Edge cloud may be a new buzz phrase for many readers. It involves moving data stored in the cloud closer to home. This has many benefits for users. Johanna Egar explains why it is a fast growing trend

Cloud computing uses remote computers to store data and, nowadays, for data processing too. It serves a whole range of computing applications, including mobile ones. Edge cloud brings these services closer to home by housing cloud data centres in New Zealand rather than hundreds of kilometres away. 

The value of edge cloud (also called edge computing) is that fewer hops are involved when accessing data. This matters when you need fast access to, say, video, data analytics or IoT (Internet of Things) applications, or for online gaming. A local data centre means less latency and better reliability.

Latency is a big issue with distant cloud data centres. Online gamers in particular notice this, but so do Netflix watchers faced with buffering while watching movies. Latency can also interfere with online transactions. Delays of 150 milliseconds are common when data travels over international cable. Your data can go to and from the US via Japan or even Guam, depending on your cloud provider’s cable arrangements.

It’s all about the number of hops. Even a Sydney-based cloud data centre can be 23 milliseconds away. Here’s why: say you’re playing online chess, when you make a move, your data first hops to the local telecoms cabinet up the road. It then hops to a central cabinet, say the one on Auckland’s Mayoral Drive, and thence on to the trans-Tasman cable. It then hops across the Tasman to Sydney’s Botany Bay and then to a data centre in the city. That’s at least five hops. Routers are fast, but they have limits.

You can see why edge cloud is a growing trend. Ten years ago, your data would be stored in the US, then it moved closer, to data centres in Singapore, then to Sydney. Now it is coming home – to data centres in Auckland, Wellington and Christchurch; even Hamilton and Invercargill.

One example of how this works is where Vocus offers business customers a direct link to Microsoft Azure Servers [the computing resources service] from its Auckland data centre. This means users no longer have to access Azure’s services via Vocus’ Sydney data centre.

The big cloud service companies, Microsoft, Google and AWS (Amazon Web Services) often co-locate using others’ data centres. This is helping bring cloud services closer to all New Zealanders. For instance, local telcos Spark and Kordia both now have data centres offering co-location as far south as Invercargill. And Datacom has a mall-sized data centre in Hamilton.

Small data centres are also springing up, such as Chorus’ Edge Centres. There are three of these data centres now, in Auckland, Wellington and Christchurch. They are housed in Chorus’ old telephone exchanges – there are 600 of these literally house-sized exchanges around the country.

Chorus network strategy manager Kurt Rodgers says what began as a small project two years ago is growing because of the trend towards edge cloud “but the irony is our data centres aren’t out at the edge yet, in the regions.”

However, edge cloud data centres

could eventually operate on the very edge – from the top of cell towers or roadside cabinets. Rodgers points to the advent of 5G, the fifth generation mobile technology needed for the much-talked-about autonomous cars.

The data associated with their use must be processed within a few milliseconds. “And for this your server needs to be local, less than 100 kilometres away,” says Rodgers. 

Kurt Rodgers, Chorus network strategy manager, and Matt Harris, Chorus product owner - Core Networks


Rodgers says we got our first taste of cloud computing – and the distance problem – with the early content delivery networks (CDNs) that delivered video over the internet. YouTube videos inadvertently showcased the problem with all their jerks and waits as you waited for a video to catch up with itself. Caching, which sees popular data stored for quick, easy access, has helped solve this, along with bringing cached data closer to home by housing it in local data centres.

Data-hungry websites like Trade Me, Stuff and the NZ Herald use caching to make their sites work more efficiently.

Latency matters for other business uses too. Anything transactional, such as booking a flight on Air New Zealand’s website, requires low latency, as does online shopping.


Latency isn’t the only issue edge cloud addresses. Cost is another, especially when it comes to high bandwidth applications. You don’t want to pay for such data to be taken out of the country and then brought back to New Zealand.

An example of this would be sending security video footage to, say, Sydney for analysis. As well as being expensive, there might be quality issues if the footage is downgraded to contain costs. Rodgers says there isn’t a lot of demand for this kind of service yet but will be soon with new ‘smart city’ and IoT applications – see below.

