Global Edge Data Center Market By Component (Solution and Services) By Enterprise Size (SMEs and Large Enterprises) By Industry Vertical (IT & Telecom, BFSI, Healthcare, Manufacturing, Government & Public Sector, Automotive, Other Industry Verticals), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032
- Published date: Nov. 2023
- Report ID: 105342
- Number of Pages: 213
- Format:
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Report Overview
The Global Edge Data Center Market is anticipated to achieve a value of roughly USD 51.0 Billion by 2032, a substantial rise from its 2023 value of USD 10.4 Billion. This progress is expected to unfold at a compound annual growth rate (CAGR) of 19.9% during the projection period from 2023 to 2032.
An edge data center constitutes a distinct computing infrastructure that strategically situates data processing close to the origin of data generation and its subsequent utilization. These diverge from conventional data centers, which are often centralized and geographically distant from end-users.
The fundamental essence of edge data centers lies in their strategic placement at the periphery or “edge” of the network, where data originates and is most immediately required. This geographical proximity engenders a series of advantages, most notably in reduced latency, heightened responsiveness, and optimized performance for applications and services reliant on real-time data processing.
Note: The figures presented here are subject to change in the final report.
The surge in the adoption of edge data centers is attributable to a convergence of pivotal factors. Foremost among these factors is the imperative to curtail latency. Applications with stringent latency requirements, such as IoT devices, autonomous vehicles, and real-time analytics frameworks, necessitate swift processing. Edge data centers address this difficulty by curtailing the temporal span that data traverses between its point of origin and the processing juncture, thus yielding a substantial reduction in latency.
Key Takeaways
- Market Overview: The Edge Data Center Market is projected to reach USD 51.0 billion by 2032, with a CAGR of 19.9%, providing reduced latency and optimized performance for real-time data processing applications.
- Driving Factors: Growing demand for cloud computing, big data analytics, and IoT, along with virtualization and data security emphasis, fuel market growth.
- Restraining Factors: High initial costs and limited physical space hinder market accessibility, especially for smaller businesses.
- By Component: Solutions held the largest market share of 81.2% in 2022, offering comprehensive data center infrastructure integration.
- By Enterprise Size: Large enterprises dominated the market in 2022, requiring robust data center infrastructure to manage complex IT needs and drive digital transformation.
- By Industry Vertical: The IT and telecom sector held the largest revenue share in 2022, followed by manufacturing and automotive, driven by the adoption of transformative technologies like 5G and edge computing.
- Regional Analysis: North America currently leads, while Asia Pacific anticipates the highest growth rate, focusing on reducing latency and enhancing application performance.
- Key Market Players: IBM, NVIDIA, Dell, Cisco, and Fujitsu, among others, actively contribute to the development of edge data centers, offering diverse hardware and software solutions for efficient data processing.
Driving Factors
Growing Demand for Cloud Computing Services, the Rise of Big Data Analytics, and the Internet of Things (IoT)
The factors driving the edge data center market encompass a range of effects. These include the rising enthusiasm for cloud computing services, the rise of big data analytics and the Internet of Things (IoT), and the pressing need for efficient data management and storage remedies. Further contributing are the mounting acceptance of virtualization and software-driven infrastructure, the increasing emphasis on data security and regulatory observance, and the maturing presence of edge computing and hybrid cloud frameworks.
Additionally, the rapid expansion of digital content and social platforms, along with the escalating dependence on mobile devices and digital services, is generating an extensive surge in data, catalyzing the call for more powerful and expandable data center solutions. Overall, the edge data center market stands on the brink of substantial expansion, driven by enterprises aiming to harness data’s potential to spur innovation and attain a competitive edge.
Restraining Factors
High Initial Cost and Limited Physical Space
The initial costs associated with setting up and running data centers pose a significant barrier. This encompasses substantial investments in infrastructure, equipment, security measures, and cooling systems. Such financial demands can prevent smaller businesses from entering the market and potentially burden the budgets of even larger enterprises.
Moreover, the challenge of securing suitable physical space further compounds the situation. Particularly in urban places where available real estate is rare and costly, the search for appropriate data center locations becomes forced. This shortage can impede the potential expansion of data center facilities, thereby adding another layer of complexity to the industry landscape.
By Component Analysis
The solution Segment is Dominant in the Global Edge Data Center Market.
Based on components, the market is further divided into solutions and services. Among these, solutions held the largest market share of 81.2% in 2022. This is due to its comprehensive offerings that cover various aspects of data center infrastructure, seamlessly integrating hardware and software.
