Via Satellite illustration.
This is the second of a two-part series analyzing the value of edge computing in space by the Boston Consulting Group. Read Part One:Size of the Prize: How Will Edge Computing in Space Drive Value Creation?
What key drivers are necessary to ensure that edge computing in space is widely adopted to the degree that it reaches an inflection point of affordability? We at the Boston Consulting Group believe that cybersecurity, cost, and ESG will drive the market for edge computing in space.
Cybersecurity is an area in which edge computing offers distinct advantages. Cloud computing is vulnerable to the ever-increasing risk of cybersecurity breaches, which can lead to major data theft or loss. Organizations across industries that collect personally identifiable information on a public cloud expose themselves to liability and/or compliance concerns, while sensitive intellectual property and proprietary industry data can become vulnerable to cybersecurity attacks at various nodes of transmission particularly given growing dependency on cloud computing.
The main challenge presented by the current cloud computing landscape is that corporate services and data are entrusted to third parties and are exposed to a higher level of risk, both in terms of security and privacy. The top three threats to cloud systems are unsafe API interfaces, data loss or theft, and hardware failure. The widespread use of virtualization in the implementation of cloud infrastructure also creates security problems because it alters the relationship between operating systems and underlying hardware, introducing an additional level that must be managed and protected.
In contrast, edge computing introduces multiple advantages for cybersecurity since data is processed locally. This eliminates risks stemming from data transfers, which are typically encrypted and inevitable when using typical terrestrial cloud solutions. With edge computing, complex calculations occur at the IoT device/perimeter server level and the only transfer is that of the final result to the user. The risk of data loss is driven more by damage to local servers, rather than cybersecurity vulnerabilities.
[Hear more: Sita Sonty talks with N2K Space about edge computing in the T-Minus Space Daily podcast]
Cost also presents an area of advantage to edge computing. Organizations could achieve operational cost savings by using edge computing due to the minimal need to move data to the cloud. Since data is processed at the same location where it is generated (in this case, on the satellites themselves, collecting imagery through hyperspectral or SAR capability or remote sensing data), processing these batches of data on the same satellite would also yield a significant reduction in the bandwidth needed to handle the data load.
Hosting applications and data on centralized hosting platforms or centers creates latency when users try to use them over the internet. Large physical distances coupled with network congestion or outages can delay data movement across the network. This then delays any analytics and decision-making processes.
Edge computing in space, in this context, could enable data to be accessed and processed with little or no obstacles, even when there is poor internet connectivity. Importantly, if there is failure with one edge device, it will not destroy the operation of the other edge devices in the ecosystem, facilitating a reliable, connected system.
Finally, there are potential gains to be achieved in terms of ESG metrics by adopting in-space edge computing capability. With the cloud business model dominating, there are emerging concerns about the environmental effects of centralized processing. Processing centers require enormous resources to function; they contribute to carbon emissions, accounting for0.6% of all greenhouse gas emissions, and produce electronic waste, adding to the burden humans put on the environment in pursuit of advancement.
Edge computing has become a potential alternative to moving data centers to greener practices. The edge helps reduce the networking traffic coming in and out of centralized servers, reducing bandwidth and energy drains. This frees up bandwidth at the data center itself and bandwidth for the organization, overall, in terms of any centralized servers on-premises. Moving edge computing to space would achieve even further reductions in energy consumption required at the terrestrial data center level, while the needs for temperature control and cooling would be eliminated by the freezing temperatures in LEO.
In order to estimate an overall market for edge computing in space and explain why in-space edge computing capability and associated user interface applications need to be built, we triangulated three approaches to the market: Supply, Demand, and Cost.
Today, roughly 20% of data processing and analysis occurs locally, with 80% happening in centralized data centers and computing facilities.
