Before you buy a stock, it's important to understand the business, and that often means learning some jargon. For instance, "edge computing" are popular buzzwords in the tech sector right now, but what does that term actually mean? In this Backstage Pass video, which was recorded on Oct. 15, 2021, Motley Fool editor/analyst Olivia Zitkus and contributor Trevor Jennewine explain the concept of edge computing.
Olivia Zitkus: One of the other big things that just comes to mind while we're doing this overview, especially this visual I think is really helpful because you can set apart one of the taglines that you'll see with a lot of these companies is like "edge computing." And I think people look at that and just think, "What is that?" I can barely even think of a good sentence at the end of the day for what general computing might be. But for edge computing at the basic level, that's all about bringing all the computation and data storage closer to the devices where it's actually being gathered, and not relying on some other central location that could be thousands of miles away. Is that accurate? I know that's another term when that comes down to this.
Trevor Jennewine: Right, yeah. I probably should have cleared that up before we started. Edge computing, the best way to think of it is: If you're visiting a website and that website is coming from a company, you are the end-user, and the website, whoever owns that website, is the host.
Cloudflare (NYSE:NET) sits in between the host and you, and a lot of times the content itself is actually coming from Cloudflare, so it is physically closer to you. We don't think about it a lot, but it actually takes time for data to move through the internet. And by positioning its servers closer to you, Cloudflare can make that content faster.
The way that it positions its servers closer to you is its servers are positioned near internet exchange points, and these are massive intersection points of the internet. The internet is a network of networks. All of those individual networks intersect at different points around the globe. By having its servers positioned right there, Cloudflare actually has its technology positioned within 50 milliseconds of 95% of internet users in the world. That's how I think about edge computing.
Olivia Zitkus: Yeah! That's the closer to the edge of the edge in edge computing.