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Edge Computing in the Wireless Infrastructure World

By Don Bishop

Marc Ganzi, president and CEO of DigitalBridge Group; and Matt Niknam, director of equity research and communications infrastructure analyst at Deutsche Bank

Edge computing has two aspects and three sizes, according to Marc Ganzi, president and CEO of DigitalBridge Group, which has 23 portfolio companies, including several that are involved with edge computing. According to American web infrastructure and security company Cloudfare, edge computing optimizes internet devices and web applications by bringing computing closer to the source of the data. Edge computing minimizes the need for long-distance communications between client and server, which reduces latency and bandwidth use, as stated by Cloudfare.

Within the DigitalBridge portfolio, companies that provide data centers, optical fiber connectivity, macro cell towers and edge infrastructure have roles to play in edge computing.

Of the two aspects of edge computing, Ganzi said, one is the physical aspect of where infrastructure sits. The second part, he said, is the experience, how the customer ultimately participates in a low-latency environment and how its applications work. He said the two functions are consumer and geography.

Edge Infrastructure Layers

“Let’s start with geography,” Ganzi said, in speaking about edge computing with Matt Niknam, director of equity research and communications infrastructure analyst at Deutsche Bank, during the bank’s 29th annual Leveraged Finance Conference on Oct. 4. “Geography is pretty easy to understand, because there are three layers to edge infrastructure: main edge workloads, mid-range and micro edge,” he said.

“Main edge workloads are secondary and tertiary markets, where you’re not in a primary hyperscale market, as in Ashburn, Virginia; or Goodyear, Arizona; or some of the other big areas such as Atlanta, where you have massive, hundreds of megawatts of power and compute,” Ganzi said. “And then you go to you go outside of that for what’s happening in markets like Salt Lake City; Austin, Texas; Cleveland; and Minneapolis. These are good edge markets.”

The main edge workloads, Ganzi said, range from half-megawatt to 4-megawatt workloads in secondary and tertiary markets. He said that one of DigitalBridge’s portfolio companies, Databank, is providing such service every day. He said that Databank is delivering and fulfilling the main edge workload need for hyperscalers as they continue to deploy and densify their infrastructure in secondary and tertiary markets. According to manufacturer NAI Group, a hyperscaler is a data center that can add or reduce computing power quickly and cost-effectively. Market research firm International Data Corporation defines hyperscale computing as exceeding 5,000 servers and 10,000 square feet.

According to Ganzi, mid-range edge computing are special, purpose-built data centers between 5,000 and 20,000 square feet that most often are built in suburban locations. He gave as an example Somerset, New Jersey, that he said is neither a secondary nor a tertiary market. “That’s a suburb of New York,” he said.

In such suburban locations, Ganzi said, “you’ll have either a repurposed central office or a small data center. In there, you’ll have aggregation points of radios; you’ll have a small presence from the cloud players — maybe two to three racks — and then you’ll have adjacent content players there. That’s what I would call a true edge out workload, where you’re out in the suburbs and you’re trying to execute the main thesis of their business plan, which is to increase the throughput out to the suburbs, but reduce latency.”

The third layer to edge computing in the aspect of geography, Ganzi said, is the micro edge. He said DigitalBridge supplies micro edge computing through its portfolio company EdgePresence. DigitalBridge made its investment in EdgePresence through Databank. He described EdgePresence managers as great entrepreneurs.

Micro Edge

“They really understand the business,” Ganzi said. “We have 12 micro edge locations, most of them at Vertical Bridge towers. We built at a couple at other towercos’ sites.”

EdgePresence housed the micro data centers in repurposed intermodal shipping containers, Ganzi said.

“We have anywhere from 10 to 20 racks in those containers,” he said. “We’re getting lease rates that are effectively a half of a broadband equivalent (BBE) for a rack. We’re leasing compute space at the base of cell towers.”

Ganzi said he wanted to be clear with investors, so he emphasized that placing edge micro centers would not happen at every cell tower.

