Edge data centers deliver compute and storage to the extremes of a network in order to improve the performance, operating cost, and security of applications and services. As such, edge data centers are enabling new, low-latency applications, that do not have the ability to send all of their data back to central markets, at regional and cloud data centers. Instead, data is being processed in real-time, meaning that compute resources need to be close to end users – at the edge.

Edge data centers are smaller, decentralized facilities that provide compute and storage in a location closer to where data is being generated and used, as compared to regional and cloud data centers. These facilities enable new applications by reducing latency and optimizing bandwidth.

Dgtl Infra provides an in-depth overview of edge data centers, including their benefits, types (metro, mobile, aggregation, access), companies (who is building and using them), and the market size, alongside demand drivers. Additionally, we contrast an Edge Data Center vs Regional Data Center and an Edge Data Center vs Cloud, as well as answer the critical question, Does 5G Use Edge Data Centers?

What is an Edge Data Center?

Edge data centers are decentralized facilities, equipped with power and cooling infrastructure, that provide compute and storage in a location closer to where data is being generated and/or used. As such, edge data centers store, process, and analyze data around the end user’s location, as opposed to routing traffic to the nearest major market, to be processed at a regional or cloud data center.

In terms of location, edge data centers are deployed as either standalone facilities or in a number of different environments, such as at telecommunications central offices, cable headends (i.e., local distribution points), the base of cell towers, or on-premises at an enterprise.

To this end, edge data centers are smaller facilities, located closer to end users than regional data centers – which are large facilities in close proximity to urban population centers – and cloud data centers – which are massive, centralized, and remote facilities in areas where land and power are relatively inexpensive. Typically, edge data centers are connected via fiber to the larger regional and cloud data centers.

Why Move Data Centers to the Edge?

There are four main benefits of moving data centers to the edge, which involve improvements to latency, bandwidth, operating costs, and security:

  1. Latency: edge data centers facilitate lower latency, meaning much faster response times. Locating compute and storage functions closer to end users reduces the physical distance that data packets need to traverse, as well as the number of network “hops” involved, which lowers the probability of hitting a transmission path where data flow is impaired
  2. Bandwidth: edge data centers process data locally, reducing the volume of traffic flowing to and from central servers. In turn, greater bandwidth across the user’s broader network becomes available, which improves overall network performance
  3. Operating Cost: because edge data centers reduce the volume of traffic flowing to and from central servers, they inherently reduce the cost of data transmission and routing, which is important for high-bandwidth applications. More specifically, edge data centers lessen the number of necessary high-cost circuits and interconnection hubs leading back to regional or cloud data centers, by moving compute and storage closer to end users
  4. Security: edge data centers enhance security by: i) reducing the amount of sensitive data transmitted, ii) limiting the amount of data stored in any individual location, given their decentralized architecture, and iii) decreasing broader network vulnerabilities, because breaches can be ring-fenced to the portion of the network that they compromise

What are the Types of Edge Data Centers?

There are two major types of edge data centers, namely metro edge facilities, which are located in suburban markets, and mobile edge facilities, which are deployed in C-RAN (cloud-Radio Access Network) hubs and at the base of cell towers. Additionally, within the broader mobile edge definition, facilities located at C-RAN hubs can be referred to as the aggregation edge, while deployments situated at the base of cell towers can be referred to as the access edge.

Metro and Mobile Edge Data Centers – Hub-and-Spoke

Visually, the relationship between metro edge data centers and mobile edge data centers can be depicted through a hub-and-spoke system. In the below example, Jacksonville, Florida acts as the hub or metro edge data center, while five smaller and proximate markets, including Tallahassee, Gainesville, and Palm Coast in Florida, as well as Savannah and Augusta in Georgia, are the spokes or mobile edge data centers.

