New demand, new markets: What edge computing means for hardware companies
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
New demand, new markets: What edge computing means for hardware companies With over 100 edge use cases identified, the fast-growing need to power connected devices demands a custom response from vendors. JM Chabas, Chandra Gnanasambandam, Sanchi Gupte, and Mitra Mahdavian OCTOBER 2018 • HIGH TECH PRACTICE
As connected devices proliferate and their In considering the sheer variety and volume of
capabilities expand, so does the need for real-time edge use cases, it becomes clear that the demand
decision making untethered from cloud computing’s for the edge computing technologies that enable
latency, and from connectivity in some cases. This them will in turn create myriad opportunities
movement of computational capacity out of the in a vast number of industries. In this article, we
cloud—to the edge—is opening up a new sector: edge map out more than 100 edge computing use cases
computing. across 11 sectors that we believe could create
more than $200 billion in hardware value in the
By circumventing the need to access the cloud to next five to seven years (Exhibit 1).
make decisions, edge computing provides real-time
local data analysis to devices, which can include What drives edge computing?
everything from remote mining equipment and To understand what effect edge computing will
autonomous vehicles to digital billboards, wearable have, it is important to know what causes its
health appliances, and more. evolution. Edge computers have an infinitely
wide range of uses; however, the conditions in
IoT devices tend to operate under different which they operate form the driving factors for
conditions from those of the controlled this new field and the technologies that serve it.
environments of offices and factories, driving These are:
demand for a whole new set of technologies that
can allow computing in those situations. Take the Varied connectivity and data mobility. Edge
scenario of a military drone deployed on a tactical technologies can operate in places that might
surveillance mission in a high-intensity combat limit or require intermittent connectivity to
zone. It is essential for the drone to be able to the cloud for services like computing, storage,
collect, process, and transmit high-quality data in backup, and analytics.
real time, despite numerous challenges, including
remote location, limited connectivity, and extreme Need for real-time decision making. Edge
environmental conditions. use cases often require data to be processed
instantly, for self-driving cars or automatic
While the drone can use mobile satellite picking machines, for example. These devices
connectivity to access the secure military cloud, it’s and platforms need to be able to do analytics
much faster if it does the computing onboard, using locally, without first sending data to the cloud, so
lightweight data storage and compute power. This decisions can be made rapidly.
way of computing—on the edge of the cloud—lets the
drone stay in sync with both the command center Localized compute power. Edge computers
and troops on the ground, without the latency that need to be lightweight devices that can make fast,
computing in the cloud involves. Once the job is done, secure decisions without the support of bigger
the drone returns to base and can connect with the computing power.
larger system, now transferring its data to the cloud,
New storage and security needs. As the
where it can be used to feed algorithms and other
numbers of sensors generating data on remote
advanced analytics activities.
and mobile devices grow, so does the need for
New demand, new markets: What edge computing means for hardware companies 2TMT 2018
New demand, new markets: What edge computing means
for hardware companies
Exhibit 1 of 6
Exhibit 1 Edge computing represents a potential value of $175B–$215B in
hardware by 2025.
% of total edge % of total edge
Industry use cases 2025 hardware value1 Industry use cases 2025 hardware value1
1 Hardware value includes opportunity across the tech stack (ie, the sensor, on-device firmware, storage, and processor)
and for a use case across the value chain (ie, including edge computers at different points of architecture).
efficient storage that can be secured in a variety of technologies need to be more specialized. For
environments. example, the data storage and computing power
needed for precision agriculture will be different
Intermittent power. Power and infrastructure from that needed to run mobile, durable medical
variations at the edge are pushing the boundaries appliances or safety equipment in a mine.
of performance and capabilities of edge solutions.
Especially in industrial applications, edge In our research we identified 107 edge computing
computers need to be able to operate with a power use cases (Exhibit 2). These applications are
supply that might be sporadic. not conceptual: we identified 3,000 companies
deploying these use cases today to understand
What opportunities will edge computing open? the potential opportunities across sectors and
Unlike recent technological advances such as cloud the technology stack. Our calculation of the value
computing, where most gains were captured by just they could generate focused on hardware, but of
a few major players in the technology sector, edge course the opportunity extends to software too. We
computing creates opportunities across a breadth considered the hardware stacks (the value of the
of industries. In addition, while much of today’s sensor, on-device firmware, storage, and processor,
technical infrastructure is sector-agnostic—the for example) and use cases across the edge value
same cloud that powers an ecommerce engine also chain (including edge computers at different points
powers the workflow of a bank—edge computing in the architecture).
3 High Tech PracticeNew demand, new markets: What edge computing means
for hardware companies
Exhibit 2 of 6
Exhibit 2 A comprehensive market analysis revealed 107 concrete use cases
for edge computing. (1 of 2)
New demand, new markets: What edge computing means for hardware companies 4New demand, new markets: What edge computing means
for hardware companies
Exhibit 3 of 6
A comprehensive market analysis revealed 107 concrete use cases
for edge computing. (2 of 2)
5 High Tech PracticeTo chart each particular opportunity, we adopted improvements in human productivity and safety
an industry lens to conduct our analysis, identifying from edge computing.
edge use cases and quantifying the potential
resulting hardware value. Based on the percentage Given the central theme of edge computing—that
of edge use cases in each vertical, the top three a majority of the computing is done closer to
verticals are: where the data is being generated, and so real-
time decision making can’t rely on the traditional
Travel, transportation, and logistics cloud or massive on-premises data centers, the
varying conditions that each use case involves
Global energy and materials drive the technology needed for it. Looking at
this through the lens of specific use cases gives
Public sector and utilities
a sense of the range of technologies that will be
needed. For example, autonomous vehicles rely
The benefits of past technology revolutions were
on visual processing, among other technologies,
concentrated in sectors with heavy tech users, such
TMT 2018 and these systems have to be able to withstand
as financial services. For edge computing, sectors
New demand, new markets: What edge computing ruggedmeans
environments that involve variations in
that have traditionally been less tech-intensive, such
for hardware companies weather, vibration, and connectivity. (Exhibit 3).
