
than I expected, usually when you
are speaking to enterprises-- and when I say enterprises,
one of the things we wanted to make sure that we did
was not just speak to the IT department,
but all of the technology decision
makers across the enterprise in whatever role.
Usually, you will see some level of high level of concern
about rolling out a new technology.
What we found was a great comfort, an understanding
of what it will--
a perception that they understood edge, that even
today in many industries, 40% or more
were already using a form of edge.
So the technology appeared to be familiar,
perhaps because of their internal data center
usage of edge, of edge techniques,
that it was building on a knowledge of clouds.
So that was very exciting to see that they
had an understanding and an appetite
for edge that was far beyond what
I'd expect for what is supposed to be a nascent technology.
So that was one big surprise.
Another one was I think the realization-- again,
I think this is a pandemic-related thing--
of the need to orchestrate a fantastic network
infrastructure environment with a cloud environment.
Oh, and that network had to be both from an internal land
campus perspective as well as wide area.
BRIAN KRACIK: What have you heard or seen
about the openness of that too?
So whether you're a CSP deploying
a network or an enterprise cultivating your IT
to service those customers--
closed, open, multi-vendor, what was coming up?
What were the topics?
CAMILLE MENDLER: I think the number one issue that
came across very often was control,
and control through openness.
So if I really control my environment,
I can choose whichever technology, whichever vendor--
be it the cloud provider or the networking environment.
That's what they wanted, a platform that gives them
that level of control so they can slot in the partners
that they need.
That came up again and again.
So it wasn't, if you will, a security driven.
It was more about control over the digital environment.
BRIAN KRACIK: So let's put ourselves
in the space of the CSP.
And we've seen CSPs' revenues shrink over time.
And do you think this is--
is this the answer?
Are they going to go beyond connectivity?
Does this allow them that stuff to get in?
CAMILLE MENDLER: Well, service providers as an industry,
their revenues actually grew by almost 5% as an industry
in the past year.
But that is part of the pandemic effect.
And the greater understanding, I think some of the service
providers I've spoken to have, is
that they have to hook their business on some growth
trajectories.
But they are not just one product.
So whenever I think of edge, one of the great pieces of advice
that those who really get it talk about is it's
not just edge.
It's edge plus 5G.
It's edge plus AI.
It's edge plus analytics.
So it's a portfolio of services enabled through a networking
environment, a cloud environment, these techniques
that deliver outcomes to businesses.
So it's all about shifting to talking about outcomes, not
individual products.
Sounds simple, doesn't it?
But that means a big change in mentality for service providers
I think.
BRIAN KRACIK: So it always sounds simple.
There's always steps to take.
And it sounds like there is an awareness there,
and there are steps being taken.
What are some of those key applications where
edge is being deployed, enterprises looking
to create that self-service model,
really dig into these new tools?
What are some of those applications
they're looking for?
CAMILLE MENDLER: Well, let me step back and say,
first, let's talk about outcomes.
Because, by the way, that's what you sell an enterprise on,
on the outcome, not the tech.
And today, the outcomes, they're driving edge investment.
And keep in mind-- and this is one
of the big takeaways from the work that we did with Google,
and it was with enterprises around the world--
is that 7 out of 10 enterprises are planning to invest in edge,
will have invested in edge within the next 12 months.
OK?
Now, why are they doing that?
Well, there's some very pragmatic things
they're trying to do.
One is to become more efficient.
That's always a driver, efficiency.
So is safety and compliance.
Beyond that, they're interested in getting better insights.
And today, a smaller number are interested in monetization
from deploying edge.
Now, what does that mean in terms of applications?
A lot of it actually is cognitive analytics.
It's visual, trying to capture insight to become more
efficient, become safer through applying edge
in that type of environment.
A good example is, I spoke to water utility.
And the water utility has--
I mean, they're in a dam type of environment.
So you've got thousands of sensors
that need to report data.
In near real time or as real time as you can possibly get,
you need to be able to process what
is the meaning of that type of data
to make the right steps to both optimize
the production capacity, the power
that might be generated by that dam,
but also for safety reasons.
