Customer interactions are overwhelmingly digital – and emerging technologies such as the internet of things (IoT), robotics, and virtual reality will only intensify their dependence on data. That is prompting some organisations to rethink the topology of their IT systems, moving data back from the cloud and closer to the customer, in order to reduce latency among other benefits. Experts, therefore, expect edge computing to play a central role in the evolution of the customer experience (CX).
Virtual reality test drives are one of many data-intensive new customer experiences on the horizon. (Photo by Creativa Images/Shutterstock)
Why CX innovation drives computing to the edge
For an ever-growing proportion of organisations, customer interactions are digital first. That means the performance of websites and apps plays an increasing role in the customer experience. A study by Deloitte Digital found that a 100ms improvement in mobile retail website speed translates to an 8.4% increase in customer conversion.
Meanwhile, emerging data-intensive technologies promise new rich and immersive customer experiences. According to a survey by Oracle, 45% of organisations are already using IoT in a CX context, and 37% are using intelligent voice assistants or chatbots. Further on the horizon, robots, autonomous vehicles, and virtual reality all have the potential to transform how businesses interact with their customers.
These innovations only add to the volume of data involved in customer interactions – and their sensitivity to performance issues. "More and more things, and the people that connect to those things, are producing and consuming digital data," explains Tom Bittman, VP at Gartner. "By next year the majority of enterprise data will be produced and processed outside of data centres. This is an important change."
This is prompting companies to rethink the topology of their digital systems, bringing computing power back from the cloud and closer to the customer. "The equation is inevitable," explains Bittman. "The compute moves to the data."
Edge vs cloud computing: latency comparison
Edge computing describes the use of servers located near to the end-user in order to conduct some or all of their data processing needs. These might be in nearby data centres or on company premises. "[Edge computing] will improve latency of transactions, will enable more immediate decisions, and will make it possible to do the analysis faster for data-intensive services," explains Martin Garner, chief analyst at CCS Insights.
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A recent study by researchers at the Stevens Institute of Technology demonstrated the performance benefits of edge computing compared to cloud. They found that for a majority of end-users, websites delivered by Akamai's network of edge servers had a latency improvement of 10 to 100ms compared to public cloud hosting. (Notably, the performance improvement was less marked in Western Europe, which the authors attribute to the high concentration of cloud data centres located there).
And edge computing offers more than just latency improvements, Garner explains. It can improve resilience by reducing dependence on network connections to cloud servers ("a city cannot be allowed to stop because a broadband link has failed," he says), bolster security, and also help companies comply with local data protection regulations.
As a result, adoption is poised for growth. A 2021 survey of more than 300 organisations by open-source software body the Eclipse Foundation found that 38% are implementing edge computing solutions today and 45% plan to do so in the next two years. AI is the most common workload for processing at the edge, respondents said – conducting AI analysis closer to the end-user device allows for more real-time responses.
Telecommunications providers, many of whom have local data centre capacity going spare, have spotted an opportunity: Liberty Global recently spun-off some of its data centre capacity to create a new edge computing provider.
But the industry is nascent and precisely how enterprise organisations will consume edge computing remains to be seen. According to Gartner, hyperscale cloud providers accounted for just 1% of the edge computing platforms in operation in 2020 – but that proportion will grow to 20% in 2023. So while the impetus to bring data closer to the customer may lead organisations to retreat from the cloud, the cloud giants may follow that data to the edge.
However it is delivered, Bitten expects edge computing to play a central role in the creation of new, data-intensive customer experiences. "Edge computing is part of the story of technology adapting to humans," he says.
