Livin on the Edge, Part 3: Storage & Networking

This is part three of a five part series on edge computing with a focus on storage and networking.

THE COWEN INSIGHT

Edge computing will spur storage and networking investment outside of traditional data center architectures. Decentralized compute resources at the edge will fuel demand for data fabric enablers and low-latency storage solutions. Burgeoning demand for energy-efficient high-speed optical interconnect should accelerate adoption of PAM4 and coherent optics infrastructure. 

In this report, we analyze implications of edge computing for discrete storage (NAND flash, HDDs), storage array and data management software, and networking infrastructure markets.

Demand for Real-Time Predictive Analytics, Stimulated by IoT and 5G Should Catalyze Edge Computing

Most of the demand for real-time analytics is being driven by improvements in artificial intelligence training and inference models. However, we believe the ability to monetize IoT and 5G investments will ultimately necessitate an architectural shift in data placement and analysis.

Distributed, Edge-Based Computing Should Continue To Transform Storage Consumption Models

We see the proliferation of edge computing driving a $16B per annum opportunity for NAND flash, or ~9% of industry demand, by 2028. There is no “one-solution-fits all” approach to storage. We see edge computing shaping storage into two primary implementations: 

  1. Permanent, mission-critical storage
  2. Edge cache, a less intensive analytical architecture that emulates a content delivery network (CDN) by caching data between edge devices and centralized cloud data centers.

Distributed, Edge-Based Computing Should Drive Demand For PAM4 and ZR-Standard Pluggable Coherent Modules

We see the proliferation of edge driving a $1B/yr opportunity for optical providers. Pulse Amplitude Modulation (PAM) and 400G+ ZR coherent optics should become ubiquitous for high-speed interconnects across metro, long-haul, subsea, short-reach DCI, and within 3-5 years across broadband access.

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