Editor’s note: In a report titled 2022 Technology Trends and How They Impact Industry 4.0, Education, and Retail, a team of Orange Silicon Valley analysts with deep subject matter expertise looked at five key innovation trends and how these trends will affect the Industry 4.0, Education, and Retail sectors. This report – from Kevin Baker, David Martin, James Li, and Arpan Soparkar – is now being made available for our Orange Silicon Valley website readers in a series of five weekly articles.
This article examines Cloud/ Edge Computing. Other articles in the series include the Metaverse (including XR/AR/VR); Data & AI (Artificial Intelligence); Future of Work; and Sustainability. Each section of the report includes success stories and promising startups that play into each trend. For additional questions or information, please email David Martin.
Trend: Cloud/ Edge Computing
Cloud and Edge computing both describe distributed computing systems, yet the two offer different benefits. Where the Cloud is marked by scale, the Edge is marked by proximity to data sources. Factors such as privacy concerns and growing demand for applications that rely on real-time data processing are motivating organizations to increasingly leverage Edge computing infrastructure. One size does not fit all when it comes to IT infrastructure, and a combination of the Cloud and the Edge is often necessary to optimize computing needs.
Grand View Research estimates the global Cloud Computing market to be worth approximately $370B and the global Edge Computing market to be worth approximately $6B. There are discrepancies around growth projections for both markets. However, market researchers agree that the Edge Computing market will show stronger growth than the Cloud Computing market with projected CAGR between 30% and 40% for the Edge market and projected CAGR between 15% and 20% for the Cloud market over the next six years. Gartner estimates that 75% of enterprise-generated data will be created and processed outside a traditional centralized data center or Cloud by 2025 compared to 10% in 2018.
Vertical: Industry 4.0 & Cloud Computing
Distributed computing can extend the computing power of sensor-equipped tools beyond what is practical or, in some cases, physically possible with on-premises or on-device computing. With the Edge, this computing power can be extended in real-time with location flexibility, which enables benefits, such as remote monitoring and preventative maintenance of industrial processes. This allows manufacturers to operate proactively in a field where operating in a reactive manner can be extremely costly. The Wall Street Journal estimates unplanned downtime in operations costs industrial manufacturers $50 billion per year.
Example
Streamline Innovations is using Edge Computing to bring intelligence and remote operations to oilfield equipment deployed in locations with limited connectivity. The company can monitor 50 key performance indicators (KPIs) during its sulfur removal process from smartphones, tablets, and desktops. The Edge platform provides precision process control with “tiered” intelligence to monitor and analyze performance minute-to-minute and hour-to-hour. Their proprietary solution would normally require six full-time operators and extensive on-call maintenance 24/7. Using the Edge to operate remotely allows Streamline Innovations to reduce staffing requirements by 66%.
Startups
Stratus provides their ztC Edge capabilities to develop, host, and protect Streamline Innovations’ platform. Stratus offers redundant Edge units, so if one fails, other units can still be available to support service. Their Edge achieved 99.5% uptime for Streamline Innovations, which was the primary driver behind Streamline’s choice of Edge providers.
Vertical: Education and Cloud Computing
Cloud computing has proven transformative for the education sector. With this power, MOOCs (Massive Open Online Courses) have driven the revolution to democratize access to quality education in the past decade. The flexibility of its inherently asynchronous nature and its on-demand scalability offers a robust and efficient model that works for a variety of student groups across geographies and demographics. Similarly, with the pervasiveness of smartphones and other hand-held devices, edge computing holds enormous potential to empower people in areas with low technology penetration. Rural areas of developing countries stand to gain major advantages not only in the sector of education but also in industry and commerce.
Example
Blackboard, the largest education technology and services company in the world has partnered with AWS (Amazon Web Services) to power Collaborate Ultra virtual classroom solution, which offers both synchronous and asynchronous course capabilities, easing the transition to a fully digital education environment. Between March and May ‘20, the platform served 3M new active users, for a total of 2.3B virtual classroom minutes. It was the elasticity and resilience of cloud computing that allowed the platform to handle huge surges in users, with 50X scalability through AWS.
Startups
San Francisco, CA-based Clever is a cloud-based data-storage medium application for third-party e-learning systems and schools/districts. It serves as a convenient and secure bridge between schools’ Student Information Systems and online learning applications. BrightWheel, another San Francisco-based startup, is a leading platform for early education that combines SaaS, Payments, and a consumer-like daily experience.
Vertical: Retail & Cloud Computing
With a dearth of retail workers, stores want to automate repetitive work, increase margins, and put their retail staff in front of customers to increase sales. The opportunity is to optimize stores, not only individually but across the country, by testing layouts in a few stores and applying the learnings to the entire fleet. Edge computing enables stores to become smarter because data can be processed in the store, and local managers can act. Connectivity and bandwidth bottlenecks also mean that limited data can be transferred to the Cloud for processing and insights.
Juniper Research estimates that purchases using such smart tech will reach $387B USD in 2025, up from just $2B USD in 2020.
Use cases
- Smart store analytics: Analytics platforms help manage inventory and optimize store layouts, merchandising, and staffing through video, analytics, and heatmaps.
- Loss prevention: Detect theft attempts using video monitoring systems that identify shoplifting.
- Automated or cashierless checkout: Companies like Amazon and startups are testing and pushing cashierless solutions into retail. Solutions vary from custom wide-angle camera solutions with weight-sensitive plates under products to off-the-shelf cameras that recognize people and objects for purchase as they interact and eventually leave stores. Roaming robots and cameras are also used to automatically track and maintain inventories.
- Omnichannel fulfillment: In many cases, retailers fulfill online orders by taking products from local store inventories or directly from the shelves for delivery or pickup.
- Consolidated systems: “Where once the Points of Sale (PoS), network management, routers, firewalls, transaction processing might all have needed dedicated hardware, these have all been virtualized and condensed into one unit.”
Example
Gap has 2,500 stores and more than 100,000 devices across those stores. They have rolled out edge computing in-store and have cloud redundancy if the edge server goes down. Gap also can update all their store and device systems in a single day, while in the past, updating systems was a logistical nightmare. (Source)
Startups
Standard Cognition, Grabango, Zippin, and Radar all offer cashier-less checkout solutions like Amazon Go.