Edge computing's driving role in digital transformation

Schneider Electric

By Joe Craparotta, Vice President of Secure Power
Tuesday, 13 April, 2021

Edge computing's driving role in digital transformation

We are witnessing a reshaping of the IT world through edge computing, with its rapid adoption accelerated by COVID-19 as businesses prioritise digital transformation.

With companies expediting their digital transformation, edge computing can unleash the power of local data that is generated from digitised and connected devices of all kinds. Data, as we know, is the currency of success, and companies are utilising it to be safer, make better decisions, establish competitive advantage and drive revenues.

Gartner estimates that 75% of enterprise data is expected to be created and processed at the edge by 2025, and a 2019 report by Analysys Mason suggests that enterprises will spend an average of 30% of their IT budgets on edge computing over the next three years.

New research by Tech Research Asia, commissioned by Schneider Electric, found 28% of IT leaders across Asia Pacific are leveraging across multiple sites, with another 38% stating they would adopt edge computing in the next two years.

The research surveyed 15 chief information officers and 1100 technology leaders across industries in Asia Pacific on the current state of IT, edge computing use and future plans.

Australian IT leaders were the leading proponents of edge computing. Two-thirds said edge computing projects were a first-rank priority over the next year, followed by 48% for data centre modernisation and cloud computing.

Edge computing will clearly play a pivotal role in IT strategies and digital economies over the next decade. It will drive new investment and improved outcomes for many organisations. The research demonstrates that it will not be a replacement for cloud computing, or even traditional on-premises infrastructure, but rather be a complementary force.

We are seeing ‘hybrid IT’ coming to the fore with 51% of respondents indicating they will have a mix of cloud and on-premises infrastructure. Edge computing complements cloud computing in a hybrid IT environment. While cloud computing leverages centralised data centres, edge computing leverages distributed micro data centres at the edge of the network, closer to where data is generated.

The top reason IT leaders adopted edge computing was to address bandwidth and latency issues — evidence that there is significant value in deploying edge in today’s business environment, where speed and greater efficiency is a competitive advantage.

The survey revealed that 72% of the respondents that have adopted edge computing saw benefits in terms of reduction in IT costs, followed by reduction in operational costs (46%) and increase in customer satisfaction (34%).

The higher education sector tops the adoption of edge, embraced by 68% of organisations surveyed. About half of those surveyed in the healthcare industry have adopted edge computing, of which 80% are existing users of some form of cloud computing service. In financial services, the survey indicated a preference for utilising edge computing over moving workloads to the cloud, with two-thirds of organisations adopting edge computing.

Across the manufacturing sector, companies were generally pursuing a hybrid IT model with workloads located on a case-by-case basis. In manufacturing, nearly nine in 10 respondents said data centre modernisation or cloud computing was a most urgent priority for next year, followed by 45% for edge computing projects.

These trends emphasise the importance of edge data centres, as the nature of work performed by IoT devices within commercial environments is creating a need for much faster connections between data centres or cloud and the devices that are being widely used through remote working and cross-border collaborations.

To meet increasing demand, it is absolutely critical for data centres to be both sustainable and resilient. At our current pace and based on internal projections at Schneider Electric, energy consumption by data centres is expected to double by 2040; an increase largely attributed to the continued rise in edge data centres. And with 7.5 million new micro data centres expected to be installed by 2025, the global footprint at peak power stands at a staggering 120 GW for edge facilities alone. This adds up to between 450,000 to 600,000 tonnes of CO2 per year.

Increased energy consumption by the data centre industry will not go unnoticed by the public and governments. Companies undergoing digital transformation require critical networks, systems and processes that are highly available, resilient and sustainable.

Deployed at scale, edge data centres are both resilient and sustainable when they factor in standardisation and integration; improved efficiency (with data insights, benchmarking and predictive analytics); the ability for remote monitoring and management; and designs for minimal maintenance.

As digital transformation initiatives accelerate, sustainability remains an essential cornerstone in our digital-centric world. While the world moves towards leveraging the edge, we need to keep in mind that the solution is only as strong as the coordinated efforts that are put in place to optimise systems and processes. By pushing the limits of technology and innovation, more successful and sustainable business operations are achievable.

Image credit: ©stock.adobe.com/au/BillionPhotos.com

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