We developed ahigh, low, and base casefor estimating the share of industry addressable by space solutions, and as a core assumption of the model, we used reliance on cybersecurity to gauge what share of industry would be addressable by space. With this model, we expectan estimated $250 million market by 2030with defense and satcom as leading industries for application. However, it is important to note that the estimated $250 million market is addressed by only one segment of the total scope available as one looks at the Edge Computing in Space Capability Stack (Figure 2).
Figure 2: The capability stack for edge computing in space demonstrates the breadth of functions which could be enabled and supported for different end users. Source: BCG analysis.
Further upside would emerge as addressable market opportunity for connectivity service providers (satcom/telecom), applications developers (who would be responsible for developing the apps for the specific government customer to interpret processed information, for example); terminals/user interface manufacturers; and the residual flow down to data centers for cloud computing purposes. Other segments of Edge Computing in Space Capability Stack would see further value unlocked as Edge in Space comes online, delivers key capabilities to the highest need customer groups (e.g., those in defense), and brings the cost curve down for commercial use cases and applications to emerge.
By estimating demand for cloud computing across target industries, supply for satellite revenue in the aggregate space market, and comparing the cost of terrestrial and space data storage centers, we believe that there is more demand for cloud computing in space than the supply of satcom providers.
Our model indicates that the cost to host data in space will closely approach terrestrial data costs past 2030, while on supply and demand, we anticipate more demand for cloud computing space than supply of satcom providers.
In light of these differentiating factors and our model research, demand for edge computing is established and expected to grow (Figure 3). We project all of Satellite IoT spending, $1.5 billion by 2030, to be addressable given the importance of cybersecurity. We estimate the relevant edge computing market (excluding hardware and non-core service software) to be $0.3 billion by 2030, of which 75% would be in-scope. Finally, we estimate up to 2% of the total $1.2 billion cloud compute market by 2030 to be in-scope due to the selective applicability of cybersecurity and latency needs for real-time analysis.
Figure 3: Demand Model Methodology and Driver Tree
However, research indicates that supply is currently lagging behind expected need due to insufficient public and private investment, with key implications for government and private investors.
The key drivers to understanding which companies will unlock the potential of edge computing in space include prioritizing cybersecurity, lowering cost burden, and adopting ESG practices. With increasing digitalization, the space economy will further benefit from integrating edge computing into space-based business models. However, companies and governments must help develop the needed supply that our current space investment demands.
While cloud computing will remain an integral part of the overall market for the foreseeable future, the advantages offered by edge computing in space are clear enough that actors in the most promising markets of defense and agriculture should be considering the questions posed earlier. For government, how can they leverage this technology to enhance the security of critical assets and information? How should government invest in developing the market for space-based edge computing, and how can they effectively support its growth? What role will incentives play will they be tied to ESG targets?
For industry, there are questions around how to sell to target customers in key markets such as government and agriculture. Are the start-up and non-recurring engineering costs prohibitive and what investments and partnerships will be required? What scenarios exist for the development of requisite ground infrastructure?
Go to market success will require integrating the edge computing in space-as-a-service capability into a suite of other services that could already be on offer. In addition, as commercial space stations look to develop edge computing in space offerings, successful methods will integrate this capability among others in orbit, such as where and how remote sensors collect the data, where and how the data analytics are performed, and potentially offering various data streams to the same group(s) of customers utilizing the same sensors to optimize quality and quantity of output.
The space industry is no stranger to partnering closely with suppliers and customers, including governments, to develop and deliver new technology and advance the art of the possible. By making the right investments, governments, investors, and users in edge computing can turn democratizing space from an expression into a reality.
This paper is the second two-part series analyzing the value of edge computing in space by the Boston Consulting Group. Read Part One:Size of the Prize: How Will Edge Computing in Space Drive Value Creation?
S. Sita Sonty leads Boston Consulting Groups Commercial Space team. John Wenstrup is a senior leader in BCGs Technology, Media & Telecommunications practice. Cameron Scott is Global Sector Lead for Defense and Security. AndDr. Hillary Child is a Project Leader from BCGs Chicago office.
