5G Brings The Power Of Cloud To The Edge

by Peter McHale, Summer Associate, Darling Ventures

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Photo by Taylor Vick on Unsplash

Big data management, SAAS, predictive analytics, and AI — these are just a few industries enabled by cloud computing. So much of the recent innovation we see in software has been unlocked by the cloud, you would be forgiven for thinking that everything is running on AWS or on another server farm. IoT, however, is a huge market of game-changing technology that has not been able to partake in cloud computing’s accessible economics and powerful computing capabilities. IoT applications often need an immediate reaction to what they sense, generate massive amounts of data to be processed, and have unique security constraints.

5G is about to change that. With its ultra-low latency, ability to cheaply send large amounts of data, and improved security, 5G will empower many IoT devices with the computational power of the cloud. When 5G powered IoT is able to utilize the capable AI algorithms that live in the cloud, we will see an IoT explosion of possibilities become reality. This shift offers great opportunity for companies working in the IoT space but also warrants a reexamination of their strategy and value proposition.


In the early 2000s, multiple startups, such as Marc Andreessen’s Opsware, popped up with a cloud computing product before most understood what the cloud was. Large companies such as Amazon and Microsoft later came out with offerings like AWS and Azure that made cloud computing as widespread as it is today. Outsourcing cloud computing to offerings such as AWS was attractive to companies for a number of reasons: 1) companies were able to have cheap upfront costs without having to buy expensive server hardware, 2) companies gained unprecedented reliability by shifting the responsibilities of maintaining servers to outside vendors, thus maximizing uptime and 3) companies were able to manage diverse web-traffic rates by paying as they went with unlimited accessibility to more computing resources. So why hasn’t IoT participated in these huge benefits?

IoT applications have been limited by three constraints that have kept them using computational and data storage resources at “the edge”, or close to where the data is created and the application is utilized. Many of these applications have unique security requirements that prevent them from sending their data to an external server. Other applications are constrained by not being able to cheaply send large amounts of data through the internet to a server. Finally, some applications need ultra-low latency to react quickly to data or input at the edge. 5G is about to meet these needs for many IoT applications and allow them to reap the benefits of the cloud. Now let’s explore this 5G IoT revolution.

Moving to the Cloud

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One area that is receiving plenty of attention from 5G media is VR, and for good reason. Currently, VR means buying high-priced hardware for an experience you likely aren’t using all the time because there isn’t a fast-enough means of receiving data that isn’t within a few feet of you. There’s already talk about using ultra fast latency to move this processing to the cloud, and bring about pay-as-you-go virtual reality as a service. 5G will bring this reality closer, but before we see that total paradigm shift, 5G is enabling VR to utilize cloud resources. BAD VR is an early such example, focusing on how VR can be used for visualizing data analytics. Imagine a world in which emergency phone operators update a back-end that lives in the cloud with data on a current emergency, while first responders wear augmented reality headsets that help them visualize all the data about the current incident, as well as any medical guidance to support their efforts once they arrive. All of this data would stream reliably and instantly via 5G when every second counts . This is the world that BAD VR is working to create.

While BAD VR is working to equip first responders navigating a city, others are focused on the city itself. Cities will become smarter and smarter via lightweight and cheap sensing hardware scattered around them. This hardware will communicate with the cloud, hosting large-scale optimizations and coordinating thousands of tasks using powerful AI. AI will then communicate with vehicles and pedestrians to create some remarkable mobility efficiencies. Haas Alert is an early player in this space. Their product enables first responders to communicate information to a “safety cloud” that then alerts motorists immediately of an accident so that they can slow down well in advance of seeing it. While there is some manual data input happening here, we will see more and more of these applications being automated.

Navilens is another early contender in the smart city space. Their app scans QR-like codes placed throughout a city to help people with visual impairments navigate through the city, or to help unimpaired pedestrians gain access to navigational information that is relevant to their exact location. This allows people to use the same technology outdoors or indoors (where GPS doesn’t work so well), potentially even while using a subway. They’re currently limited by the number of images scanned, however 5G’s data rates will greatly lift that constraint with access to cloud compute resources and will enable more seamless and exact navigational information.

Smart manufacturing plants need quick responses to failing machinery or process failures. When 5G brings increased security and ultra-low latency, plants can send non-sensitive data to platforms and resource-intensive AI living in the cloud to perform analysis and then immediately respond at the plant. Petasense is a great example of this. A plant places a Petasense device on a machine that then sends accelerometer data to a platform in the cloud that uses AI. With the combined compute power of the cloud and the data from the IoT sensor in the plant, an AI can detect a failing machine and send a signal to the plant to shut down and schedule maintenance. Augury, which Qualcomm recently invested $8 million in its Series C, offers a similar product and aims to catalyze a wave of valuable IoT manufacturing technologies that are possible with 5G.