Metro and Mobile Edge Data Centers Hub-and-Spoke

The hub and spoke architecture of edge data centers can be further defined as follows:

  • Hub: metro edge data centers located in a suburban market (e.g., Jacksonville, Florida) allow customers to access connectivity services from telecommunications carriers, internet service providers (ISPs), and cloud service providers
  • Spoke: mobile edge data centers situated in a smaller, underserved, local market (e.g., Gainesville, Florida) provide colocation services for a customer’s IT infrastructure. These smaller mobile edge data centers, which are deployed at C-RAN hubs and the base of cell towers, connect via fiber to the larger metro edge data centers

READ MORE: Colocation – Definition, Meaning, Data Center, Services

Connection Between Metro and Mobile Edge Data Centers
Connection Between Metro and Mobile Edge Data Centers
Edge Data Centers – Summary by Type

Below are further details on metro edge data centers and mobile edge data centers, which includes both the aggregation edge (C-RAN hubs) and access edge (base of cell towers). Often, what are known as micro edge data centers, are deployed at the base of cell towers to form this access edge.

CriteriaMetro Edge Data CentersMobile Edge Data Centers
LocationSuburban MarketsCell Towers & C-RAN Hubs
Power Capacity5+ megawatts50 to 150+ kilowatts
Area50,000+ square feetHundreds of square feet
Customer Deployments25+ cabinets1/4+ cabinet

Metro Edge Data Centers (Suburban Markets)

Metro edge data centers typically comprise 5+ megawatts of power capacity and 50,000+ square feet, located in suburban (Tier II/III) markets. These data centers serve customer deployments in the range of 250 kilowatts to 3 megawatts of power capacity, which can supply 25 to 100 cabinets.

Metro Edge Data Center Example SBA Communications
SBA Edge – 603 Discovery Drive, West Chicago, Illinois

Metro edge data centers facilitate aggregation, content delivery networks (CDNs), and peering for Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS) companies. For example, cloud service providers and internet companies, including Amazon Web Services (AWS), Google Cloud, Apple, Meta Platforms (Facebook), Netflix, and Salesforce have taken capacity in metro edge data centers.

Geographically, metro edge data centers exist in the suburbs, just outside of large cities. For instance, Cleveland, Ohio; Jacksonville, Florida; Minneapolis, Minnesota; Overland Park, Kansas; Plano, Texas; Salt Lake City, Utah; and St. Louis, Missouri, are all markets where metro edge data centers have been deployed. In these Tier II/III markets, edge data centers can reduce latency to <20 milliseconds, which is important for a number of emerging applications.

Mobile Edge Data Centers (Cell Towers and C-RAN Hubs)

Mobile edge data centers consist of facilities located at C-RAN hubs, which are known as the aggregation edge, while deployments situated at the base of cell towers can be referred to as the access edge. Collectively, mobile edge data centers comprise 50 to 150+ kilowatts of power capacity across hundreds of square feet per site.

Aggregation Edge

The aggregation edge resides at C-RAN (cloud-Radio Access Network) hubs, which serve as an aggregation point for several pieces of radio communications equipment that support cellular networks. C-RAN hubs are located at a distance to multiple cell towers, allowing for the colocation of several baseband units (BBUs) at one facility.

Overall, C-RAN hubs reduce latency and improve performance for applications by shifting compute closer to a wireless carrier’s end users.

Access Edge

The access edge is located at the base of cell towers, often taking the form of container-like, modular structures, known as micro edge data centers (detailed below).

Mobile Edge Data Center Example American Tower

Over 155,000 towers exist in the United States and their exclusive real estate represents a significant new location where thousands of edge data centers can be deployed. While not all of these towers are suitable, SBA Communications, an independent tower company, states that it has 8,000+ tower sites in the United States that could house an edge data center.

READ MORE: SBA Communications – Mobile Edge Computing Update

Deploying edge data centers in close proximity to a cell tower minimizes the physical distance travelled between the final portion of the network and the primary processing functions of an application that is housed in an edge data center on the same property. Furthermore, an edge data center at the base of a cell tower could be less than 10 miles away from the end user.

Mobile Edge Data Center American Tower Jacksonville Beach
American Tower Edge Data Center – 325 17th Avenue North, Jacksonville Beach, Florida

Ultimately, edge computing at the access edge results in the lowest latency and highest performance from the application, to the mobile user’s device – which is particularly important for applications that require proximity.

What is a Micro Edge Data Center?

Micro edge data centers are container-like, modular structures that are prefabricated and then moved to locations that have the requisite real estate, power, and connectivity. While the base of cell towers are a major location where micro edge data centers are deployed, these facilities can also be placed at office buildings, retailers, stadiums/arenas, universities, parking lots, and the intersection of major fiber routes.