And that's a really good example of edge for efficiency
and safety and compliance.
Then we have-- later on, there are enterprises
who are talking about, well, enabling customers
to create their own products.
That's in the future, but I think that future
is coming very quickly.
So right now, I guess, Brian, I would
say that today we're still in this phase of recovery
and control.
But very soon, I would say by 2023,
it's going to be real creation and disruption.
BRIAN KRACIK: So just in recap, they're using it.
They have an understanding of edge.
CAMILLE MENDLER: Well, they think they do, yeah.
BRIAN KRACIK: And-- today they do.
And really, they're looking at far edge
too in one of those examples.
CAMILLE MENDLER: They are.
They are.
I mean, in fact there is no one single flavor of edge that
is prevailing today.
When you ask enterprises about what types of edge deployment
they have in place, you'll find that there's usually
about three different types.
And that's because partly experiments-- partly
legacy, because they've done it in-house
in their own particular way.
But the ambition to use far edge to work with different partners
is growing.
And I think that's where the market's
going to be going forwards.
BRIAN KRACIK: Very, very interesting.
And I think it's, as you stated, it's moving very fast.
CAMILLE MENDLER: It is.
It is.
BRIAN KRACIK: Yeah.
So we talked about the better efficiency
and some of the safety items.
If you take what is or what do you expect
to be the primary functions, just recapping that,
of organizational edge computing applications, what workloads
are going on there?
Are they all IoT quick bursts?
Is it heavier workloads?
Is it something-- why would they pull it out of the data center
and put it on their premise, or put it in its ESP network,
or put it way out to the far edge?
CAMILLE MENDLER: Unfortunately, it's not the simple answer.
It's a mixture of the sexy and the banal.
In terms of banal, it's like my storage
of my really important data.
There are different layers of storage.
And some of that storage better be closer to me.
And there might be regulatory reasons why that data needs
to be close to me.
So storage may not be sexy, but it's selling edge.
And then we're talking about the,
as I said, some of the visual cognitive analytics.
And actually, sexy but true, is the augmented reality.
Augmented reality-- and I don't mean
in the sense necessary from new consumer experiences,
but actually enriching how workers are out in the field,
getting information to them.
Helping them collaborate better is a big driver.
And that will drive a lot of edge.
And it's as much about the people
as it is about the things that's driving edge investment.
Oh, and we didn't say, but we should
talk about how much money is being spent.
And on average, what we found-- and we looked at midsize
to large organizations.
On average, it was--
the initial spend was going to be about 100k
in the first year or two, rising with some industries spending
more.
I mean, manufacturing, there was a larger will to spend.
There are more million investments
in edge, in manufacturing, than in certain other industries.
So I think there's a nuanced view.
That's something else that service providers need
to think very carefully about.
The propositions are not exactly the same by industry.
And it's not all sports and entertainment.
But there's a lot of manufacturing opportunity.
There's a lot of opportunity in retail utilities, in my view,
from the conversations I've had with enterprises.
BRIAN KRACIK: Why do we think--
you mentioned manufacturers.
What part of that manufacturing process, what part of that
is it and why?
What's that recipe for success, if you will?
CAMILLE MENDLER: I think when you speak to manufacturers,
some of them have been operating their internal networking
infrastructure for a very long number of years.
And they still have only partial visibility of their business.
And that is increasingly unacceptable
if you're trying to compete on a global level.
And so there is increasing will amongst manufacturers
to move out of that legacy environment.
Which, by the way, a lot of it is
about transforming their internal campus
to a private networking environment.
That's one of the important stepping stone.
So when I say edge is a portfolio play,
it's edge plus private networks.
There's a certain level of automation
they've not been able to do.
And even simple things--
let me give you an example of logistics.
Space management for goods that have been produced
and then need to be shipped out, simple things like that
are part of the process efficiency
that they're trying to find.
And if you've been working in an industry with technology that's
like 20-plus years old, it's not easy to change.
But they have to.
And I think there's a greater realization
that they must do so.
BRIAN KRACIK: So even-- what about, hey,
just do it with Wi-Fi?