Limitations of 5G Powered IoT

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Photo by PAUL SMITH on Unsplash

The IoT landscape is about to go through a 5G-powered revolution, but not everything will change. Some IoT applications will still have to remain at the edge in this new world. What applications will remain at the edge? Throughout this piece, I referred to costs of communicating large amounts of data, unique security needs, and ultra-fast speed requirements as the reasons IoT hasn’t made its way to the cloud. Though 5G will greatly tackle these needs, it will still fall short for some applications.

Maximum Security Requirements

Though 5G will offer incredible security via virtualization and network slicing, this security in communication doesn’t make the cloud servers your data is stored in any more or less secure, and so many applications will still opt to stay at the edge for higher security guarantees. 5G might still be utilized in these IoT devices, but as a means of getting data from distanced devices to a local server rather than to the cloud. Some applications that might fit into this bucket include industrial control systems and plant automation, such as Veo Robotics ‘ product which tracks human movement in order to allow safe collaborative work with automated machines. We might also see some hybrid approaches here to get the benefits of the cloud while keeping most of the security of hosting data at the edge, such as storing data on local servers, but then allowing a platform for operational management running in the cloud to access the local data.

Still Too Much Data

The cloud can offer more cost effective computation, but there’s still a cost to get your data to the cloud server. While 5G is expected to decrease this cost, there still exists a tradeoff, and so some use cases will still find it worthwhile to keep the data processing at the edge. A good example of this is automated security systems. If an application consumes gigabytes of video data in a day, but all it needs to do with it is check if anything has changed frame-to-frame, then the engineer might keep this simple computation close to the camera and only send up data when something has changed, like Reolink ‘s Argus 2 camera does.

Optimally Minimal Latency

While 5G has lightning fast latency characteristics (theoretically as fast as 1–4 ms), it will still add that time, plus the time to get a response from a server, to any process that relies on it to run an application in the cloud. In some settings, the value of every millisecond is greater than the benefits gained from using cloud computing. A great example of an application that will not leave the edge for this reason is the AI for autonomous vehicles, like that which May Mobility is creating. When you write a feature that will enable a vehicle to detect a pedestrian or a car, you will shave off every millisecond you can from the sensor making the measurement to the vehicle hitting the brakes. At the end of the day, you don’t want the reason a car hit someone to be that a cloud server, for whatever reason, took too long to respond.

Strategies for IoT Companies to Succeed During the 5G Revolution

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So change is coming, for better or worse, and for most it will be for the better! But if you are a company working in the IoT space and are concerned about 5G being a disruptive force, what can you do about it? I propose two strategies, and since this shakeup is around the future of product in IoT, the strategies are centered around product.

First of all, as noted earlier, not all of IoT will be moving to the cloud. If your product is focused on applications that will stay at the edge, then you will be in a strong position for the next decade as your customers remain largely unaffected. One great example of this is one of our portfolio companies, Foghorn. Foghorn specializes in applying intelligent algorithms at the edge for industrial processes, and with the type of data they work with, many of their customers’ applications are going to be staying at the edge. First of all, the data can be sensitive, involving videos of manufacturing plant workers used to detect whether safety equipment is being appropriately worn and data on plant-specific operations that contain valuable IP for the company. Secondly, much of the data is massive, consisting of video streams, and would cost more to stream to a cloud server than it would to process locally with Foghorn’s edge-optimized AI. While many of their applications will likely remain at the edge, Foghorn is also well-positioned to take advantage of 5G for uses such as ultra-low latency automation.

The second strategy is to focus on creating value in the IoT space independent of where the data is hosted or where the computation is happening. Anylog, a new startup, does exactly this. Their product allows you to navigate a decentralized IoT graph of data storage and computational resources, wherever the different hardware may be, as a singular centralized database. This product does not care if the data is stored in the cloud, at the edge, or a mix of the two. It also doesn’t care if the hardware for the computation you perform on the data is near the edge or in the cloud. It allows you to abstract all of that detail away, and parse the data as if it were collected in a single place. This kind of offering will keep companies valuable after 5G shifts many IoT applications to the cloud. This product strategy can even provide an advantage to companies that decide to shift from the edge to the cloud, as these companies would parse their data the same way before and after the shift.

Hopefully throughout this piece you’ve noticed a common thread about what 5G and the movement from the edge to the cloud will do for IoT. It’s not just about existing applications moving their data and compute from the edge to the cloud, it’s also about entirely new possibilities. With the constraints that 5G will relax for IoT, there will soon be an IoT explosion with new applications and new devices popping up everywhere to collect data or communicate to the edge from an AI running in the cloud. Somewhat ironically, as this centralization of computing resources to the cloud decreases costs, offers an incredibly robust back-end, and makes scaling trivial for IoT, it will cause a decentralization revolution. In the coming decade, countless IoT products will flourish in a beautiful symbiosis between lightweight devices at the edge, cloud computing resources in the back-end, and 5G in the middle to communicate between the two.

Originally published at https://medium.com on August 13, 2020.

SF based Seed VC firm; building a bridge for international investors to the next gen of US tech startups @DarlingVC / www.DarlingVentures.com

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