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With the latest improvements in networking technology and code portability, hyperscale cloud providers have extended their hybrid cloud offerings to the edge. But these technological advancements have also given rise to the next batch of competitors.

Recent Forrester research highlights the edge as the next cloud frontier. It explores how a mix of networking and colocation vendors plan to compete in this emerging space. They're pursuing an edge computing strategy that bundles their spare compute capacity and new technologies to offer cloud-like compute services that could give the hyperscalers a run for their money.

"In three to five years, the edge will become the next hybrid cloud target architecture as firms seek to act on their customers' behalf using voice, image and video at scale," Forrester analyst Brian Hopkins writes in a recent report, "Trend: Cloud Strategies Shift Towards the Edge." (The full report is available here, though it's paywalled for members only.)

The public cloud vendors will respond by expanding their converged edge infrastructure and existing partnerships, according to the report. For the most part, the major cloud providers have viewed the edge as an extension of their hybrid cloud architectures -- you run their same cloud-hosted services, on premises and now at the edge. Specifically, AWS and Microsoft extended edge capabilities to packaged hardware and software through offerings like AWS Outposts and Azure Stack, respectively. IT teams can also use newer cloud services like Azure Arc and Google Anthos to centrally and uniformly manage edge computing as part of a broader IT footprint.

Competition is good for users, Hopkins notes. Containerization technologies like Kubernetes and Docker enable code portability, so organizations can deploy the same code to different locations. These advancements open the door to more edge computing possibilities, and cloud and edge vendors alike have embraced containers to capitalize on this market.

The networking vendors and colocation providers are making the case that the best place to deploy at the edge isn't with the cloud providers but with them, since they've been operating at the edge for years. Let's look at how this edge computing strategy has evolved and how it differs from the approach of the big cloud providers.

Hopkins says the vendors that could challenge the big cloud providers cover three broad categories -- content delivery networks (CDN), colocation and telecommunication. To compete with the major cloud providers, these edge vendors have realized they can offer their own compute services.

Over the past five years, CDN vendors -- such as Akami, Fastly, Limelight Networks and CenturyLink -- have quietly added cloud-like services IT teams can flexibly provision at scale, Hopkins said.

These vendors rely on points of presence, which are clusters of compute capability, prepositioned close to the user to cache content and provide high performance throughput, Hopkins said. These CDN vendors have developed points of presence all over the world to support existing usage such as video streaming. But customers eventually needed additional services for things like disk caching, load balancing and security.

"And then what they discovered is clients who were using all those services also wanted to be able to build code and deploy that code to their points of presence," Hopkins said in an interview. Services such as CenturyLink's CDN Edge Compute and Akami EdgeWorkers work in a similar fashion to serverless and function as a service (FaaS) offerings, which can be used to spin up web apps and power streaming content close to the user.

Colocation vendors have similarly evolved to offer cloud-like compute services. These companies, such as Equinix, started as an alternative place to host your servers so you don't have to worry about wiring, air conditioning and other considerations associated with owning your own data center. And to improve connectivity to the cloud, colocation vendors placed data centers close to where the main cloud data centers reside, Hopkins said.

Colocation companies then dropped data centers in secondary cities and eventually created a web of facilities around the world. Through high connectivity, whether wired or wireless, this web operates as a fabric that enterprises can build services on, Hopkins said. Now, you can deploy code to these vendors' fabric of data centers, in a similar way as with CDN services.

Finally, telcos like AT&T and Verizon, which tried and failed to build a portfolio of cloud services in the 2010s, are utilizing excess edge compute capacity in the servers in their mobile base stations, smart cable boxes and homes, Hopkins said. They can offer that compute as cloud-like services for running software. And when available, 5G should only boost these capabilities.

The big cloud providers haven't been idle, but their edge computing strategy is fundamentally different. "The cloud vendors -- Azure and AWS, specifically -- their edge strategy is primarily to make their cloud services available in more of these localized edge environments," Hopkins said.

Through AWS Outposts and Azure Stack Edge, they can push cloud compute to the edge. This is a converged hardware strategy, extending their cloud -- their services and infrastructure -- to the edge.

They've also partnered with telcos to offer their own edge services like AWS Wavelength and Azure Edge Zones. And in a bid to counter telco's 5G, cloud vendors have looked to launch and connect their cloud to satellites, which could offer the connectivity of 5G, without laying miles and miles of millimeter wave antennas, Hopkins said.

"Now, we're not saying that the big cloud providers are going to completely lose their dominance in the 2020s, but we think that is a disruptive threat [from these other competitors]," Hopkins said.

Google and IBM also have partnerships with the major telcos around 5G, but they've otherwise taken a different approach to competing in the edge computing market -- at least for now. Rather than selling their own appliances and trying to compete directly against network and colocation vendors, they've emphasized containers and flexible deployment models that theoretically work in any environment.

And while Microsoft has emphasized the use of converged hardware with Azure Stack, it could ultimately follow a similar path as Google. Azure Arc extends Microsoft's cloud services and management to edge locations through software. However, only parts of the service are generally available as of publication, so it's too soon to say exactly what impact it could have on the market.

The hyperscalers have firmly established themselves in the enterprise market, but these other providers have some strategic advantages with their global network of locations and experience at the edge. Ultimately, customers will have to evaluate the price and availability of the various services, and decide which edge compute services are the best fit for their specific edge computing strategy.

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Edge computing strategies will determine the next cloud frontier - TechTarget