Additional research by Avril Prakash, Sarvani Yellayi, Ansh Prasad, and John Kim
Originally posted here:
Size of the Prize: Assessing the Market for Edge Computing in Space - Via Satellite
- Cloud computing and blue-sky thinking: An atmospheric scientist ... - Purdue University - May 25th, 2023 [May 25th, 2023]
- Singapore on track to reach cloud migration goals asks suppliers to re-apply - The Register - May 25th, 2023 [May 25th, 2023]
- Ampere Computing launches its custom chips aimed at cloud ... - Reuters - May 25th, 2023 [May 25th, 2023]
- Red Hat Summit's first day reveals key themes for the future of cloud ... - SiliconANGLE News - May 25th, 2023 [May 25th, 2023]
- Cloud Computing: Quality and Cataloging are Top Challenges ... - Formtek Blog - May 25th, 2023 [May 25th, 2023]
- Evolution of Cloud Security | Looking At Cloud Posture Management ... - SentinelOne - May 25th, 2023 [May 25th, 2023]
- Integrating Network Function Virtualization with the DevOps Pipeline ... - Open Source For You - May 25th, 2023 [May 25th, 2023]
- Global Cloud Computing in Banking Market Intelligence Report ... - Business Wire - May 25th, 2023 [May 25th, 2023]
- DaaS In Cloud Computing: Benefits And Risks - Dataconomy - May 25th, 2023 [May 25th, 2023]
- BASF strengthens R&D with more powerful supercomputer - BASF - May 25th, 2023 [May 25th, 2023]
- Alibaba approves cloud computing unit spin-off, prepares for grocery and logistics arms to go public - Yahoo Finance - May 25th, 2023 [May 25th, 2023]
- Public cloud contribution to UAE could reach $181bn by 2033 - Trade Arabia - May 25th, 2023 [May 25th, 2023]
- Women at Suncorp skill up with cloud training program - IT Brief Australia - May 25th, 2023 [May 25th, 2023]
- Oracle almost missed the bus on cloud. Can a late charge help it catch up with AWS, Azure, et al.? - Economic Times - May 25th, 2023 [May 25th, 2023]
- Global Edge Computing Technology Market Report 2023: Increasing Usage of 5G Network to Deliver Instant Communication Experiences Presents... - May 25th, 2023 [May 25th, 2023]
- Redington, Google Cloud partner to drive cloud transformation in ... - ITP.net - May 25th, 2023 [May 25th, 2023]
- Dow futures slip as Fitch places United States' AAA rating on negative watch: Live updates - CNBC - May 25th, 2023 [May 25th, 2023]
- Clore.ai Introduces Secure Cloud: Unprecedented Affordability and ... - Digital Journal - May 25th, 2023 [May 25th, 2023]
- Edge Computing Impact: What Does It Do? - Dataconomy - May 25th, 2023 [May 25th, 2023]
- Cloud Data Warehousing: Unleashing the Power of Azure and AWS - Experts Exchange - May 12th, 2023 [May 12th, 2023]
- Edge computing: 4 things to keep on your radar as your business cuts the edge - Times of India - May 12th, 2023 [May 12th, 2023]
- Managed IT Services in Raleigh: The 10 Biggest Cloud Migration ... - Digital Journal - May 12th, 2023 [May 12th, 2023]
- Oracle Teams with Wyndham to Bring OPERA Cloud to 2,000 ... - PR Newswire - May 12th, 2023 [May 12th, 2023]
- Microsoft Tops Cloud Computing Expectations; Alphabet Ad ... - Investopedia - May 2nd, 2023 [May 2nd, 2023]
- Worldwide public cloud end-user spent to hit $597.3bn in 2023 - Trade Arabia - May 2nd, 2023 [May 2nd, 2023]
- Cloud computing and security critical for business strategy in 2023 - Daily Host News - May 2nd, 2023 [May 2nd, 2023]
