Sunday, January 21, 2024

Are Multi-Access Edge Computing Revenue Forecasts Too High?

Mobile service providers are optimistic about their potential roles as suppliers of multi-access edge computing, where they can play a role in supporting processing cycles “at the edge of the network.” 


But the assumptions vary. Some studies include the value of hardware, software and services revenue. Others reflect a narrower definition. Estimates including the value of infrastructure (hardware and software) revenue as well as “edge computing services” will obviously be quite a bit higher than those estimates looking strictly at “edge computing as a service” revenues.


And some estimates might attribute “edge computing as a service” revenues in such a way that partners such as Amazon Web Services or Azure or Google Cloud are providing the actual “computing” but in cooperation with mobile or fixed network service providers who provide facilities or connectivity. 


Study by

Published

Projected MEC Revenue by 2030

CAGR

Grand View Research

2023

$92.4 billion

46.7%

ABI Research

2021

$84.6 billion

47.4%

STL Partners

2022

$50-70 billion

35-40%

Accenture

2020

$43.1 billion

33%


Some estimates might be more granular, breaking out  revenues earned by edge computing services that are earned by mobile service or “managed service”  providers, data center operators and cloud computing services. 


And even those estimates might be too optimistic, partly because much “edge computing” will be supported directly on devices (smartphones, internet of things sensors, vehicles) and not using some MEC processing facility.  


Study

Year of Publication

Global MEC Market Revenue by 2030 (USD Billion)

MSP Share (%)

Data Center Share (%)

CaaS Share (%)

Grand View Research

2023

55.41

35

25

40

Allied Market Research

2023

102

30

30

40

Market Research World

2023

86.7

32

28

40

Statista

2023

24.24

35

25

40

Research and Markets

2023

82.3

30

25

45

Market.us

2023

92.4

32

27

41

Mordor Intelligence

2023

59.2

33

27

40

Omdia

2023

38.5

35

25

40

ABI Research

2023

49.5

30

25

45

IDTechEx

2023

32.4

32

28

40


It might be reasonable to assume that most eventual MEC revenues earned by all the suppliers--mobile service providers, data centers and cloud computing services--will be in the business-to-business or business customer part of the market, and support use cases other than direct IoT use cases. 


The reason is that most consumer  “edge computing” operations will support imaging, speech-to-text or other operations conducted on-device. Some believe about half to 80 percent of such smartphone and consumer device “edge computing” operations will be handled directly on the device.


Healthcare wearables likewise might process as much as 60 percent to 80 percent of data right on the device. 


And even most Industrial IoT sensors (up to 70 percent) might process workloads solely on-device.Though more complicated “trend” analyses will be conducted remotely, many sensor operations will be of a simpler “open or shut,” “higher or lower change,” threshold reached” readings. 


Also, significant amounts of “edge computing” revenue booked by mobile service providers will come from supplying connectivity services and other services such as providing local data center facilities, even for estimates that are perhaps optimistic about the actual role of mobile service providers as suppliers of the actual “edge computing” function. 


Study

Year

Connectivity Revenue (%)

Edge Computing Services (%)

Supporting Functions (%)

Ericsson

2023

40-50

30-40

10-20

ABI Research

2023

35-45

35-45

10-20

Gartner

2023

30-40

40-50

10-20

STL Partners

2023

35-45

30-40

15-25

Omdia

2023

40-50

30-40

10-20


The point is that estimates of revenue to be earned by mobile service providers from MEC are likely overestimated.


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