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IaaS Providers Must Develop a Clear Edge Value Proposition by Extending Infrastructure That Supports Digital Touchpoint Solutions

by Rene Buest  |  July 26, 2019  |  Submit a Comment

While executing digital business initiatives, 67% of enterprises aim to digitize their products and services. In doing so, 60% support these initiatives by driving Internet of Things (IoT) integration projects. Hence, enterprises are increasingly moving toward the edge to serve customers at digital touchpoints. However, they find it difficult to connect the physical and digital world, so turn to suppliers for expertise and solutions to bridge the centralized cloud and edge computing environments. This creates a large revenue opportunity for tech CEOs and product managers of IaaS providers.

By 2023, 40% of global infrastructure as a service revenue will come from edge-related services, up from less than 10% today.

Yet IaaS providers still miss out on significant incremental business opportunities by not addressing the full scope of enterprise customers’ digital business initiatives, particularly at the edge. Connecting the physical world with the digital world at the edge is a driving factor helping enterprises improve their customer experience through digital touchpoints. However, it is highly dependent on the availability of relevant connectivity based on edge components from infrastructure service providers.

Edge Services Provide Proximity to Digital Touchpoint Solutions

Digital business initiatives mandate that enterprises interact closely and in real time with their customers to help reduce cost and customer effort, as well as improve customer experience. To support these initiatives, tech CEOs and product managers of IaaS providers must help their clients create business moments for their clients’ customers at the digital touchpoint. This is the new scalable way to deliver improved customer engagement. In doing so, tech CEOs and product managers must enable clients to establish a presence at the digital touchpoint by providing proximity, enabling services and business-outcome-driven solutions. Among others, this allows tech CEOs and product managers new revenue opportunities, differentiation and creation of client stickiness.

Despite the need for robust edge and near-edge capabilities and for diverse edge solutions, centralized infrastructure (for example, cloud) still plays an important role in most IoT markets. It remains vital in consumer and commercial IoT for provisioning, managing and updating software and services on edge and near-edge devices. Additionally, it plays a key role in coordinating operations across highly distributed edge devices, and in aggregating and archiving data from the edge or intermediate gateways and servers. Centralized infrastructure also allows provision of significantly more robust and scalable machine learning and sophisticated processing capabilities, and links to traditional back-office processing. In the case of industrial IoT, which is not a cloud-first environment, on-premises solutions dominate. In this case, the combination of on-site data centers (including private cloud) and edge is the likely chosen solution.

To support digital business initiatives tech CEOs and product managers of IaaS providers must proactively

  • Provide clients with proximity for digital touchpoint solutions to the customers of connected products
  • Provide clients that wish to implement digital touchpoint solutions with enabling technology to support edge services and solutions
  • Extend their own infrastructure environments to deploy edge computing solutions in a quick-and-easy-to-deploy, reliable and scalable way

Tech CEOs and product managers should exploit third-party, edge-related components and services, while expanding their own infrastructure to the edge. This is imperative to provide clients with edge solutions for their digital business platforms, which enables them to build and provide digital touchpoint solutions to serve their customers. Tech CEOs and product managers of IaaS providers must understand how best to adapt their solution offerings to take advantage of this new business opportunity. In our research we provide essential insight into how tech CEOs and product managers of IaaS providers can utilize edge-based solutions to open new revenue streams.

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Category: product-life-cycle-management  product-strategy-and-launch-for-tech-ceos  

Rene Buest
Research Director
1 years at Gartner
20 years IT Industry

Rene Buest is a Senior Director, Analyst in Gartner's Tech CEO Research and Advisory team. Primary research coverage is infrastructure services and digital operations as well as managed services and intelligent automation. Read Full Bio




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