If I'm a large manufacturer, why change?
CAMILLE MENDLER: In reality, I think the both will co-exist.
But it won't necessarily be Wi-Fi.
Because a lot of manufacturing infrastructure is actually
still wired actually.
So just going wireless--
step one is to go wireless, and then what you can control
in a wireless environment.
Well, you can empower your staff.
You can collect intelligence from all these inert objects
that could be reporting information.
And you can start using automated vehicles--
autonomous vehicles that can actually
transform your efficiency.
That's where some of the--
going forwards, there will be need.
Today, I have to say that manufacturing
is interested in the worker empowerment, the machine
efficiency.
And that needs low latency.
Maybe not 1 millisecond yet, but we're getting there.
BRIAN KRACIK: Well, efficiency, worker safety,
the amount of area you have to cover whether it's on a plant
floor, in or out when you go to distribution and shipping,
that becomes very advantageous from a coverage
perspective for sure.
CAMILLE MENDLER: It does.
And Wi-Fi can struggle in that particular sense.
But I think we need to be careful.
5G definitely has an extraordinary role,
which is recognized.
I mean, 8 out of 10 of the enterprises
we spoke to, irrespective of industry,
were saying we see that there is a role for 5G with edge,
that edge and 5G together is pretty
indispensable to our needs.
But I think we also need to be pragmatic.
I mean, that's one of the big pieces of advice
I would give to any service provider is offer choice.
You may know that 5G is the superior option.
But you've got to deal with legacy.
You've got to be able to deal with that transition.
And in some cases another technology in the mix
is going to be a rational choice.
So I think that's [INAUDIBLE].
BRIAN KRACIK: So I think you're kind of leading into it,
and it's perhaps our final question here.
What's your top recommendation for CSPs
to succeed and monetize the edge?
What's that recipe for success there?
CAMILLE MENDLER: I think number one,
you've got to focus very much on what
that outcome is that the enterprise is
trying to deliver on.
Is it specifically worker safety?
Is it specifically getting better analytics
to make decisions in near real time?
And it's not about creating 400 different plus use cases
and saying you can use edge for this.
It's focusing on the top five that really
matter for that particular industry
and really pushing on that.
It's also understanding that it's a portfolio sale.
Solutions are hardly ever spun on a single technology.
So it will be to get that outcome,
that analytics outcome, you're going to need edge.
You're going to need that, a campus overhaul.
You're going to need the right type of cloud environment
to do the extraordinary processing that you need to get
the insights, all of that.
So I think that's really important.
And that means not doing it alone, quite frankly.
You need to partner.
And to do that, you need a platform for partnership that
makes it super easy for both the enterprises who, by the way,
are going to be your co-creators.
Is that a bit scary to say that to a service provider?
They are going to be your co-creator.
They may be faster than you as part of the partners--
and to deliver that in a really simple way.
Whether we're using open APIs, whatever the underlying
method is, it has to be really easy to plug, to play,
to ideate.
So those are my pieces of advice.
Get the proposition right and the targeting
to the right decision maker.
I should mention that too.
It's not necessarily the IT department.
BRIAN KRACIK: Good to know.
You have to focus on who is the buyer.
CAMILLE MENDLER: Yes.
BRIAN KRACIK: What is the vertical?
CAMILLE MENDLER: Yeah.
BRIAN KRACIK: What is my portfolio of solutions?
CAMILLE MENDLER: Absolutely.
BRIAN KRACIK: And now, who do I partner with to help
get it there?
Camille, that's wonderful, thank you so much.
Great insight, Camille.
And if you want to hear more about recipes for success
by vertical, please come and download
our 5G and Edge Compete Study, The CSP Opportunity,
and get that full information and point of views
from our global study of enterprises.
Camille, thanks so much--
CAMILLE MENDLER: Thank you.
BRIAN KRACIK: --for sharing all your expertise and insights.
CAMILLE MENDLER: It's been fun.
BRIAN KRACIK: And that's a wrap for us.
Thanks for joining Tech Talk for Telecommunications.