How to monetize MEC: ‘There is no easy button’

Turning MEC investments into business outcomes is an exercise in ecosystem development and solution integration 

There’s an animating tension as it relates to service provider monetization of mobile edge computing (MEC) for enterprises. Businesses want to buy solutions that are easy to use, where the complexity is essentially hidden. But hiding complexity is difficult, particularly in the context of building new infrastructure, connecting it to a network, working with partners to build impactful applications, packaging it as a solution, then mustering the sales know-how to reach deep into a variety of verticals that all have different needs. 

Hanging over all of this is the descriptor of carrier as a “dumb pipe.” To fully capitalize on 5G and MEC, carriers can’t repeat what happened with LTE where third-parties who didn’t spend a cent on building the network were able to monetize the services that ride on top of it. 

MEC can help keep 5G from being an LTE redux

“When you look at CSPs,” VoltDB Chief Product Officer Dheeraj Remella said in an interview, “all they can do unless they invest in industry verticals is they can provide connectivity and connectivity as a service. How far down the line they can bring that connectivity is the edge equation…CSPs don’t do it themselves. They’ll partner. If they don’t do that, they’re basically looking at network slicing as the answer to everything.” 

Inseego’s Amit Marathe, director of AI/ML, rightly points out that buyers want to buy outcomes. “They like to see the technology for sure…but it all pivots back to what’s the business outcome, what insights can I drive out of this, what can my customers get out of this and at what cost?” His colleague Yogesh Rami, product marketing principal, Cloud Services, tied it all back to “what’s the TCO for me if I do this for two years, three years, five years? And they also want to know what’s the ROI? It’s up to companies like us to show what the TCO and ROI can be if you invest into a 5G infrastructure.” 

For telcos, “There’s not an easy button,” Dell Technologies Douglas Lieberman, senior director if Global Solutions Co-creation Services said. That calls for a robust ecosystem play involving carriers, hyperscalers, consultancies, system integrators, independent software vendors, enterprises and others. “Ultimately we want to build that ecosystem.” 

Regarding MEC-based services, “The math comes down to shared risk and capex vs. opex and who’s responsible for maintaining it and running it. The reason why anyone moves to a cloud model is beyond just that it’s cheaper. You’re buying a risk model. Ultimately they make sure it’s running and they do software updates and patch updates. On my books, I can pay opex, not capex. It also enables, from an enterprise perspective, elasticity. We all know…there’s a financial model somewhere that accounts for elasticity.” 

Lieberman gave the example of factory automation: 100 devices with defined service level parameters could cost $100 per month all in. “That substantially changes the business model and the execution for the enterprise. This is why the telcos need to do more than say, ‘Here’s connectivity, here’s a SIM card.’”

The edge “will evolve to provide value for telcos”

He continued: “I truly believe that MEC is something that will evolve to provide value for the telcos. The takeaway is, there’s no easy button. We’re not going to walk out tomorrow and it’s just gonna be there. That ecosystem is going to be critical. That is going to be as much of a battle as the technology is.” 

To read more about how mobile edge computing is creating new revenue opportunities for smart manufacturing and other areas, read the report, “Monetizing MEC: What’s the value in the edge?” And check out the companion webinar featuring speakers from Google Cloud, Inseego and VoltDB. 

To read more about how mobile edge computing is creating new revenue opportunities for smart manufacturing and other areas, read the report, “Monetizing MEC: What’s the value in the edge?” And check out the companion webinar featuring speakers from Google Cloud, Inseego and VoltDB.