5G Disrupts and Edge Cloud becomes the de facto architectural paradigm

By Bo Ilsoe, NGP Capital Partner

It is already happening, but 2021 will see 5G networks rolled out en masse. Changing the way we use connected devices and the services available to us via those devices. As VCs, my team and I are thinking about which sectors will benefit from 5G's improved speed, connectivity, and accessibility. We are looking at areas such as drone technology, robotics, and autonomous systems. Within the enterprise, we are looking at things like hybrid cloud technology, Edge Cloud, and data ops.

Higher data speeds and lower latency in the public cellular network than you have on your Wi-Fi, means we will see a re-architecture of the cloud infrastructure and a move to Edge computing. When you move computing to the edge you need a different way to manage your networks and secure them, for example.

As compute moves to the edge and to the device, you are opening attack surfaces meaning that you must protect data in transit. So rather than protecting your device, or your perimeter as a physical entity, it becomes an issue of protecting the data that you are moving, manipulating, or analysing.

As computing and connectivity moves to the edge, in 2021, we will see the landscape shifting to become rebuilt around five areas:

• Edge Hardware - Innovation in AI chips enable AI workloads to run at the edge, reducing power consumption and increasing processing speed. Innovations at the hardware level is a strong signal for how the tech stack is being redesigned.
• Edge AI - These include tools and platforms required to run AI inference and training at the edge. The democratization of AI models combined with falling hardware prices drives the adoption of AI at the edge. Although the AI ecosystem is fragmented at the edge, there are opportunities for companies to differentiate themselves through tech and data moats.
• Edge Connectivity and Real-time data -The enterprise networking space went through a reboot with new technologies such as ORAN, SD-WAN, network function virtualization and programmable CDNs. Processing real-time data and insights at the edge require re-inventing the analytics stack and we will see lots of players emerging in 2021. Most of these solutions will be open source, enabling IT to experiment at the edge.
• Edge Compute -With Kubernetes becoming the de facto standard for edge workloads, there is a real opportunity for an ecosystem, analogous to the cloud, to develop around edge workloads.
• Edge Native Enterprise App Ecosystem - Today, the edge is a solution specific story with enterprise IT writing their own custom "edge apps". The above-described innovation at the infrastructure layers will pave the way for an enterprise app ecosystem that satisfies highly distributed use cases. This app ecosystem will first emerge in select verticals like transportation or logistics, precipitating a more horizontal app ecosystem that is AI and sensor aware.

Why does Edge Cloud matter? Edge cloud is an essential co-traveller technology required to make widespread adoption of 5G a reality.

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About the Author

Bo Ilsoe, NGP Capital Partner, has more than 30 years of experience in venture capital and the technology sector. A technologist at heart, he believes in the positive transformative effects technology has on society and always comes with a global view of business.

From his current base in Geneva, Switzerland he has developed NGP Capital from initial commitments of $25M to more than $1B investing in the US, Europe, China, and India. Bo has through his portfolio exits created more than $3.0B in shareholder value during his time as an investor.

His current investment interests lie within the enterprise, transport, logistics, and digital health at present he is overseeing investments in Shippeo, Hysolate, NILT, Scandit, GetYourGuide, Deliveroo, GetAround, and Innovis. He graduated with honors with a Masters in Electronics Engineering from Aalborg University, Denmark.