Another reason to choose a local cloud data centre is reliability. If your cloud storage is oceans away you are more at risk from unpredictable power outages. Experts say these are more common than users realise. A high-profile example, in 2012, saw power in AWS’ Virginia data centre knocked out by an electrical storm. Affected customers included Netflix, Instagram and Pinterest.

For an extra fee AWS will back up your data to other data centres around the world, but this is beyond many users’ budgets. However, local data centres are starting to offer similar back-up services. For example, Datacom now has four local data centres and it advertises its Hamilton data centre as providing a reliable back up for its Auckland data centre 130kms away – far enough away that a second data back-up could survive a big storm or even an earthquake.

There are also legal, commercial and political reasons why some organisations prefer not to store their data offshore (e.g. government departments and legal firms). They may have sensitive data, so need to host it locally. New Zealand law requires such data be stored in a trusted place and takes a dim view of it being stored randomly around the world.

There can be commercial concerns too. For example, New Zealand has a lot of patented new food technologies and data around these needs to be closely guarded. This means local storage as other countries don’t always have the same strict privacy laws as us.


Green issues are also becoming important. New Zealand scores here with much of our electricity being renewable as it is hydro-generated. This is not the case in Australia, for example – 73 percent of its energy comes from coal. This is one reason why Iceland is popular for cloud storage – it’s not only cold, so servers need less cooling, but its energy is renewable as it is generated from geothermal vents.

International data centres’ energy consumption is a growing issue. They now consume about three percent of the global electricity supply and account for two percent of all greenhouse gas emissions. They have the same carbon footprint as the airline industry. Perhaps this argues for chilly Invercargill as a cloud centre –

it already has two big data centres and two new hydro stations promised for the end of the year.


CCTV is driving the explosion in edge cloud use, says Chorus’ Rodgers. We haven’t seen much of it here yet, but it’s already huge in the UK and China. However, this isn’t only closed circuit security video, it runs on the internet and has many uses beyond guarding the shop. It also uses AI to analyse the video generated.

Facial recognition software is a controversial example of this, but there are more benign examples, including ‘smart city’ ones. Our cities are becoming smarter, developing digital nervous systems that make them work better. One example of this is congestion charging. This uses cameras and automatic number-plate recognition software to monitor traffic and charge drivers a fee to enter city centres at busy times, so reducing car numbers.

It’s not all about the cameras though. It’s the analysis that matters. Dunedin IoT specialist Tussock Innovation provides an example here with Waterwatch, its sensor-based remote water monitoring technology. Construction company Downer is using this on its Auckland construction sites to monitor water outflow speed to ensure it’s not too fast for its sand filtration system. It wants to make sure surrounding waterways’ fragile ecosystems aren’t harmed by dirty run-off.

Waterwatch involves a lot of data analysis. Tracking data is sent to the cloud for recording and this data is then graphed against legal compliance requirements.

Rodgers says we will soon face even more demanding data analytics requirements with the advent of autonomous cars. These really will need local cloud storage as the data associated with the cars’ use must be processed within a few milliseconds, he says.

“For this we will need hundreds of edge cloud sites around New Zealand if we’re going to respond in a millisecond.”

Small, local edge cloud servers could be one solution. Chorus' 600 or so exchanges around the country could be readily adapted to suit. Most New Zealanders live within 7kms of their local exchange, so they could form the basis of a nationwide edge cloud network. They will need upgrading (three have been already) but they are already connected to fibre.

Matt Harris, manager of this ‘Edge Centre’ initiative, says while a big roll-out isn’t planned, there have already been “good expressions of interest”.

“The aim is to encourage people to put their data centres here rather than in Sydney. A lot of this traffic is already going through our UFB network, so it is a good proposition for people. We want to provide local businesses with a better cloud service without needing to go overseas.”

Rodgers says that “while we can’t say with 100 percent certainty how edge computing demand will play out, with 5G coming, increased workloads and autonomous vehicles, demand is likely to grow.”