Is the Cloud moving to the Edge? It has been almost 20 years since the public beta of Amazon Elastic Compute Cloud and 15 years since Microsoft Azure. After all these years, what have we gotten? The answer is simple - advanced automation and scalability, a confusing framework, and a very high total cost of ownership.

It has been almost 20 years since the public beta of Amazon Elastic Compute Cloud and 15 years since Microsoft Azure. After all these years, what have we gotten? The answer is simple - advanced automation and scalability, a confusing framework, and a very high total cost of ownership.

After 20 years, Amazon Web Services (AWS) has mapped the world with 34 "regions" with 108 "availability zones", over 600 CloudFront POPs, and 13 regional edge caches. However, if you look closely at the data center map, Amazon only has 6 major data centers in the U.S. and two more in Canada. In the U.S., AWS operates what it calls "Edge Network Locations" - locations that Amazon considers to be edge data centers. But these are not edge data centers. They are relatively small facilities used more for caching content than for storing large amounts of data like data centers. So in almost 20 years, Amazon has only managed to open six major U.S. data center locations.

Microsoft Azure has a similar story. They operate 6 major U.S. data center locations and three more in Canada. Like AWS, Azure operates edge networks called "mini-Azure regions." These are points of presence in densely populated areas that are used to cache content and process data at the edge for lower latency. However, these POPs are not separate data centers that provide processing power, data storage, management, and connectivity.

Both AWS and Azure will enter 20225 with a data center in South America. In Europe, Microsoft Azure can be used in 12 data centers, while AWS can be used in 8 with one more data center to be launched. Both major cloud providers have two data centers each in India. In the rest of Asia, AWS has 11 data centers, while Azure has 14 data center locations. Both vendors have a number of data centers in Asia announced as "coming soon," whatever that means.

According to Statista.com, AWS has a 31% market share in the cloud computing industry at the beginning of 2024, while Microsoft Azure has a 24% market share. With the third largest cloud - Google Cloud, the so-called "Big Three" cloud providers - AWS, Azure, and Google Cloud - account for more than 60% of the cloud market.

Market-driven by AI & IoT

The cloud computing market is experiencing a strong growth surge. Much of it is being driven by artificial intelligence (AI) projects. According to John Dinsdale, principal analyst at Synergy Research Group, "New AI-oriented services and technologies are helping the major cloud providers ride a wave - new capabilities lead to increased demand, which leads to increased revenue, which then allows for more investment in the underlying technologies.

While the large hyperscalers will continue to lead the market in terms of revenue, there are at least five rapidly evolving Internet of Things (IoT) technology niches that are changing use case scenarios and shifting IT workloads from the largest centralized clouds to large decentralized global technology infrastructures operated by smaller operators and structured at the edge, as close to computing users as possible. These IoT industry niches are 5G/6G content networks, edge computing, AI-augmented IoT, blockchain networks, and industrial IoT (IioT).

Large telecom companies and mobile connectivity providers will dominate the 5G/6G content market. They are expected to increase their share of the cloud infrastructure market, primarily with an infrastructure used to deliver their own hosted services and applications.

Edge-hosted content tech to evolve

The edge computing market deserves special attention. This is a fast-growing industry in which many small and midsize vendors are positioning themselves as providers of edge-hosted cloud and bare-metal servers used to host public applications and private workflows. This is the technology infrastructure niche led by the likes of Equinix, Digital Realty, Coresite, NTT Global Data Centers, Databank, CurusOne, Cyxtera, Tierpoint and hundreds of other large and small technology infrastructure service providers.

A layer below in the global infrastructure ecosystem, but not as important, are companies like RackSpace, Akamai, OVHCloud, DigitalOcean, LeaseWeb, etc. that specialize in providing physical or virtual server hosting services. There are also hundreds, if not thousands, of companies that specialize in different niches of hosting data and applications at the edge. Some are traditional hosting providers such as Dreamhost, Bluehost, HostGator, GoDaddy, Siteground, Ionos, and many others that host websites and content in a centralized location or a few data centers. Others are providers like HostColor that specialize in offering edge-hosted virtual and dedicated cloud servers. Each of the above and many other reputable hosting companies are technically edge providers in a specific geographic area because they host data and applications locally and their networks are designed to deliver services to the local market with very low latency.

In IoT markets characterized by the decentralization of data centers and their physical locations moving to the edge, service platforms created to deliver technology services on-demand across multiple locations are becoming increasingly important. There are a number of blockchain-based decentralized storage providers, such as InterPlanetary File System, BitToret, FileCoin, Sia, Storj, Arweave, Firebase, etc. However, most of them only host stateless applications (mostly static HTML web pages) and do not provide hosted infrastructure for stateful applications that store client session data on the server environment. There are several models of geographically distributed hosting infrastructure. Some of them, such as ServerWhere, combine the edge-based, decentralized cloud infrastructure model with blockchain-based and cryptocurrency-based technologies. However, the distributed hosting industry is still in its infancy. When distributed computing infrastructure providers are able to transform their hosted stateless storage services into hosted stateful applications, the growth of the industry will accelerate and application delivery ecosystems will be transformed.

The migration of hosted data and applications from large centralized clouds to smaller data centers and location-aware service platform operators for the delivery of edge-hosted applications is underway. Then the transition will continue with the migration of stateful applications to a more distributed hosting infrastructure, and finally to native platforms for hosted data, content delivery, and applications.

As the model of edge-hosted technology infrastructure merges with the model of hosted distributed storage and hosted distributed and distributed applications, virtually anyone will be able to connect a compute node to an infrastructure ecosystem and deliver enterprise-grade service quality of hosted applications. This is the end point of edge hosting. We will probably get there within less than 15 years.