As the South East Asian economies emerge from the lockdowns, there are some lessons from the pandemic that many enterprises in the region can draw from. Those with a diversified revenue stream fared better. For leaders, there was no pause button for innovation during the pandemic and laggards will play catch up post pandemic. The wheels of innovation will keep spinning post pandemic and probably pick up a notch or two. Secondly, enterprises who have invested heavily in customer engagement tools and have an omni-channel model smartly outperformed. Thirdly, enterprises that have intelligence driven business processes and operation were more effective during the pandemic. Bottom line is enterprises are becoming data or intelligence driven. The importance of having data residing closer to the center of activity becomes more critical as enterprises look to extracting insights quicker. Omdia believes edge services will begin to take on new urgency post pandemic.
Data residing closer to the center of activity becomes more critical as enterprises look to extracting insights quicker.
Source: Omdia – Figure 1.
Currently, two-thirds of companies in South East Asia process less than 25% of their data at the edge of the network, and nearly half process less than 10% of data at the edge – but that is set to change dramatically post pandemic. The same proportion (two-thirds) will be processing more than 25% of data at the edge within two years – and more than half of those, 37% of all companies, will be processing at least half their data at the edge. Omdia believes that edge services will be mainstream in the short to medium term especially with manufacturers. Omdia believes that manufacturers will lead in the region in deployment of edge services especially the region where there is significant manufacturing clusters, in Thailand, Vietnam and Singapore. Other verticals that will be early adopters of edge will be logistics and transportation, healthcare and other industries that are looking to enhance customer experience.
The combination of 5G-enabled high-bandwidth communications with low latency, localized fast data processing through network functions virtualization (NFV) – together with AI-based decision-making, microservices, and edge application development (DevOps and containerization) – is making edge computing and service innovation a coherent operational proposition. The build out of 5G networks in the region by telecoms over the next 24 months will serve to accelerate adoption of industrial IoT services in the region and edge technologies is a core component of it.
There are many drivers for edge services. According to Omdia’s edge survey, improved operational agility, security, and application performance will drive the business case for edge services in South East Asia. Our respondents chose improved operational agility (25%), improved security (18%), and improved application performance (16%) as their top three business drivers for the increased adoption of edge services (see Figure 2). Improved process visibility and customer experience were also recognized by many respondents.
Source: Omdia – Figure 2
South East Asia enterprises want business and operational performance improvement more than the prospects of technology innovation or reduced network costs through edge computing deployment. Service providers must make sure their managed services do not fail the business test.
There will be barriers to hold back deployment. There is a surprising number (25%) of businesses who are cautious about edge service deployment, primarily because they have not examined what it is or investigated its possibilities (“lack of knowledge”). Market education will be needed but Omdia believes there is no shortage of this now and over time, enterprises will be up to speed. The most specific barrier to deployment is related to security requirements and doubts about security. Omdia expects an increased spending in security as edge takes off especially around the networks and encryption in line with the proliferation of data that will rest at the edge. However, others cite technology fragmentation, presumably because the new systems in edge computing might in their view add complexity or require internal redeployment of people and skills. There will also be requirements to integrate new technologies with legacy systems. Edge also works best when data stop sitting in silos. Enterprises will also need to retool their information architecture.
Despite the uncertainties or barriers, Omdia believes that the future will be at the edge especially with the onset of 5G in Singapore. The need for speed to data and the extracting intelligence will outweigh some of the drawbacks, especially cost. The competitive landscape for many industries is moving faster than ever, and rapid innovation and agile operations will be key goals for enterprises. Edge services will be a cornerstone of many of these conversations. Over the next 12-24 months, Omdia believes that the ICT industry will see an acceleration of partnerships formed to drive more edge solutions and awareness in the marketplace. This will bring together players from various segments of the industry from hyper-scalers, software providers, telecoms and system integrators. More importantly, enterprises will train their IT employees with the necessary and relevant skills so that they can leverage edge to the fullest.
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