as energy and materials, stand to make substantial
Exhibit 4 of 6
Exhibit 3 Individual use cases have specific operating conditions and customer
needs that shape technology requirements. (1 of 2)
Computing Edge
Overview needs computer Ecosystem Environment
Autonomous Real-time • Autonomous • Autonomous Rugged, mobile
vehicles must make decision-making: vehicle vehicle OEMs outdoor
instantaneous To avoid fatal • Garage-based and integrators environment with
driving decisions consequences, data center1 • Automotive OEM broad variations in
based on data data must be suppliers temperature,
collected via LIDAR, processed in • LIDAR, RADAR, vibration, and
RADAR, and video real-time for and video connectivity
cameras immediate camera vendors
Autonomous Once the car decisions to turn,
vehicles returns to its brake, or accelerate
garage, data may
be offloaded to
edge computer for
Travel,
further analytics
transport,
and
Location-based Localized Processor • Local, state, and Semi-outdoor
logistics advertising in public computing power: embedded in national transit environment with
transportation uses Displays must display systems authorities intermittent
the location of a function on vehicle • Advertising connectivity that
vehicle to independently with agencies varies by route
Location- customize display limited connectivity (eg, urban, rural,
advertisements Compact form aboveground, and
based
near consumers factor: Devices underground
advertising The advent of 5G must be
could make lightweight, small,
location-based and low-power
advertising possible
at scale
New demand, new markets: What edge computing means for hardware companies 6Individual use cases have specific operating conditions and customer
needs that shape technology requirements. (2 of 2)
Computing Edge
Overview needs computer Ecosystem Environment
Highly digitized Real-time Hyperconverged2 • Oilfield services Harsh external
drilling rigs decision-making: edge appliance companies that environment
generate data from With limited integrate the with drastic
multiple sensors on connectivity, data end-to-end temperature
equipment; the data must be analyzed drilling solutions variations and
collected by these and acted upon in for oil and gas limited
Offshore sensors needs to real-time to avoid rigs connectivity.
drilling rigs be processed on damage to • Hyper-con
the rig to avoid expensive verged solution
equipment damage equipment vendors
and interruptions in Rugged form
operations factor: Device must
Global function in harsh,
energy at-sea conditions
and
materials Sensors on Real time Hyperconverged • Mining Harsh outdoor
monitoring decision-making: edge appliance corporations and underground
equipment, in the With limited • Hyper- environments,
environment and on connectivity, data converged with limited or no
employees, must be processed solution vendors connectivity
Health and generate data that and acted upon in
safety in is processed in real real time to prevent
mining time to improve dangerous or fatal
workforce accidents
productivity, Rugged form
workplace safety, factor: Computer
and operational must withstand
efficiency harsh mine
environment
Sensor modules with Real-time Hyperconverged • State utility Outdoor
integrated compute decision-making: appliance companies environment with
are deployed in In remote settings • Electronic varying tempera-
aquifers, treatment with no connectivi- equipment ture ranges, and
plants, and pipes; ty, information must manufacturers indoor factory
modules or be processed • Hyper-con environment, such
hyper-converged locally in real time verged solution as central water
appliances process Rugged form vendors treatment plants
Water data on-site to factor: device must
quality monitor water quality withstand outdoor
monitoring in real-time, and in environments
areas with strong
connectivity, data will
be intermittently
transferred to the
cloud for centralized
Public analytics
sector
and Sensors and video Real time Hyperconverged • State Outdoor
utilities cameras deployed decision-making: appliance infrastructure environment
on roads and at data must be companies exposed to
traffic lights capture processed in real • Third-party toll the elements,
data on traffic flow; time to respond to operators with varying
information is congestion quickly • Hyperconverged temperature
transmitted to a Efficient storage: solution vendors and moisture
Congestion hyper-converged large volumes of ranges
lanes appliance2 hosted video data must be
at intermittent street quickly accessed
locations to monitor for analytics
traffic patterns and Rugged form
implement factor: device must
demand- based withstand outdoor
pricing environments
1 Mobile micro data center deployed at telecommunications network edge.
2 A hyperconverged appliance combines compute, storage, and networking resources in a single piece of hardware.
7 High Tech PracticeThe edge will soon be everywhere Very soon edge computers will be all around us performing distributed computing across a multitude of devices in homes and factories, on farms, and throughout public infrastructure. The forces fueling the demand for these devices and the technologies enabling them are advancing rapidly. For tech companies, the development of edge technology will revolutionize industry with solutions customized for diverse use cases. This will create a paradigm shift from the device and original equipment makers all the way through to how such products are sold, installed, and serviced. The changes that result will affect all players in the tech stack, consumers in a vast array of sectors, and any companies and leaders looking to have a role in it. JM Chabas is an associate partner in McKinsey’s San Francisco office. Chandra Gnanasambandam is a senior partner in the Silicon Valley office, where Sanchi Gupte is a consultant and Mitra Mahdavian is a partner. The authors wish to thank Joseph Greenberg, Brahmjot Singh Kohli, Ritika Bipin Singh, and Daniel Sun for their contributions to this article. Copyright © 2018 McKinsey & Company. All rights reserved. New demand, new markets: What edge computing means for hardware companies 8
You can also read
