Towards the edge cloud: A boon to ASEAN’s vertical industries

We are living through an age of rapid digital transformation. Many of the technological capabilities that enhance life today would have been difficult to imagine just five ago. In the first 30 years of the internet, applications primarily focused on automating content sharing between the cloud and end users. Now, we are entering the next era of digital innovation, which includes automating physical and human tasks.

Cloud-native applications have emerged in many industries, including manufacturing, retail, automotive, and entertainment. However, changes in how people and businesses use applications entail changes to the underlying technology infrastructure, from centralised cloud-based workloads, to platforms that distribute these workloads to meet the requirements of a seamless user experience. These include latency, data sovereignty, or operational demands from cloud compute to IoT applications, where vast amounts of data are generated at the edge and don’t need to be sent to a centralised cloud.

These kinds of applications are compute intensive and delay sensitive, and traditional centralised cloud architectures do not meet the latency requirements that next-generation applications require. They need a more adaptive and distributed cloud model, with compute and storage cloud resources physically close by, at the edge of the network, as this is where content is created and consumed. This approach is referred to as edge cloud.

The edge cloud is set to disrupt major industries and is already impacting several verticals today, like the retail and manufacturing sectors, among others. As rapid digitalisation now reshapes Southeast Asia, this technology will offer a whole new set of opportunities in building a digital future.

Enhancing the retail industry

Edge cloud technology is already enabling the next generation of retail. In the ASEAN region, smart shelves, self-help kiosks, and automated checkout systems are popping up in big retail and grocery stores. Unmanned convenience stores from start-ups like Singapore’s Pick&Go and Octobox also mark a significant change for the retail industry, and we will likely see this model replicated by other brands in the coming years.

These new technologies — be it RFID to track items taken, AI to track shopper movements, or even analytics to track shopping habits to optimise product displays and inventory — can move the needle on the customer experience. But to achieve this, a large amount of instant data transfer is required between the store and the cloud: near-petabytes of data transfer on a daily basis.

It’s the edge cloud that enables this. According to GlobalData, the overall market for edge will grow to US$17.8 billion by 2025, and Asia will account for 26.4% of spending. The edge cloud can serve as the foundation for ASEAN retailers to build new experiences, and as this technology becomes more widely adopted, more use cases will arise in the retail industry.

Industry 4.0

In the world of manufacturing and supply chain logistics, edge computing is also playing a pivotal role in the next wave of digitisation. Industry 4.0 presents a great opportunity for ASEAN to capture a larger share of global manufacturing activity. The region is expected to reap productivity gains of up to US$627 billion by 2025, according to McKinsey.

ASEAN is home to several manufacturing-based economies like Indonesia, Thailand, and Vietnam, and efforts are underway from enterprises and governments to build smart factories, introduce new technologies, and digitise operations. These are set to become more commonplace, especially as 5G becomes more readily available in the region.

Connected devices, AI, digital twins, automation, and 3D printing are just some of the many innovations manufacturers can take advantage of when Industry 4.0 is fully realised, but again, processing power at the network edge will be the key to making this a possibility.

Reliable edge cloud architecture

To allow these applications to run seamlessly, the network of edge clouds must be constructed in a way that provides flexibility and affordability in the long run. Networks need to be able to adapt, respond, and adjust resources to meet the demands of the application layer, ensuring they can manage, secure, and automate the network from end to end.

If we create a more programmable infrastructure that can evolve as needed, the way we shop in the future could become a blend of contact free and in-store shopping. Edge cloud technology, combined with 5G, will help create a resilient, faster, and more immersive experience.

Intelligent, data-driven automation can provide the necessary bird’s-eye view to optimise utilisation of network and cloud resources, while satisfying the demand for dynamic applications at the edge. Unlike the centralised cloud that delivers to many customers, each edge application is specific to a much smaller subset of local users, and must be dynamic enough to automatically respond to their needs in an environment with limited resources.

What’s more, these data centres must maintain ultra-low latency and ensure that cloud resources are positioned appropriately to meet the performance metrics of end-user applications. Intelligent, closed-loop automation can dynamically identify cloud resources in an alternative data centre and route them to another path if the existing one does not meet the demands of the edge application.

The ASEAN digital economy is expected to add over US$1 trillion to regional GDP in the next 10 years, and edge cloud technology has the potential to bring smart technology to nearly every sector, especially in such a geographically diverse region where the edge is critical to scaling digitalisation. But for the model to reach its full potential, new networking requirements at the edge data centre must be addressed.