“You don’t need an edge data center at the bottom of every cell tower,” he said. “You probably need one at one out of 100. We started trial testing this in Atlanta.” Ganzi said that Atlanta was a test market for the EdgePresence micro data centers.

“What’s great is that we’re doing all three,” Ganzi said, referring to the three layers of edge computing. He said that another DigitalBridge portfolio company, AtlasEdge Data Centres, in Europe, is using many previous Liberty Global central offices in a project to run more than 100 edge data centers on the continent. “We’re renovating them, putting in edge infrastructure,” he said.

Databank is doing massive edge workloads in places such as places like Bluffdale, Utah; Overland Park, Kansas; and Eden Prairie, Minnesota; Ganzi said. “Then, in Atlanta with EdgePresence, we’re building micro data centers,” he said.

“So, the three layers, right?” Ganzi said. “You go way out to a half-megawatt to 4 megawatts, then you get into a zone with 10 to 20 racks, and then you get to the micro edge, which is literally a couple of racks that are based at the tower. The network begins to move out, but you can take the network down to a very surgical level and deliver edge computing.”

In explaining that the objective is all about what the customer wants, Ganzi said that the customers in this instance are Amazon, Microsoft and Google. In addition, he said customers in the United States include the four major mobile carriers. More customers include the internet-of-things players, he said.

“It’s trying to make sure that we’re delivering a high-powered high compute experience on the periphery of the network, ultimately, to serve consumers,” Ganzi said. “This is totally consumer-facing, because most of the edge compute in an enterprise environment is going to happen in the bottoms of office buildings where we build out small edge data centers in the basements of office buildings as we light up enterprise CBRS.”


Don Bishop is executive editor and associate publisher of AGL Magazine.

Capex, Opex, Lease-up Deliver Boost to ROI for Vertical Bridge

By Don Bishop

The largest private owner and operator of communications infrastructure in the United States, by its own account, Vertical Bridge manages more than 300,000 properties. The company’s vice president of tower development, Ariel Rubin, said that Vertical Bridge builds towers with a focus on increasing its return on investment (ROI). Rubin spoke during an AGL Virtual Summit in June at the session, “Increasing ROI at the Tower,” moderated by Spencer Kurn, an analyst who leads coverage of U.S. towers for New Street Research.

Ariel Rubin (left), vice president of tower development at Vertical Bridge, and Spencer Kurn, an analyst at New Street Research.

Tower construction affects Vertical Bridge’s capital expense (capex), as reflected in the cost to build the sites, and affects the company’s operating expense (opex), Rubin said. Controlling those expenses helps to raise the company’s ROI.

“On the capex side, we have a great network nationwide of partners that help us not only with the services side, which include everything from site acquisition to engineering services and environmental services, but also one of our largest costs, steel and the towers we procure,” Rubin said. “The network of vendors that provide us with steel and being able to have ready access to sites anywhere in the country have been helpful at keeping some of those costs down.”

Construction is another large capex component, Rubin explained. He said Vertical Bridge has networks of regional contractors and nationwide contractors that help the company when it needs more volume in certain regions or when it needs more specialized contractors in some other markets.

When it comes to capex, Rubin said, “the less you spend, the better your returns will be. More importantly, as we look at ROI and how it’s tied to tower cash flow, the more we can keep of the rent we collect on a site is directly reflected on the return on that particular site. Thus, the operating expenses that each site incurs are one place where we looked and made sure to focus on as we build new sites.”

Rubin identified six items of opex that primarily affect tower cash flow: ground rent, maintenance, utilities, monitoring, insurance and taxes.

“The largest is ground rent,” Rubin said. “We always look to have long-term rights, or purchase the land, or have long-term easements on a property. That helps us control some of the ground rent costs that we incur.”

Vertical Bridge must maintain its sites properly, and it acquires sites with maintenance in mind. Although sites with long access roads or otherwise designing sites that would be expensive to maintain, although perhaps not costing significantly more initially, affect the company’s cash flow because those sites would need to be maintained for years and years, Rubin said. As a result, Vertical Bridge takes maintenance into consideration when designing and building the sites.