- Google Cloud partners with Polygon Labs, adding yet again to its growing roster of Web3 firms - Fortune - May 2nd, 2023 [May 2nd, 2023]
- Wireless sensor network project has history of success at SCSU St ... - St. Cloud State University - May 2nd, 2023 [May 2nd, 2023]
- Google Cloud posts first-ever operating profit despite slowing growth - CIO - May 2nd, 2023 [May 2nd, 2023]
- Mastering the Art of SOC Analysis Part 2 | Top Areas for Aspiring ... - SentinelOne - May 2nd, 2023 [May 2nd, 2023]
- Google Cloud boss Kurian's rocky path to profit: 'We were not in a very good situation' - CNBC - May 2nd, 2023 [May 2nd, 2023]
- Teradata Corp.: Leveraging Cloud Computing to Tackle Complex ... - Best Stocks - May 2nd, 2023 [May 2nd, 2023]
- NUSO Becomes a Cloud Peering Partner for Zoom Phone on ... - The Fast Mode - May 2nd, 2023 [May 2nd, 2023]
- Cloud-Based Quantum Computing Market worth $4,063 million by 2028 - Exclusive Report by MarketsandMarkets - Benzinga - May 2nd, 2023 [May 2nd, 2023]
- New cloud computing capabilities for streaming video - The Tech Panda - May 2nd, 2023 [May 2nd, 2023]
- LITEON Technology Reports Q1 2023 Sales of NT$34.2B - SMT 007 - May 2nd, 2023 [May 2nd, 2023]
- Microsoft Dominates in Cloud Computing Market - The Packet - May 2nd, 2023 [May 2nd, 2023]
- Why Modern BSS Is Crucial in Driving Operator CX and B2B ... - The Fast Mode - May 2nd, 2023 [May 2nd, 2023]
- Akamai Gets Richmond for Internal Promotion - Australia Cyber Security Magazine - May 2nd, 2023 [May 2nd, 2023]
- How to Reduce Risk in Cloud Computing - ITPro Today - April 11th, 2023 [April 11th, 2023]
- Alibaba To Enter The Chatbot Arena - Yahoo Finance - April 11th, 2023 [April 11th, 2023]
- New data shows digital skills are more needed than everAWS has 600+ free cloud courses that can help - About Amazon - April 11th, 2023 [April 11th, 2023]
- U.K.'s Cloud Computing Probe Could Push This Bearish ETF Higher - ETF Trends - April 11th, 2023 [April 11th, 2023]
- What is edge computing and how does it differ from traditional cloud ... - NASSCOM Community - April 11th, 2023 [April 11th, 2023]
- Bridging The Cloud Computing Skills Gap: Six Recommendations ... - Digital First Magazine - April 11th, 2023 [April 11th, 2023]
- Cloud Computing in Education Sector Market is expected to Exhibit ... - Digital Journal - April 11th, 2023 [April 11th, 2023]
- Enterprise Mobile Cloud Computing Market to Witness Astonishing ... - Digital Journal - April 11th, 2023 [April 11th, 2023]
- IoT Cloud Platform Market Is Expected To Reach USD 23.66 Billion ... - GlobeNewswire - April 11th, 2023 [April 11th, 2023]
- Xponance Inc. raises stake in Nutanix Inc. by 30.2%: A testament to ... - Best Stocks - April 11th, 2023 [April 11th, 2023]
- Cloud-native Software Market to Flourish with an Impressive CAGR ... - Digital Journal - April 11th, 2023 [April 11th, 2023]
- A Quick Guide To The History of Big Data - Baseline - April 11th, 2023 [April 11th, 2023]
- IC Manage Partners with Library Technologies to Accelerate Library ... - PR Newswire - April 11th, 2023 [April 11th, 2023]
- 4 Green IT Businesses Working to Reduce Computing's Impact on ... - InformationWeek - April 11th, 2023 [April 11th, 2023]
