Serverless and edge disruptors for clouds

The cloud business is very much dominated by Amazon, Microsoft and Google, although there are many more regional, niche or smaller cloud providers. The push towards edge and serverless computing mean many technical changes for cloud services. It can also change the market, and offer opportunities to other players like telcos.

Current cloud architecture is very centralized, although there are regional clouds. Edge computing is bringing processing nearer the users. Serverless (read my earlier article about serverless) make the actual servers invisible to the users and programmers. Together they bring new abstraction layers, and challenges involving how to implement services and software in the cloud.

The main cloud providers have already launched their serverless services AWS Lambda, Google Cloud Functions and Microsoft Azure Functions, but the market is still in the very early phase. Application developers are just learning how to really utilize the serverless model, and the ecosystem still needs additional components, starting from monitoring functions. But we can see that, for example, in fintech services with open APIs and distributed models, the model can be fundamentally disruptive. It is said the model gives developers the freedom to focus purely on usability and the customer experience, without having to worry about capacity and technology infrastructure details.

The edge (read more here) can especially offer benefits with availability, latency, security and bandwidth. With volumes of data increasing all the time and the proliferation of smart devices and AI, it is hard to process everything in central places. But it is not easy to design an optimal Edge architecture. It is not easy to say what is the optimal place to keep and process data, and even for the same data, it can depend on the situation.

Another issue with Edge is that networks (backbone or mobile) are not designed to fully support these kinds of models. An optimal Edge and serverless utilization should also be considered in the network design, regarding bandwidth, storage, and processing capacity on the different layers and nodes. Now cloud and network providers are separate companies, only this fact makes it complex to optimize.

So, we can say that telcos could be in a good position to offer serverless edge supporting cloud services. The challenge is that telcos don’t really have experience and competence in offering these services. Network vendors also offer some solutions to build cloud services. But they don’t have very strong software competence in this area either. AWS, Microsoft and Google have very strong software competence, and the culture required to get new services fast to users. It is hard to compete with this. At the same time, it is said that edge can change the game so significantly that companies like Amazon and Google that are based on very centralized architecture may face difficulty adapting to the change.

First it sounds like telco and mobile networks are an optimal place to implement edge and serverless services. But it is good to realize, that those services can be done without anything new from carriers and the carriers are only dummy data pipes. This means, for example, models that make users' devices part of the processing and data storage, and cloud providers expanding their offering capacity globally.

Blockchain is the wild card in this development. It can change fundamentally how and where data is stored, but also where the processing is done, and even the fundamentals of internet services to more distributed technology and business model. Blockchain as such doesn’t offer database solutions, but enables new ways to store data and handle access to data. Blockchain processing (often called mining in a certain context) also creates its own needs and requirements for processing and networks.

Changes in cloud services offer opportunities for new providers to offer cloud ecosystem services, and to develop new types services in the cloud. The development pace is now very fast and anyone who wants to be successful in this game must really have top level competence and get new services to users constantly. Some companies still struggle to utilize any cloud, whereas advanced companies are already moving to the next phase of cloud technology. This just demonstrates that all companies must work hard all the time to follow the development of the sector, as it becomes harder and harder to compete with obsolete technology.

The article was first published on Telecom Asia.

Read more about Grow VC Group Serverless Developer Trainee program.