How Much Will the Edge Cost?

By January 9, 2020July 21st, 2020Postcards from the Edge


by Iain Gillott
Founder and President of iGR


Factors impacting the cost of the edge

Edge computing emerged on the wireless industry stage several years ago, and there are several different versions and approaches. Regardless of the approach, edge computing has the potential to be as disruptive a technology as any of the other fundamental transformations affecting the wireless industry, including 5G New Radio, NFV/SDN, C-RAN, etc. In fact, edge computing will quite likely help realize the promise of 5G particularly since virtualization underpins the new 5G system architecture.

Defining the edge

Before we discuss the cost of deploying edge computing, we should first agree on a definition of edge computing in the context of wireless infrastructures. iGR defines an edge computing hardware platform as a secure, virtualized platform which can be “opened up” to third parties, such as content providers and application developers. Such a platform might incorporate a wireless technology, such as an LTE radio, Wi-Fi, 5G NR or some combination of those. Historically, most edge implementations have used Ethernet or Wi-Fi and not cellular. Over time, iGR believes that will change as private LTE networks get deployed and vendors bring 4G/5G-based IoT devices to market.

Mobile edge computing is a natural extension of the mobile cloud concept in which user equipment (UE) takes advantage of remote storage and compute resources accessed via transport provided by the Radio Access Network (RAN), to:

  • Introduce new applications that cannot run on the UE
  • Extend the battery life of the UE by offloading compute to the cloud
  • Increase storage via the cloud or obviating the need for it entirely, such as with streaming music and video.

In this model, edge computing essentially moves the cloud servers closer to the UE in order to mitigate the downsides of mobile cloud computing, including increased mobile data usage and higher latency.

Network operators also benefit from edge computing since they are able to:

  • Offload traffic from their networks sooner, thereby reducing the burden on their RAN and backhaul
  • Use edge computing to improve the efficiencies of their network operations, which ties into the NFV/SDN trend as well as the evolution of their networks from LTE and the EPC to 5G NR and the next-gen core.
  • Offer new services to enterprises via the edge computing platforms.

Locating the “edge” and the associated cost

You could say that the edge is located where, if you take one more step, you fall of the cliff! 

In networking terms, the edge typically means a location that is very close to the end consumer of the content. This can mean different locations for an operator versus an enterprise. Depending on the type of content, the type of end user and the specific needs of the application, the edge can be in very different places. The location of the edge fundamentally impacts the cost to deploy an edge solution. For example, just consider the real estate required to house the edge computing equipment and the varying costs of space in commercial buildings. 

Where an operator locates their edge computing will impact cost in many ways. Operators must consider much of the following when making these decisions:

  • How much latency can the given function tolerate? Does the edge have to be located close to the mobile radios for latency reasons, for example — if so, this will prove more expensive to deploy than putting the edge servers further back in the network.
  • What are the benefits of doing the computation at the edge versus somewhere else? How does the storage location of the data itself impact this cost/benefit analysis? Generally, storage and compute power are cheaper when they are clustered — think of the difference between a small data center and a large cloud center (the latter is far cheaper on a per-bit basis).
  • How is backhaul impacted? What else is going on in the network? If the edge compute installation requires additional backhaul to support those capabilities, costs will increase significantly.
  • Does the end user have a say in where the processing occurs? The answer might be different for enterprise and consumer users. If the end user has constraints, then this will increase the costs of delivering the edge services. Ultimately, this question relates to the value of the edge application being supported and the value of the customer.
  • How scalable do the edge compute resources have to be? For example, will they require excess capacity to handle additional offloading? As the solution scales, will it require additional space, with the corresponding increase in rent, power, environmentals, and so on?
  • Will the edge computing infrastructure host 4G LTE and 5G packet core components, as well as third-party applications? What measures will be put in place to prevent those third-party applications from hogging resources the network needs? Alternatively, are multiple edge compute platforms required to prevent this type of situation? Obviously, the need for multiple servers will increase deployment costs.
  • Are there security concerns regarding where the processing is done? Could hackers gain access to the 4G or 5G packet core by exploiting a weakness in the edge computing platform? How much physical security will be required? Will the edge compute solution share space with other servers or must the edge computing be located in its own secure location? Again, this will directly impact costs.

These and many other questions must be answered on an application-by-application, company-by-company and/or operator-by-operator basis. The important point is that there is a lot more to the cost of deploying edge computing than simply pricing the server hardware and installing at an available location. 

Other factors influencing cost

Edge compute servers, by definition, must be close to the end user, have a reliable source of power and backhaul, be in a secure location (both physically and from a network perspective), and be accessible for maintenance. The following factors also influence cost:

  • What maintenance may the servers require? Will a technician need to be deployed for maintenance and troubleshooting? Or is the edge computing server “disposable,” where the cost of visiting the location exceeds the cost of the hardware? In this case, if there is a problem with an edge computing server, the workload can migrate to another location and the rogue server decommissioned.
  • Is the edge computing server on a truck or vehicle — for example, a small server can be placed on a refrigerated truck to monitor the various sensors for the cargo, engine and other systems. In this case, any maintenance could be performed when the vehicle returns ‘home’. But the cost of backhaul must also be factored into this scenario.
  • Who owns the location for the edge computing? For example, the costs for locating at the base of a cell tower will be very different from a commercial data center or a data center in the base of an office building.
  • Are there any firewall issues — this really applies to enterprise locations. edge computing can be located in a wide range of possible locations from the enterprise main data center to retail and manufacturing locations, depending on the application.
  • How accessible is the location for edge computing installation and maintenance? For example, while the basement of a commercial building may be secure, have good power and offer good security, but it may not be accessible after-hours or on weekends.
  • Are there any right of way and attachment fees? Many cities charge attachment fees to locate equipment on their buildings or in their right-of-way. These vary by city and location, but the reality is that simply putting a box at the side of the road containing the edge computing node may involve significant permitting cost.


To summarize, the cost of deploying an edge computing solution involves more than just the cost of hardware, software and physical installation. In the case of edge computing, where the node is actually located has a major impact on the cost:

  • How will backhaul be provided? How much? Will the backhaul need to scale?
  • Does the edge computing node need regular updating or maintenance that will require site access? Is site access available 24×7 or on a more limited basis? Who controls access?
  • Are their right-of-way or permitting issues with the location? Who controls this?
  • What are the physical and network security considerations? How must the server hardware be protected or hardened?

Edge computing servers may be placed anywhere there is power and backhaul in a secure location. But the particulars can severely impact the cost of deployment and operation. As such, the cost of no two edge computing installations are alike.

iGR is a market strategy consultancy focused on the wireless and mobile communications industry. Founded by Iain Gillott, one of the wireless industry’s leading analysts, we research and analyze the impact that  new wireless and mobile technologies will have on the industry, on vendors’ competitive positioning, and on our clients’ strategic business plans. A more complete profile of the company can be found at http://www.iGR

Disclaimer: The opinions expressed in this market study are those of iGR and do not reflect the opinions of the companies or organizations referenced in this paper. All research was conducted exclusively and independently by iGR.