Will the Edge Beat the Cloud?

PORTLAND OR – The Edge is changing before our eyes – in location, architecture and technology. So CapRE makes it a priority to understand where, how and why the Edge is headed to its next stop at most of our conferences. At our Second Annual Portland Data Center Summit last week, we convened a panel of regional insiders for a discussion titled Life on The Edge: The Advent of 5G, Micro Data Centers & Evolution of the Next Generation: Will the Edge “Eat” the Cloud? Below, we highlight some remarks offered by Nikesh Kalra, of the Emerging Services Group at Equinix.

Nikesh, what kind of strategies do you see your customer employing and how do you help them deploy that?” asked Moderator Bruce Myatt, Founder of the Critical Facilities Roundtable.

“The question is, what services will I build, either within my own facilities, that will allow those applications to go one layer up, from the more centralized clouds, or potentially even outside my facility?” replied Kalra. “In terms of how we think about the world, certainly my team at Equinix is not constrained by what Equinix has, but what the world could look like or Equinix could be beyond that.”

Kalra thinks that to date, what he has asked those companies to do is bring infrastructure into Equinix or ask his partners, like the large Cloud service providers, to extend their reach into other metros that his firm might be active in. “And that actually works,” he shared. “We have a product called Cloud Exchange that’s in 20-odd metros that we are in and that allows for low-latency access back into those cloud providers.”

“But we still require to be somehow connected physically into our facility, either through a carrier partner or through physical colocation inside our facility,” continued Kalra. “So what could you do if you extend that one layer out? We bought a product a couple of months ago called Smart Key. This is one example – it’s a referential example of how a customer can get a better security experience as I want to move more things closer to the user. But I’m consuming it on demand. It’s a Software as a Service.”

data center summitSmart Key is Equinix’s first Software as a Service business and Kalra expects Equinix to add a variety of different products in this area. “If you think about what hyperscalers have, they have two significant digits in the number of facilities they have – 10s, 20, 30s,” he shared. “We have three. We have three digits. CDNs have 4 digits. Telcos have 5 digitis. Wireless carriers have 6 digits. You can keep going until you get to billions of IoT devices. But which of those layers did you actually need to add your application in? What you’ll find is that over time there will be a natural segmentation.”

“Some applications will go here, some applications will go somewhere else,” he continued. “There will be cost and performance and security considerations that decide those. The problem is that there is still this big gap that says the class of compute and service availability that’s available via Amazon and Microsoft, you can’t get that anywhere else. Because it’s a highly fragmented space. So I think that the opportunity certainly for Equinix is to apply more Cloud-like services in more end-points, or more locations, to allow that ease of consumption and proximity to the end-user. That’s where we’re at, at the moment.”

Nikesh Kalra, Emerging Services Group, Equinix

Next, Kalra offered a response to the central question of the discussion — Will Edge beat the Cloud? “To me, no. They will co-exist with each other,” he replied, flatly. “We are almost in. state of perpetual transition. The Cloud looks like it became a multi-billion dollar business overnight. But that’s just one company. It was actually a ten-year, slow transition. So if you look at what the next ten years looks like, many, many parts will co-exist and many of these tiers will co-exist. There will be an expanding pie and we’ll get lots of variations of what the Edge actually is.”

For more from Kalra, check out a previous CapRE Insider Report covering his earlier remarks: Equinix’s Nikesh Kalra: Life on the Edge is a Race Between Applications and Infrastructure