In terms of form factor, micro edge data centers are built to different size, power capacity, and cooling specifications. Still, the components of these micro edge data centers remain similar to larger facilities, including power distribution unit (PDU) and uninterruptible power supply (UPS) systems.

Example – EdgePod by EdgePresence

Below is an illustration of EdgePresence’s micro edge data center, known as an EdgePod, which supports 100 kilowatts (kW) of power availability and is 360 square feet in size, with dimensions of 30 feet in length and 12 feet in height. Typically, the facility’s fit-out includes 8 usable cabinets, made-up of 20 quarter-cabinet lockers (i.e., 5 full cabinets worth of space) and 3 full cabinets.

EdgePod by EdgePresence Illustration
Click here for a larger version of this image.

While EdgePresence’s micro edge data centers can support power densities of 15+ kW per cabinet, the company notes that its average customer usage is 3 kW per cabinet. As a reference point, a typical enterprise data center realizes average power densities of 6 to 12 kW per cabinet. Eventually, power density could become more important for micro edge data centers given that space is scarce and expensive, at pricing of $300+ per kW per month.

To build, deliver, and install one of EdgePresence’s micro edge data centers, total costs range from $500,000 to $1+ million, depending on the size of the facility.

READ MORE: How Much Does it Cost to Build a Data Center?

For more details on the technical specifications of EdgePresence’s micro edge data center, check-out the company’s walkthrough tour in the video below:

Edge Data Center Companies

Edge data center companies referenced below include those building and using edge data centers:

Who is Building Edge Data Centers?

Large data center operators including Equinix, Digital Realty, CoreSite, and Cyxtera operate in urban (Tier I) interconnection markets. By definition, these facilities are located outside of the metro edge, in suburban (Tier II/III) markets, and the mobile edge at C-RAN hubs and the base of cell towers.

However, these large data center operators market their “edge” capabilities on the premise of reaching large populations rapidly. For example, Equinix states that 80% of the population of North America, Western Europe, and most Asia-Pacific metros, are within a 10 millisecond round trip of its data centers. While CoreSite’s United States portfolio of data centers covers 75% of U.S. businesses with latency of 5 milliseconds or less.

More importantly, the companies actually building edge data centers, including metro edge and mobile edge facilities, include the following operators:

  • Metro Edge: AtlasEdge, Cologix, Compass Datacenters, DartPoints, DataBank, EdgeConneX, Evoque, Flexential, Leading Edge Data Centres, T5 Data Centers, TierPoint
  • Mobile Edge (Micro Edge Data Centers): EdgePresence, Vapor IO

As a point of comparison, metro edge data center provider DataBank estimates its latency to be 3 to 5 milliseconds, within a 10-mile radius of its data centers.

Who is Using Edge Data Centers?

Edge data center customers vary by type and purpose, including the following groups and customers:

  • Wireless Carriers: Verizon, AT&T, T-Mobile, and DISH Network are using edge data centers as Open RAN (O-RAN) and virtualized RAN (vRAN) gain importance with 5G
  • Cloud Service Providers (CSPs): Amazon Web Services (AWS), Microsoft Azure, and Google Cloud are deploying edge cloud services (see below)
  • Internet Companies: Apple, Meta Platforms (Facebook), Netflix, Salesforce
  • Content Delivery Networks (CDNs): Akamai, Cloudflare, Fastly, Edgio (formerly Limelight Networks) are deploying in multiple sites for applications such as video caching
  • Connectivity Providers: Zayo, Lumen Technologies, Cogent Communications, Megaport
  • Bare Metal Providers: VMware, Rackspace
  • Enterprises: lack on-premises IT infrastructure and/or prefer to access a third-party edge data center in close proximity
Edge Cloud Services

The cloud service providers, including Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, are all utilizing edge data centers to deploy their edge cloud services, including:

  • Amazon Web Services (AWS): AWS Local Zones (places compute, storage, and database close to large population and industry centers) and AWS Wavelength (compute and storage services at wireless carrier facilities for 5G networks)
  • Microsoft Azure: Azure Edge Zones (edge data centers) and Azure Private Multi-Access Edge Compute (customers build their own private Azure data center)
  • Google Cloud: Global Mobile Edge Cloud (GMEC) is a portfolio and marketplace of 5G edge computing solutions built jointly with wireless carriers

READ MORE: Top 10 Cloud Service Providers Globally in 2022

Edge Data Center Market Size

While the edge data center market size is unquestionably growing, a number of market participants have attempted to quantify this growth through their total addressable market (TAM) estimations.

