Moving content and services closer to the end user may define the data center of the future.

Edge data centers move data processing closer to where the data is, reducing the amount of data that traverses the Internet. The word edge usually connotes something dangerous and risky. But edge data centers can also mean better, safer IT for the enterprise.

Providers argue about the definition, and one could say it’s nothing more than a marketing term. "We actually trademarked the term 'edge data center' three years ago," says Phill Lawson-Shanks, chief architect and vice president of innovation at EdgeConneX, a Herndon, Va., data center provider. “We marketed the bejesus out of it.” Other edge data center vendors include 365 Data Centers, Netrality, and Zayo Group.

The definition is also a moving target. “Edge is defining itself as we speak. It’s going to take some time to really define what ‘edge’ means,” says Srdan Mutabdzija, future offer manager at Schneider Electric, a provider of physical infrastructure for data centers with North American headquarters in Andover, Mass. It can include technologies such as a single-rack micro data center, a regional data center that does processing and sends results to a hyperscale data center, a distributed data center, or a data center in a box.

Because of the fuzziness of the definition, it can be hard to figure out how much the market is growing, though Mutabdzija estimates 10 to 20 percent annual growth.

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The case for edge IT

“People are putting the IT power where they need it,” says Jennifer Cooke, research director for data center management at IDC. End users can process their data at a service provider or through a colocation provider—any service provider that offers resources where they are needed. Edge data centers can also be situated at a remote location, or a location where a company wants to use private resources rather than public resources due to regulatory and privacy requirements.

Particularly in Europe, some countries have data sovereignty regulations that restrict the ability of companies to move personal customer data out of the country. In one ongoing legal case, the U.S. Department of Justice is claiming access to user data stored in Ireland because the vendor, Microsoft, is a U.S. company—an effort that Microsoft, the European Union, and the Irish government are all resisting. The U.S. push for more access to data by law enforcement is running up against an increased emphasis on user privacy in Europe. Britain's recent decision to leave the European Union adds another layer of complication.

EdgeConneX first got involved in edge data centers by negotiating fiber telecommunications access to buildings and their tenants. “We know where the Internet truly is,” boasts Lawson-Shanks, claiming the company has rights in 46,000 buildings worldwide. “Network guys don’t share data, but they share it with us. We have a proprietary database with every piece of fiber in the country.”

What brought edge data centers into the mainstream? In a word, Netflix. About four years ago, Netflix exploded on the scene and started “destroying everyone’s backbone,” as Lawson-Shanks puts it, through its massive load of video data. At the same time, Comcast developed a cloud-based DVR service, based in Denver, and tested it out in the Chicago and Atlanta markets. It worked great, until it became too popular and put too much of a load on the Internet.

Enter EdgeConneX. Comcast asked if some of its buildings could be repurposed into data centers, with an over-the-top video ecosystem to offload traffic. “We built 23 of them in 18 months,” Lawson-Shanks says. “Now we have 30.” And wherever they’re built, they service major Internet sites such as Facebook, Netflix, Google, and Microsoft—75 percent of the Internet, he claims.

Similarly, Comcast needed to move to edge data centers when it implemented its Xfinity video on demand service. To deliver the required performance, the company rolled out approximately 75 identical data centers around a year and a half ago along the East Coast, according to Cooke.

(Related reading: Edge vs. central IT: Where do my apps and services belong?)

The latency problem

Flying packages to Memphis and then flying them to their destinations works for FedEx. Why doesn’t it work for data? First of all, Lawson-Shanks says, using an analogy, FedEx has more capacity in its aircraft than the Internet currently does. Second, “while a late package can be an inconvenience, it’s not as big a problem because of the way Internet protocols are designed."

In contrast, the typical Internet protocol TCP/IP works with email by chopping the message into pieces and sending them off using the best route available at the time, to be reassembled at their destination. But that doesn’t work for video and other high-performance applications—it ends up choppy.

Other industries that see value in edge data centers include retail, manufacturing, healthcare, and finance. Focus areas vary by industry. Retail typically runs in the cloud and is mostly about connecting to apps. Industrial companies tend to prioritize real-time process control and latency.

Healthcare and finance companies are more focused on government regulations and security. For these industries, it makes sense to process data locally because it's more secure than pushing it all to the cloud. In healthcare, fines for HIPAA security violations totaled $23 million in 2016, up from $6 million in 2015, and Cooke sees those growing. “It’s something that’s been on the rise but is not even near where it could be,” she warns.

How well does it work?

One EdgeConneX user is Cloudflare, a content delivery provider based in San Francisco. Cloudflare is collocated in a number of EdgeConneX data centers in cities such as Detroit, Salt Lake City, Sacramento, Las Vegas, and Phoenix, according to Nitin Rao, head of the company's infrastructure strategy team. Cloudflare operates in 102 cities in 50 countries and participates in 150 Internet exchanges, supporting 5 million websites. “Our job is not done in Frankfurt or San Jose,” Rao adds. “It’s just as important to make websites fast in Omaha, Sacramento, and Zagreb.”

Partnering with edge data centers helps improve performance for Cloudflare customers in several ways. First, it reduces traffic on the overall Internet, because Kansas City visits are now served by Kansas City, rather than by having to travel to Chicago where the data used to have to go. That reduces latency and improves performance. In addition, reducing the distance data travels improves security by reducing the number of potential attack points. Finally, it saves money. “Paradoxically, for a network like ours, it could be more cost-effective to build a bigger network than a smaller network,” says Rao.

How does Cloudflare choose a data center to partner with? To begin with, the company looks for fairly high security standards, noting that Cloudflare itself is compliant with the PCI Data Security Standard v3.1 specification.

After that, as the saying goes about real estate, it’s location, location, location. The most important feature of a data center is that it reaches the most local eyeballs. “Typically there’s one building in every city where every major ISP is, and it’s a no-brainer to show up there,” Rao says. “Network engineers know the addresses of the most important data center for every city by heart. It’s a clear winner-takes-all market.”

While Rao doesn’t have specific numbers for how much time or data his company has saved by using edge data centers, he offers a rule of thumb. Cloudflare is responsible for about 5 million websites, or 10 percent of the Internet in the U.S. Moving to an edge data center from a major interconnection point such as Chicago could reduce latency by 20 milliseconds. “If you can speed up a meaningful portion of 10 percent of the Internet by 20 milliseconds, that’s significant,” he says.

Time savings in countries in Eastern Europe and the Middle East can be even more significant, Rao says. “In Eastern Europe, until you have a data center in that country, traffic invariably falls to Frankfurt,” he says. For example, once his company set up a data center in Bucharest, many Romanian sites offered faster performance.

IoT will redefine the edge once again

While Netflix brought edge data centers into the mainstream, the next big push is likely to be the Internet of Things (IoT). Predictions are for more than 21 billion IoT data-collecting devices by 2020, and it’s not going to be realistic to ship all the data from billions of devices to the cloud, process it, and then send it all back. Instead, organizations will process data closer to the sensors and send just the analysis or conclusions to the cloud.

It remains unclear how edge data centers will evolve going forward. No matter what happens, data processing and analysis will become more distributed. The result could be a redefinition of the data center itself.

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