Edge computing refers to computing that takes place close to the source of data (i.e. the device that generates the data) by decentralizing data storage and processing. In contrast, cloud computing hinges on centralized data storage and processing. Edge computing generally complements cloud computing and is not likely to replace it. This is because not all information generated by devices needs to be processed in a time-sensitive manner, and therefore can continue to use the cloud for data storage so as to reduce the pressure on the edge data center.
An increase in demand for automation and managing a large amount of web traffic boosts the demand for edge computing
Kentik witnessed a 200%-500% increase in traffic growth of its networks since the early stage of the Covid-19 pandemic.
Cisco’s Webex was able to deal with the spike in video conferencing due to its use of edge data centers.
Fastly’s revenue rose 45.1% year-over-year (YoY) in 2020.
Disruptors launch products that use edge computing to combat the spread of the pandemic
FogHorn launched its “Lightening Health and Safety Suite” in June 2020 to use edge artificial intelligence (AI) to ensure employees adopt necessary safety regulations.
SmartCone Technologies introduced Symp2passTM in September 2020, a biometric-based web process that allows users to check themselves for Covid-19 symptoms.
Most of the disruptors in the edge computing space typically specialize in a specific element of the value chain, while it is common for incumbents to offer both hardware and software for the edge. However, the data center market is dominated by disruptors, as many players specialize in offering hyperlocal to hyperscale data centers in key locations. That said, the software, platforms, and services segment has the highest number of disruptors, led by analytics and Internet of Things (IoT) edge software providers. The segment also includes data center software and edge application software. Meanwhile, the hardware segment comprises on-device hardware components as well as routers, servers, and processors.
Around half of the disruptors and watchlist companies identified in this report are in the early stage, with the remainder fairly evenly split between seed and growth stages.
The main disruptors we identified primarily offer data center related services (commonly colocation centers—where clients’ servers will be hosted and maintained in the data center providers’ facilities), hardware, and software. While disruptors are dispersed across the value chain, they typically focus on one core segment. Data center providers, including Vertiv, vXchnge, and DC Blox, feature among the highest funded disruptors, followed by software and hardware providers.
Vertiv supports the digital transformation of enterprises by providing a wide range of digital infrastructure solutions, including critical power solutions, thermal management, racks and enclosures, and maintenance services. The company was formed in 2016 through a spinoff from Emerson Electric Co (a diversified global manufacturer) and has a global presence with regional hubs in China, India, the Philippines, and Italy.
Vertiv builds a range of customized modular, low-power edge micro data centers for enterprises, including its “SmartMod” and “SmartRow” units. Its offering ranges from 3-kilowatt to 30-kilowatt solutions in terms of power specs, which function as data-center-in-a-box solutions. The data centers include thermal and infrastructure management platforms as well. In November 2020, the company also rolled out a series of smart edge infrastructure solutions for its data centers to assist enterprises in optimizing data center architecture.
It also expanded its data center technology and operations by acquiring Geist in January 2018. Geist looks to enhance data center availability for enterprises through its rack power distribution solutions, which support data center infrastructure in terms of power, cooling, and monitoring. Vertiv also launched the “Vertiv Geist Rack Transfer Switch” (RTS), a suite of transfer switches, in North America in June 2022, to enable users to switch to an alternative power source when the primary source fails or is unavailable. The company went on to launch a self-contained micro data center for edge computing applications named “Vertiv SmartCabinet 2M” in October.
Key customers and partnerships
In March 2021, Vertiv partnered with Green Revolution Cooling (GRC) to launch “Liebert VIC,” (a single-phase cooling system that reduces cooling energy costs by up to 95%) throughout Asia, Australia, and New Zealand. Moreover, Green Mountain, a data center provider focussing on sustainability and efficiency, deployed Vertiv’s Liebert PCW units and UPS systems.
Funding and financials
Vertiv generated over USD 4.4 billion in revenue in 2019 and had a workforce of more than 20,000 employees globally as of November 2020.
Data center software:
On device hardware components:
Leading cloud computing vendors play a critical role in the edge computing market as players such as Microsoft and Amazon offer their services across the value chain, and feature in each of the broad segments. This is in contrast to disruptors, which typically specialize in a given segment.
Most incumbents offer a range of products, including various software and platforms to assist users in adopting edge computing. Notably, IT hardware manufacturers such as Hewlett-Packard Enterprises (HPE) and Dell play a leading role in providing edge servers for the market, while players such as Google offer chips for devices, in essence making them edge devices.
It is common for cloud providers to collaborate with telcos to enhance their offerings. This was seen in leading telcos Verizon and AT&T choosing to form strategic partnerships with Google and Amazon as opposed to competing with them for cloud services. The partnerships are likely to offer synergies by combining the reach of telcos with the software, solutions, and data centers of edge computing incumbents. For instance, Google and AT&T partnered to benefit from Google’s technology (artificial intelligence, machine learning, edge computing, etc.) and AT&T’s network.
In addition to cloud providers, leading tech firms have also invested heavily in the edge computing market and offer a wider range of products. HPE has invested around USD 4 billion in the industry, which also has diversified conglomerates such as General Electric (GE).
Incumbents have used acquisitions as a main means of inorganic growth to enhance their existing offerings. For instance, GE acquired Bit Stew and Wise.io to improve the intelligence and machine learning capabilities of its Predix platform.
No investor data is available