The edge data center industry is anticipated to remain under its influence throughout the predicted timeframe. This segment encompasses hardware and software offerings, including IT racks, enclosures, network equipment, data center management software, and analytics tools.
By Enterprise Size Analysis
The Large Enterprises Segment Dominated the Global Edge Data Center Market In 2022
The market is further segmented into SMEs and large enterprises based on enterprise size. The large enterprises segment will hold the largest share in 2022. In the global edge data center market, the dominant segment is Large Enterprises. This is due to their extensive operations, financial resources, diverse workloads, and global presence.
These organizations require versatile and robust data center infrastructure to manage complex IT needs, comply with regulations, and drive digital transformation. Their need for high availability, security, and competitive advantage further solidifies this dominance. Large enterprises’ intricate requirements and capabilities contribute to their demand for advanced data center solutions.
Note: The figures presented here are subject to change in the final report.
By Industry Vertical Analysis
The IT and telecom sectors hold the Largest revenue share in 2022
Based on industry verticals, the global edge data center market is segmented into sectors like IT and telecom, manufacturing, automotive, BFSI, government, healthcare, and other industry verticals. The IT and telecom segment held a large revenue share of 36.7% in 2022. It is expected to maintain prominence due to adopting transformative technologies like IoT, 5G, AR/VR, and AI/ML. These advancements necessitate low latency and extensive data processing, driving the demand for edge data centers.
The manufacturing and automotive sectors are poised to witness rapid growth, driven by adopting technologies like 5G and edge computing. These technologies cater to the sector’s need for high bandwidth, low latency, and secure mobile applications. Edge data centers are revolutionizing these industries by enabling real-time analysis and control, reducing errors, enhancing efficiency, and ensuring safety.
Key Market Segments
Based on Component
- Solution
- Services
Based on Enterprise Size
- SMEs
- Large Enterprises
Based On Industry Vertical
- IT & Telecom
- Manufacturing
- Government & Public Sector
- Healthcare
- Automotive
- BFSI
- Other Industry Verticals
Growth Opportunities
Growing Cloud Services Adoption
The rapid shift towards cloud-based services, encompassing infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS), is propelling a surge in demand for data centers specialized in hosting and managing these services. This rising adoption of cloud solutions by businesses and organizations prompts data center providers to expand their offerings to provide for various cloud models.
Latest Trends
Rise in 5G Technology and Advancements in Technologies Such as Artificial Intelligence
The deployment of 5G networks has spurred a demand surge for edge data centers. These centers play a pivotal role in meeting the heightened data processing needs and low-latency imperatives imposed by applications harnessing the power of 5G, including real-time video streaming and IoT devices. Similarly, integrating artificial intelligence (AI) functionalities into edge data centers has gained notable traction. This integration empowers these centers to process data locally, furnishing immediate insights without dependency on centralized cloud infrastructures. This development is significant for domains like industrial automation, autonomous vehicles, and surveillance, enhancing operational efficiency and real-time decision-making capabilities.
Regional Analysis
North America is the Dominant Region in the Global Edge Data Center Market
In 2022, North America held the leading position in the global edge data center market, with a significant market share of 32.3%. The adoption of edge data centers in North America is propelled by diverse factors, including the necessity to cater to emerging technologies like 5G, IoT, and AI, all of which demand low latency and high-speed connections. Edge data centers, by bringing data processing and storage resources closer to end users, remarkably mitigate latency, thereby considerably enhancing application and service performance.
Asia Pacific anticipates the highest growth rate, 19.3%, attributed to IT investments, edge computing players, and urbanization. Edge data centers address connectivity demands by reducing latency and enhancing service quality.
Note: The figures presented here are subject to change in the final report.
Key Regions and Countries Covered in this Report:
- North America
- The US
- Canada
- Europe
- Germany
- France
- The UK
- Spain
- Italy
- Russia & CIS
- Rest of Europe
- APAC
- China
- Japan
- South Korea
- India
- Rest of APAC
- Latin America
- Brazil
- Mexico
- Rest of Latin America
- Middle East & Africa
- GCC
- South Africa
- Rest of MEA
Key Players Analysis
Key players in the market, including IBM Corporation, NVIDIA Corporation, Dell Technologies, Cisco Systems Inc., Fujitsu Limited., Eaton Corporation Plc, 365 Data Centers Service, LLC, Huawei Technologies Co, Ltd., Schneider Electric SE, and Vertiv Group Corp., were actively engaged in research and development of edge data centers. These companies offer diverse solutions, from hardware to software, for efficient edge data processing. Firms like EdgeConneX and Equinix also contribute to edge data center deployments and interconnection solutions. The landscape remains dynamic, with potential newcomers shaping the evolving market.
