The numbers don’t lie. Businesses need data and edge. Here’s how to do it right.
We’ve seen this movie before
Last weekend we had a family movie night at our house. We had so much fun, apart from the part where we had to come up with a movie that we all wanted to see together. After a few rounds of ideas, we hit rock-paper-scissors on Netflix to make the final selection from the plethora of instantly available movie options—with bespoke recommendations included. It occurred to me that the same scenario would have played out very differently when I was younger. Then we went to a Blockbuster brick and mortar store to rent a movie. Back then, Netflix was just a fledgling company struggling to survive.
Back in 2000, the now infamous event of Blockbuster turning down Netflix’s offer to be acquired for $50 million foretold the events unfolding around us today. Data-first, data-anywhere companies are winning – with exceptional margins – and outperforming laggards. We’ve seen this movie before. Blockbuster went bankrupt in 2010 while Netflix soared, reporting 222 million subscribers and nearly $26.7 billion in annual revenue in 2021.
The data decade
Netflix knew then, which many of us have since discovered. Their novel business model launched what Dell Technologies calls “the data decade.” Data companies have taken the world by storm, surpassing others by miles. The Nasdaq 100 shows us history.
See also: An overview of edge computing
The Nasdaq 100 is a large-cap growth index. Using market capitalization as a criterion, the index includes 100 of the largest non-financial companies listed on the Nasdaq exchange. According to recent data, the companies with the largest market caps are all data-first, data-anywhere companies: Apple, Microsoft, Google, and Amazon. Their collective market cap is around $10 trillion, which accounts for 67% of the value of entire Nasdaq-100. This means that the market capitalization of the other 95 companies listed in the Nasdaq-100 is only 1/3 of the total value of the index. The value of these top companies – digital and data companies – significantly outperforms other leading global companies.
Data companies win
The truth is, whether we realize it or not, every company is a data company. Those who harness the power of data will increasingly outperform the competition and drive business results.
Tesla is an incredible example, winning the race through the use of data, artificial intelligence (AI), and the Internet of Things (IoT). Tesla collects data from all of its vehicles and drivers using internal and external sensors. This data is used to continually improve Tesla’s self-driving assistance system, train its vehicles with AI/ML, and provide value to Tesla’s customers. And the market value of the data itself is enormous. McKinsey and co estimate that data collected from vehicles will be worth $750 billion a year by 2030.
Tesla’s market capitalization as the #6 company on the Nasdaq-100 is $1.204 billion. That’s 4.6 times more than its closest automotive competitor, Toyota, which is valued at $262 billion. The numbers don’t lie. Data companies are crowding out the competition.
What does the edge have to do with it?
In all industries, data is a competitive differentiator. But not all data has the same value.
Data at the edge refers to data collected “in one place” from IoT devices or sensors, such as in industrial plants, vehicles, or smart buildings. The volume of IoT data collection devices is skyrocketing, leading to a corresponding exponential growth in data and edge computing. At the same time, these devices increase the value of this “new” data to generate richer, deeper, and more timely insights that help transform business outcomes and improve lives.
For example, retail stores can use sensors and cameras to charge shoppers for items and automatically charge their credit cards without a cashier. (Read more about it here). Smart cities can use edge computing to improve energy efficiency through lighting controls that operate lights for maximum efficiency and public safety. Manufacturing can use sensors to safely control operations or be warned of impending equipment failure before you appear. (Read more about it here). Or in healthcare, wearable devices can provide medical professionals with patient data proactive Patient condition monitoring and communication.
give companies an advantage
Edge adoption is skyrocketing and is projected to reach $168 billion by 2030 at a CAGR of 24.51%. Companies that use edge computing to process data at the edge are the pioneers of tomorrow. The Edge provides the ability to analyze new data and turn it into valuable, actionable insights—nearly real-time. But not all data at the edge needs to be processed and analyzed immediately. Alternatively, the Edge can also be used to ingest new data, minify it and store it in the cloud for later use. This data and its insights not only provide internal business value and competitive advantage, but also provide external market value to others and can be monetized for the greater good.
The advantage gives companies around the world an edge. It is still in the early stages of its launch and is creating a lot of energy, excitement and possibilities for the future. The development of edge computing offers powerful opportunities to industries around the world. Blockbuster taught us well that this is not a film to watch and watch; It’s a movement to be a part of, starting today.
To learn more about the edge in a short video, click here.