- How generative AI can hurt cloud operations - InfoWorld - April 9th, 2023 [April 9th, 2023]
- Microsoft stumps loyal fans by making OneDrive handle Outlook attachments - The Register - April 9th, 2023 [April 9th, 2023]
- Microsoft and Amazon face UK probe on cloud computing - Financial Times - April 9th, 2023 [April 9th, 2023]
- Why Businesses and Leaders Need to Think About Digital Value ... - CEOWORLD magazine - April 9th, 2023 [April 9th, 2023]
- Accenture and Microsoft help Unilever with huge cloud transition - CloudTech News - April 9th, 2023 [April 9th, 2023]
- GFT and CloudFrame help industries say 'cheerio' to COBOL - CloudTech News - April 9th, 2023 [April 9th, 2023]
- ServiceNow, Inc.: Leading the Way in Enterprise Cloud Computing ... - Best Stocks - April 9th, 2023 [April 9th, 2023]
- Cloud Computing Market in Healthcare Industry Demand will reach ... - Digital Journal - April 9th, 2023 [April 9th, 2023]
- What is FedRAMP High P-ATO? FedRAMP High Compliance and Certification Explained - Security Boulevard - April 9th, 2023 [April 9th, 2023]
- Cloud Native Identity and Access Management in Kubernetes - The New Stack - April 9th, 2023 [April 9th, 2023]
- Global Disaster Recovery-as-a-Service Market Expected to Grow ... - PR Newswire - April 9th, 2023 [April 9th, 2023]
- Global Hyperautomation Market to Reach $118.66 Billion by 2030: Increased Demand for Robotic Process Automation Technologies Drives Growth - Yahoo... - April 9th, 2023 [April 9th, 2023]
- Alibaba Cloud Partners with Jaguar Land Rover China - Pandaily - April 9th, 2023 [April 9th, 2023]
- Tech Stocks Have Been on Fire. Earnings Could Spell Trouble. - Barron's - April 9th, 2023 [April 9th, 2023]
- 3 common myths about sustainability and cloud computing - InfoWorld - April 5th, 2023 [April 5th, 2023]
- Amazon set to train 10,000 locals on cloud computing - Business Daily - April 5th, 2023 [April 5th, 2023]
- Amazon: Navigating The Cloud, AI, And Payments Revolution (NASDAQ:AMZN) - Seeking Alpha - April 5th, 2023 [April 5th, 2023]
- How cloud computing is transforming supply chains - DC Velocity - April 5th, 2023 [April 5th, 2023]
- Iowa's new cloud-computing deal costs nearly $40M over 10 years - The Gazette - April 5th, 2023 [April 5th, 2023]
- Petrobras' cloud computing investments set to grow 40% this year - BNamericas English - April 5th, 2023 [April 5th, 2023]
- Confidential Computing Eases Hesitancy Around Cloud Adoption - RTInsights - April 5th, 2023 [April 5th, 2023]
- Risks & Opportunities of Cloud Computing in the Fintech Sector - TechiExpert.com - April 5th, 2023 [April 5th, 2023]
- Security As A Service Market is Anticipated To Grow USD 46.24 ... - GlobeNewswire - April 5th, 2023 [April 5th, 2023]
- Versa Networks Wins 2023 Product of the Year Award for its Industry-Leading SASE Solution - Yahoo Finance - April 5th, 2023 [April 5th, 2023]
- Dresner Advisory Services Publishes 2023 Cloud Computing and ... - GlobeNewswire - April 5th, 2023 [April 5th, 2023]
- Adaptive Learning Global Market Report 2023: Growing Use of Cloud Computing Among Organizations and Educational Institutes to Motivate Learners to... - April 5th, 2023 [April 5th, 2023]
- The CNA market size is expected to grow from USD 5.9 billion in ... - GlobeNewswire - April 5th, 2023 [April 5th, 2023]