Cloud, 5G, and Edge Computing

Why

Cloud Computing is here to stay. Companies that provide Cloud Infrastructure will tend to do well over time. A couple of things will accelerate the migration to the Cloud:
  • Covid-19 has accelerated remote work which means more Cloud infrastructure is needed to support the additional remote workforce.
  • There are fewer and fewer places where the Cloud doesn't make sense especially as companies try to reduce Capital Expenditure.
  • Except for a few niches where for compliance reasons the infrastructure must be controlled and inhouse, most companies will use the Cloud especially as the economies of scale make it less useful to run your own data centers.

Technology Landscape

We are sort of in a transition period for Cloud Computing and programming in general. We completed the first phase which is migration to the Cloud and basically moving from running your own Linux or Windows machine to using a virtual machine on the Cloud. The next three phases are the following:

Kubernetes
As companies want to get more usage of their hardware they are moving to Kubernetes. Most Cloud Infrastructure companies support Kubernetes so I see a major migration to it for existing code since it makes it easier and more cost-effective to reduce costs. Further, Kubernetes prevents lockin so a lot of companies even if they are using AWS, Microsoft, or Google are all using Kubernetes to actually run their code.

Serverless
Soon we will be using Serverless technologies like AWS Lambda, Google Firebase, Azure Functions, etc. With coding schools and the proliferation of coders, a majority don't know anything about running servers, and most companies just want their coders to stop dicking around and solve business problems. I think this will be the next major change in the Cloud. This is also a higher margin business for the infrastructure providers so I see them spending more money to promote here.

WebAssembly / Edge Computing
This is another two years in the future but I think WebAssembly will be the primary technology for 5G/edge computing. This may be initially an extension of Serverless but I think WebAssembly is going to run code at the edge. i.e there will be data centers at cell tower sites where having a lot of servers won't make sense so there will be a need for efficient processing. WebAssembly solves this. You can already play with this technology with Cloudflare Workers where your code runs on 150 data centers around the world.


Economic / Geo-Political

Whatever country owns 5G will own a significant portion of new innovation in the next 10 years. The reason for this is the following: 5G is 100 gigabits per second or 100 times faster than 4G with lower latency. Think streaming a 4K video while driving in your car with no buffering. This means industrial, medical, and business applications will start showing up which will create a whole new set of innovations.

This is one of the reasons that Huawei was banned in America. We don't want China to own the hardware infrastructure! However, the biggest pitfall I see is we don't have chip fabs in America and China is asserting its dominance in the South China Sea meaning if we do go to war with China we may be fucked in terms of us not having chips.


Companies

Cloud Infrastructure
These companies are the building blocks of the Cloud. They are infrastructure since their whole role is to abstract the actual hardware to be accessible easily. Amazon and Microsoft own the cloud. Everyone else is secondary and are getting left further and further behind. Everyone, else may fulfill a niche.

  • Long
    • Amazon → Most of their money comes from AWS, not Amazon.com
    • Microsoft → Moving most of their software including Office to Azure.
  • Niche (Maybe Long?)
    • NetApp → Storage heavy applications
    • IBM → Legacy financial
    • Google → AI
    • Oracle → Legacy enterprise
    • Vmware → Legacy enterprise since they are owned by Dell
    • Salesforce → Sales heavy workloads. They own Heroku which a lot of startups also use.
    • Adobe → Design and Marketing related Cloud.
  • Short
    • Intel → AWS is starting to design their own chips which are faster than Intel's and they don't have to pay Intel for the license. Apple is also migrating off Intel to its own chips. Intel might be fucked in the next 5 years since a majority of their revenue comes from data center chips.
DevOps / Cloud Maintenance
These are the companies that make it easy to manage Cloud Infrastructure. This is the layer that most companies care about since it entails the performance of their applications and developer productivity. These companies have a moat since they work among different Cloud providers. Also, these companies tend to have amazingly high margins. These have developer love at the moment and almost every company I have done for uses one of these companies.
  • Long
    • Datadog → Application logging and metrics.
    • New Relic → Application monitoring and logging
    • Pagerduty → Application uptime reminders.
    • Splunk → Application logs and security
Cloud Security
As more and more people move to the Cloud security is a concern. These companies work on ensuring Cloud applications are safe. They watch for hackers, create security parameters, access controls, etc. These will start taking up bigger roles especially among larger companies that are always freaked out about security.

  • Long
    • Crowdstrike → Firewalls and Cloud Security
    • Okta → Access control for employees, single sign-on
    • FireEye → Security monitoring
    • Palo Alto Networks → Application and Cloud security
    • F5 Networks → Firewall, DDoS, Nginx which basically runs every damn website.
    • Cloudflare → CDN, Edge security, and firewall. DDoS protection
AI
AWS, Google, and Microsoft are all working on AI-related software but the primary company to watch for hardware is Nvidia. Nvidia basically owns the AI hardware market. Secondarily, AMD has a good chance since they also make graphics cards but Nvidia is actively producing AI chips. All the cloud providers use Nvidia chips for AI hardware except Google which has a Tensor chip.
  • Long
    • Nvidia
  • Maybe
    • AMD
5G Infrastructure
5G Infrastructure is still being built out. These are companies that are working on installations, hardware, and other technologies. I think the lower-level stuff is more commodity but I think there will be some value here before they get commoditized.
  • Long
    • Ericson
    • Nokia
    • Parallel Wireless
    • Mavenir
    • Altiostar
    • Qualcomm
    • Skyworks
Edge Computing
The main value for 5G is going to be the companies providing the technology that runs on top of the Edge. These are companies that are able to run code near cell towers as opposed to distant data centers, IoT devices, CDNs.

As we move more and more to 5G the computation has to move to the edge because the speed of light becomes an issue in user interfaces. Right now if we make a request they can go to one of many data centers run by AWS, Microsoft, etc. but that is too slow as we start to use 5G. Computation has to move to the Edge. AWS is starting to push this as well with AWS Wavelength but some of the companies below already have a large infrastructure.

  • Long
    • Cloudflare
    • Fastly
    • Twilio
    • Verizon