American Tower, as part of its $10.4 billion acquisition of CoreSite, estimated that, by 2026, edge data centers will have a TAM of ~$3 billion in revenue, from space and power solutions. More specifically, this is comprised of the mobile edge, with a TAM of ~$1 billion in revenue and the metro edge, with a TAM of ~$2 billion in revenue.

READ MORE: American Tower Buys CoreSite in $10bn Neutral Host Push

Additionally, PwC (PricewaterhouseCoopers) expects the broader global market for edge data centers to grow to $13.5 billion in 2024, from $4 billion in 2017. At the same time, Technavio, a research firm, estimates that the global edge data center market (including components) will grow by $8.7 billion between 2020 and 2025, implying a compound annual growth rate (CAGR) of 16.7%.

Finally, Tolaga Research forecasts that, by 2028, there will be over 1.6 million servers residing in edge data centers around the world. By this time, edge servers will support 10% of cloud workloads globally, which is an increase from just over 1% at present.

Drivers of Edge Data Center Demand

Bringing content, and the servers that the content resides on, closer to end users has driven demand for edge data center space. To-date, short form video applications (e.g., TikTok), video streaming services (e.g., Netflix), audio streaming (e.g., Spotify), and ridesharing (e.g., Uber) have all driven a need for more edge data centers.

Over the next 5 years, low-latency applications including artificial intelligence (AI), Internet of Things (IoT) applications, augmented reality (AR), virtual reality (VR), telemedicine, real-time analytics, autonomous vehicles, video/live streaming, and network functions virtualization (NFV) for 5G, will all drive a greater need for edge data centers.

Edge Data Center Architecture

Presently, to deliver applications, all of the required computing is performed in centralized regional or cloud data centers and then data is transmitted back, via high-bandwidth connections, to end users. Alternatively, edge data centers offer a decentralized solution, while being physically smaller and consuming less power than regional and cloud data centers.

Cloud Regional Edge Data Center Architecture
MO = Metropolitan Office, CO = Central Office

Edge Data Center vs Regional Data Center

Edge data centers are located closer to where data is being generated and/or used, such as only 10 to 50 miles away from the end user. In contrast, regional data centers are located in larger urban areas and service a more sizeable geographic region, meaning that they are often located 100 to 200+ miles away from the end user. Therefore, edge data centers are better suited to serving applications with low-latency requirements, while regional data centers can handle less performance-sensitive functions such as storage and analysis.

Edge Data Center vs Cloud

Cloud data centers are massive in scale and located outside of urban areas, where land and power are relatively inexpensive. Specifically, cloud data centers are often hundreds or thousands of miles away from the end user, increasing latency to where the data is ultimately delivered. As such, edge data centers can appropriately serve applications with low-latency requirements, while cloud data centers can more optimally enable use cases like web & mobile applications, website hosting, and e-commerce.

Does 5G Use Edge Data Centers?

In the present 5G environment, more data and processing requirements are moving closer to the network edge, as wireless carriers are attempting to enable low-latency applications. Thus, 5G is a driving force for edge data centers, which are located physically closer to end user devices that are both generating and utilizing data.

One of the key drivers for edge data center deployments is reducing latency, which is the amount of time it takes for a user to retrieve data from a source.

As shown below, in a 4G / LTE network, average latency ranges between 50 to 100 milliseconds (ms), comprised of core / cloud, transport, and air interface latency. Whereas in a 5G network, latency can be reduced to a total of 10 milliseconds (ms), with only 2 to 3 milliseconds of latency excluding transport. Decreasing transport latency requires moving the core compute and cloud interface closer to the edge, and, in turn, end user.

Edge Data Centers – 4G / LTE and 5G Networks
Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing. Mary has over 5 years of experience in research and writing for Data Centers.

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