New Strategies for Network Service Providers
In our first article in this series about edge computing, we talked about the edge from the perspective of hyperscale cloud providers. While the forces shaping edge computing are the same, the strategies and outcomes will be different for network service providers. By carefully evaluating their options, data center locations, and required architectures, these companies can make the best choice to operate at the mobile edge and capitalize on all that 5G has to offer.
It seems like you can’t go a day without hearing about the imminent arrival of 5G, and the transformative impact it will have on consumers and businesses.
As a quick overview, 5G is the fifth-generation technology standard for broadband cellular networks and will deliver quantum leaps in performance and capacity in three categories: enhanced Mobile Broadband (eMBB), massive Machine-Type Communications (mMTC), and Ultra-Reliable Low-Latency Communications (URLLC)—all critical factors for providing better applications, content experiences, and services in the near future.
The rollout of 5G officially started in some markets in 2019, yet its full implementation is expected to take a few more years before it will be available in all areas. Even so, adoption is expected to surge: According to recent research, by 2022, there will be approximately 1 billion 5G subscriptions worldwide. In the U.S. alone, an estimated 50 percent of all mobile connections are expected to be 5G-enabled by 2023.
Game-Changing Use Cases—and Implications
5G will inevitably lead to much more data creation and processing as well as internet exchange and peering at more locations since application support is central to its design. This, in turn, will require even more real-time data processing and storage. All of this will be needed to support next-generation business concepts and use cases such as:
Clearly there will be many more use cases and new commercial 5G products and services—many of which we can’t even predict yet—but all will require new ways of operating at the edge for today’s network service providers.
New Table Stakes For 5G Success
While some of the previous examples are speculative, it is certain that 5G will completely change the topology of networks from core to edge. This shift will create valuable new opportunities for
network providers as well as fiber companies and multi-tenant and modular data center providers.
Additionally, there will be an increase in the number of nodes—as well as the emergence of entirely new types of nodes—to support 5G’s low-latency capabilities. This will drive demand for secure data center space at more locations for compute, storage, and interconnection as well as the need for more networks and fiber between the nodes for aggregation.
The effort is already underway. We’re beginning to see examples where 5G network builders (Dish Networks, AT&T, Verizon) are collaborating with terrestrial fiber providers (Zayo), cloud computing companies (AWS) and data center providers such as DataBank. These companies are all working together to build the ideal network infrastructure to capitalize on all 5G has to offer.
The Shift from a Terrestrial-Powered Edge to a New Wireless Edge
In the past, the entire industry leaned toward a centralized model where servers, fiber optic cables, and data storage were consolidated in a relatively small number of traditional data centers and locations. This model helped companies scale data storage and processing while maximizing efficiency and reducing costs. For example, data was created, processed, and stored centrally using one or more public cloud availability zones or data centers in East, Central, and West Tier 1 markets.
These networks tended to be characterized by large network and fiber providers who were naturally drawn to Tier 1 markets and a high number of connections occurring to and from these zones and data centers. Additionally, internet exchange and peering was happening in the large carrier hotels within these regions.
Yet, with the emergence of 5G and the new era of mobile edge computing, far more data will be created at the edge and the “far edge” and will need to be processed and stored there to support IoT, robotics, gaming, autonomous machinery, and latency-sensitive applications and workloads.
In this case, these networks will be characterized by smaller, shorter connections to aggregation points. One example of this is Open Random Access Networks (O-RAN), a network architecture designed specifically to support 5G mobile networks. Instead of using a one-to-one correlation between remote radio units and baseband units, O-RAN now enables virtualization through the baseband pool, including networking, computing, and storage. O-RAN also uses open platforms and real-time virtualization technology to improve scalability and support multi-vendor, multi-technology environments. As a result, O-RAN hubs will be an important part of any mobile edge strategy, and one that network architects will need to carefully consider.
In these mobile edge environments, network providers will increasingly be drawn to Tier 2 and Tier 3 markets, expanded geography within Tier 1 markets and the multi-tenant data centers located in them. They are also expected to take advantage of modular data center platforms that can be “dropped” anywhere with closer proximity to fiber and cellular tower infrastructure. They will also be able to perform localized internet exchanges in facilities that are more open and neutral than past options.
Opportunities for Network and Fiber Providers
It’s important to note that wireless networks still need globs of terrestrial fiber to connect the nodes and perform important tasks such as aggregation. The expected spike in nodes and O-RAN infrastructures will require more fiber to connect them all, and more fiber will be needed as more Tier 2 metro markets continue to expand or build new data centers and adopt the 5G network architecture.
This means fiber will continue to be a crucial piece of the overall equation. With the incorporation of millimeter wave and mid-band spectrum, propagated from a larger number of nodes, fiber backhaul for capacity and to provide critical on-ramps to the cloud are essential. It is for this reason that Dish Networks recently signed a major fiber deal with Zayo to provide backhaul and fronthaul transport for its 5G networks.
Opportunities for Multi-Tenant Data Centers and Modular Data Center Operators
At the same, time, we believe 5G represents a significant opportunity for multi-tenant data centers and modular data center operators. More distributed compute and storage infrastructure will need more secure data center space to host edge computing, edge cloud nodes, and edge interconnections.
Yet, transitioning from 4G to 5G networks is not just an equipment upgrade; instead, it requires a fundamental change in network topology and new sites to operate at shorter distances and higher speeds (up to 250 mph). The industry is growing to keep up with demand. As evidence, research from Small Cell Forum cited the doubling of cell sites, from four million in 2019 to more than eight million in 2020. These numbers will continue to grow to keep pace with 5G.
Building 5G networks from scratch does have its advantages—and presents new opportunities within the industry. This decision allows network providers to be more strategic in their data center location, compute architecture, and interconnections. It also gives them more flexibility and control than working with a public cloud vendor who may claim to provide 5G edge computing, but in reality, is still heavily reliant on the same centralized model.
Multi-tenant data center providers, such as DataBank, who already operate multiple data centers in Tier 1/2/3 markets are well-positioned to support network aggregation points (such as O-RAN) and emerging computing and cloud initiatives. Additionally, modular data center operators can now create a mobile edge compute and internet exchange node wherever it’s needed.
About the Author: Raul Martynek joined DataBank in June of 2017 as the CEO and is a 20+ year veteran in the telecom and internet infrastructure sector, having held senior positions at several communications and networking companies as well as asset management firms. Raul earned a Bachelor of Arts in Political Science from Binghamton University and received a master’s degree in International Affairs from Columbia University School of International and Public Affairs.
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