As for utilities, Rubin said Vertical Bridge typically does not have high utility costs, but it pays for tower lighting and some power accounts.

“We’ve worked with federal agencies on eliminating nonflashing lights,” Rubin said. “As an example, we were going to LED lights that not only help us reduce some of our opex costs and bring down our utility bills, we’re also helping reduce bird collisions and reducing some of the effects that our towers have in the environment. We’ve seen cost savings from $500 to $1200 to $1300 a year in power bills. We make sure that as sites are being put up, utility costs are minimized for years to come.”

Rubin said that monitoring and insurance costs are somewhat more difficult to control on a site-by-site basis. He said Vertical Bridge’s size helps the company to negotiate, because of the volume of sites.

“If somebody could figure out how to pay less taxes . . .” Rubin mused. “That’s something that we’re subject to. That’s another expense that affects our tax control framework and our return on a particular site.”

Session moderator Kurn said that controlling expenses is one side of the ROI equation — the other, improving tower lease-up.

Rubin then spoke about Vertical Bridge’s large portfolio of  broadcast towers and tall towers, aside from what would be called the traditional towers for carriers. He said Vertical Bridge has been able to make the broadcast towers available for use by wireless carriers.

Meanwhile, Rubin said, the broadcast towers typically have a significant amount of land beneath them, and that is where edge data centers come in as additional lease-up.

“We have enough ground space to not only offer for edge computing, but also solar and some other applications,” Rubin said. “We to work with government entities and wireless internet service providers (WISPs). WISP rollouts are more regional, and we see groups of activity here and there. It’s a mix that continues to grow, but nothing significant at least on the new tower development side. Once the towers are up, this is where a lot of these new opportunities are coming into play.”

Vertical Bridge capitalizes on the edge computing opportunity with existing infrastructure and with what Rubin called edge-to-suit.

“We work not only with the direct carrier contacts that we have at Vertical Bridge, but also we have partnered with our sister companies. DataBank and EdgePresence, and are able to use our existing infrastructure and leverage that from some of the contacts that they bring where we can find some synergies in optimizing the use of our assets,” Rubin said.

“The second part is what we like to call edge-to-suit, which is leveraging our site acquisition teams and development teams to identify, lease, permit and build out to your power and fiber-ready location. It’s kind of like a build-to-suit, but just for edge services. We have the team in place. We think about longer term, making sure we have the ability to put up a tower if needed, but providing that service to our carrier, contacts, just for the edge solution that they need. We have the knowledge.We don’t necessarily have to go put up a tower on day one, but it’s a lot of the same skill set that we already have that we’re using on a daily basis. Using our existing infrastructure and our existing knowledge —that’s where the opportunity for us is key.”

For the June 8 AGL Virtual Summit, Total Tech sponsors included Raycap, Valmont Site Pro 1, Vertical Bridge and B+T Group. Tech sponsors included Alden Systems and Aurora Insight. Viavi Solutions sponsored the keynote address. Additional sponsors included Gap Wireless, NATE, VoltServer and WIA.

J. Sharpe Smith programmed the Summit, and Kari Willis hosted. AGL Media Group has scheduled the next AGL Virtual Summit for Sept. 8. To register, click here.

Don Bishop is executive editor and associate publisher of AGL Magazine.

 

Edge Computing Could Help Both Carriers, Tower Owners

By J. Sharpe Smith

Edge computing is becoming part of the network conversation as more companies go public with their solutions for wireless communications. Placing data center infrastructure, i.e. content, at the edge of the network will give immediate access to the internet to billions of mobile devices, such as smartphones, medical devices, industrial controls and IoT sensors.

But that vision of the future goes out a few years.

What carriers need right now is a way to cut their backhaul costs which have risen because of the increased traffic caused by unlimited data plans, Greg Pettine, founder and EVP of business development, said in a phone interview with AGL eDigest.

