Almost thirty years ago, when the internet was launched onto an unsuspecting world, even inventor Tim Berners-Lee and colleagues at CERN could not have predicted the upheaval that would follow. It has been the greatest technology revolution since the industrial original. And now it’s happening all over again. The combination of Cloud, IoT and AI is driving opportunity and threat in equal measure. Decisions made within organizations will have an impact for years to come. The way in which IoT-Edge links to the broader cloud backend, and the way in which AI integrates across the full processing chain, will be the key to unlocking material innovation and value.

After many years of rationalization and stretched infrastructure investments, the IoT represents a tipping point for telcos, the cellular networks on whose backbones the new IoT offerings will be delivered. For some time now, innovation in the sector has been driven by leading web services and platform providers, by global Over The Top (OTT) players who offer communications and streaming services across IP networks, and by the more innovative hardware and application developers. Broadly speaking, telcos have not yet monetized the data services traversing their networks to anything like the extent they would have hoped. Playing the link role between platforms and IoT devices has the potential to change all that if they execute quickly and intelligently. And for many, that will mean moving past traditional bureaucracy and behaving more like the OTT players themselves.

With the emergence of 5G, telcos can embed networking across the entire processing chain, delivering the fusion of cloud and edge. This will require collaboration with back-end storage and analytics platforms and with edge silicon and edge hardware developers. If successful, the networks will position themselves as a center of innovation. IoT devices tend not to be churned for shinier models. And if those IoT devices deliver services architected by the networks, linking to cloud analytics and storage platforms, then the status quo, so skewed in favor of Apple and Google and others might rebalance.

Cloud Vs Edge

It doesn’t seem so long ago that the cloud seemed innovative. Now the Cisco Global Cloud Index predicts cloud processing will reach 94% market share by 2021, leaving traditional data centers far behind. Cloud IP traffic is set to grow at a CAGR of 27% from 2016 through 2021. Overall, Gartner forecasts that cloud will account for 28% of enterprise IT spending in primary segments by 2023, up from 19% this year, reaching some $1.3 trillion. Microsoft’s Azure business unit, second only to market leader AWS, has now posted twelve straight quarters of revenue growth, usually 90% or better, albeit ‘only’ 76% in its most recent period.

As fast as cloud computing and cloud-based AI has centralized and virtualized, IoT is now set to distribute and fragment as it races to network billions of physical devices to make life easier and more automated. IHS Markit forecasts 125 billion such devices by 2030, up from 27 billion last year. And Intel predicts the value of IoT technology to be as much as $6 trillion by 2025. It is this impact on industry that Accenture estimates could add $14 trillion to the global economy by 2030. They describe the manufacturing and industrial processes share of IoT, the Industrial Internet of Things, as “the biggest driver of productivity and growth in the next decade… accelerating the reinvention of sectors that account for almost two-thirds of world output.” IoT in all its guises will drive the annual growth in data transmission from 25% to 50%. It will also shift processing from the cloud to the edge. There is too much data, it’s too indiscriminate, too centralized, and it takes too long to access. According to Accenture’s 2018 Technology Vision Report, this ‘internet of thinking’ extends intelligence from cloud to edge. “To fully enable real-time intelligence, businesses must shift event-driven analysis and decision processing closer to points of interaction and data generation. Delivering intelligence in the physical world means moving closer to the edge of networks.”