Market Key Players
- IBM Corporation
- NVIDIA Corporation
- Dell Technologies
- Cisco Systems Inc.
- Fujitsu Limited
- Eaton Corporation Plc
- 365 Data Centers Service, LLC
- Huawei Technologies Co, Ltd.
- Schneider Electric SE
- Vertiv Group Corp
- Other Key Players
Recent Developments
- In May 2023, NVIDIA unveiled a modular reference design to enable quick and economical manufacturing of more than 100 servers tailored for AI, high-performance computing, and Omniverse tasks. This effort, featuring the NVIDIA MGXTM server blueprint, adeptly caters to accelerated computing demands, marking a significant stride in meeting the changing needs of the worldwide edge data center industry.
- In August 2021, the organization unveiled NVIDIA AI Enterprise, a comprehensive set of AI solutions and frameworks. This release allows enterprises worldwide to utilize AI on VMware vSphere and widely accepted servers, contributing to recent advancements in catering to the burgeoning demands of the global edge data center market.
Report Scope
Report Features Description Market Value (2023) US$ 10.4 Bn Forecast Revenue (2032) US$ 51.0 Bn CAGR (2023-2032) 19.9% Base Year for Estimation 2022 Historic Period 2016-2022 Forecast Period 2023-2032 Report Coverage Revenue Forecast, Market Dynamics, COVID-19 Impact, Competitive Landscape, Recent Developments Segments Covered By Component (Solution and Services) By Enterprise Size (SMEs and Large Enterprises), By Industry Vertical (IT & Telecom, BFSI, Healthcare, Manufacturing, Government & Public Sector, Automotive, and Other Industry Verticals) Regional Analysis North America – The U.S. & Canada; Europe – Germany, France, The UK, Spain, Italy, Russia, Netherlands & Rest of Europe; APAC- China, Japan, South Korea, India, Australia, New Zealand, Singapore, Thailand, Vietnam & Rest of APAC; Latin America- Brazil, Mexico & Rest of Latin America; Middle East & Africa- South Africa, Saudi Arabia, UAE & Rest of MEA Competitive Landscape IBM Corporation, NVIDIA Corporation, Dell Technologies, Cisco Systems Inc., Dell Inc., Fujitsu Limited, Eaton Corporation Plc, 365 Data Centers Service, LLC, Huawei Technologies Co., Ltd., Schneider Electric SE, Vertiv Group Corp, Other Key Players Customization Scope Customization for segments, region/country-level will be provided. Moreover, additional customization can be done based on the requirements. Purchase Options We have three licenses to opt for Single User License, Multi-User License (Up to 5 Users), Corporate Use License (Unlimited User and Printable PDF) Frequently Asked Questions (FAQ)
What is the Edge Data Center Market?The Edge Data Center market refers to the sector focused on providing data processing and storage capabilities closer to the location where data is generated. Edge Data Centers facilitate low-latency processing, enabling efficient and real-time data analysis for applications that require immediate insights and decision-making.
How big is the Edge Data Market?The Global Edge Data Center Market is anticipated to achieve a value of roughly USD 51.0 Billion by 2032, a substantial rise from its 2023 value of USD 10.4 Billion. This progress is expected to unfold at a compound annual growth rate (CAGR) of 19.9% during the projection period from 2023 to 2032.
What is the growth in Edge Data Centers?The growth in Edge Data Centers is significant, primarily driven by the increasing adoption of IoT devices, the demand for faster data processing, the rise of 5G technology, and the necessity for localized data storage and analysis. This expansion is expected to continue as more organizations recognize the benefits of decentralized data processing and storage.
What is the difference between Hyperscale and Edge Data Centers?Hyperscale data centers are large-scale facilities built to accommodate massive data storage and processing requirements, usually serving a broader geographical region. In contrast, Edge Data Centers are smaller, decentralized facilities located closer to the point of data generation, enabling low-latency computing and faster data analysis for specific localities or regions.
Who owns Leading Edge Data Centers?Leading Edge Data Centers are owned by various companies and organizations operating in the data center and telecommunications industry. The market includes a diverse range of players, from large corporations to specialized data center providers and telecommunication firms, each contributing to the expansion and development of Edge Data Centers.
- IBM Corporation
- NVIDIA Corporation
- Dell Technologies
- Cisco Systems Inc.
- Fujitsu Limited
- Eaton Corporation Plc
- 365 Data Centers Service, LLC
- Huawei Technologies Co, Ltd.
- Schneider Electric SE. Company Profile
- Vertiv Group Corp
- Other Key Players
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