“The [carriers] know that if they can get some of the content out beyond their core data centers out to the wireless edge, they can significantly maintain their operating expenses regarding fiber to the tower. That’s big,” Pettine said.

Also important to today’s carrier operations is the performance of the network, which can be negatively affected by traffic congestion. “The [carriers] have admitted to throttling back users of certain applications, such as YouTube, Facebook, Netflix and Amazon,” Pettine said. “This results in churn, which they don’t want to happen.”

EdgeMicro’s answer to the traffic congestion problem is to locate the data from these websites in a micro datacenter positioned at the cell site or a central office or a mobile telephone switching office. Then, when a data request comes into the tower, the system redirects it to the micro datacenter to get the data, instead of backhauling it to the regional data center.

The organizations may take advantage of storing data in a micro datacenter because they are the ones driving the most content across the internet. Those companies including Facebook with Facebook Live; Instagram; Google with YouTube, Akamai Technologies, which is used by the ad networks; Amazon and Netflix.

Data traffic in EdgeMicro’s network-neutral micro data centers is managed by a technology known as Tower Traffic Xchange (TTX), which is a Local IPAccess (LIPA) solution that combines all the necessary LTE network components into a single, low-power, collocated appliance.

EdgeMicro gave a preview of its TTX and micro data center at the Competitive Carriers Association’s (CCA) Annual Convention earlier this year in Fort Worth.

The company’s medium-term plan is to deploy at 500 tower sites in the next five years. First, 30 micro datacenters will be deployed at busy multi-tenant towers that serve 100,000 people in the next 18 months in tier-two cities, which don’t have a lot of backhaul, content or ISP peering.

“That will provide us with the data to proliferate our micro datacenters,” Pettine said. “EdgeMicro’s prefabricated micro data centers will be deployed at ultimately thousands of cell towers globally.”

EdgeMicro’s collocation model is based on an 8-foot by 20-foot container with six racks. A quarter rack would be sold to each content provider, which works out to 24 customers in each container.

“We are in various stages with the [carriers], introducing it into their labs for testing. Ultimately, they need to start field test the acquisition of data,” Pettine said.

Micro Datacenters: Good for Towers?

What is in it for tower companies? Providing micro datacenters will make towers stickier, reducing carrier churn. Tower companies would make good strategic partners and could fund the effort as an alternative cash flow.

“Tower companies get increased rent and have the potentially to be strategically aligned in bringing in innovative cash flow,” Pettine said, “But they don’t know anything about data centers and that is where we come in. We understand the collocation model from a datacenter perspective: the cost-to-build and opex.”

Tower companies have already shown an interest in micro datacenters. For example, Crown  Castle International is a minor investor in Vapor IO, whose Project Volutus enables cloud providers, wireless carriers and web-scale companies to deliver cloud-based edge computing applications via a network of micro data centers deployed at the base of cell tower sites.

“The cloud of the future will extend past today’s large, centralized data centers. The next generation cloud will follow your car. It will follow your phone. It will follow your sensors. It will be distributed and data driven and everywhere,” Alan Bock, vice president of corporate development & strategy, Crown Castle.

Vertical Bridge announced in late September that it has partnered with its sister company DataBank to host edge computing at the base of cell towers. Additionally, AT&T has announced it also has micro datacenter plans.

One pundit has claimed that the Cloud is “dead.” While that may be an overstatement, the global market for micro data centers is certainly alive and projected to be $8.47 billion by 2022, according to a report on MarketstoMarkets Research.


J. Sharpe Smith and the senior editor of the AGL eDigest. He joined AGL in 2007 as contributing editor to the magazine and as editor of eDigest email newsletter. He has 27 years of experience writing about industrial communications, paging, cellular, small cells, DAS and towers. Previously, he worked for the Enterprise Wireless Alliance as editor of the Enterprise Wireless Magazine. Before that, he edited the Wireless Journal for CTIA and he began his wireless journalism career with Phillips Publishing, now Access Intelligence. Sharpe Smith may be contacted at: [email protected].