Edge Computing Market

[129 Pages Report] The overall edge computing market is expected to grow from USD 1.17 billion in 2016 to USD 6.73 billion by 2022, at a CAGR of 35.4% from 2017 to 2022. Organization of different size and from different industry verticals are deploying innovative applications, such as Augmented Reality/Virtual Reality (AR/VR), personal assistants, and predictive monitoring to stay ahead in today’s technological era. Edge computing assists real-time applications in processing and analyzing data collected from various sensors and connected devices, at the edge of the network. It helps in reducing latency and thereby, provides a faster response to the critical applications. The data transmitted from the sensors and devices is stored and processed on the edge of the network, close to the devices, instead of transferring it to the cloud or data centers located miles away from the connected devices. Furthermore, the fast growth and increasing adoption of IoT within organizations is expected to aid the market. The base year considered for the study is 2016, and the forecast has been provided for the period between 2017 and 2022.

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Edge Computing Market Dynamics

Drivers

• Growing load on cloud infrastructure
• Wide range of applications in different industries
• Increase in the number of different applications

Restraints

• Security and privacy concerns related to edge computing

Opportunities

• Advent of the 5G network

Challenges

• Inadequate industry standards and interoperability issues

Growing focus of organizations to enhance customer experience in retail vertical is expected to drive the global edge computing market

The retail segment is likely to be the fastest growing vertical in terms of adoption of edge computing during the forecast period. Organizations from this vertical are undergoing a significant transformation owing to the technological advancements in place. The emergence of IoT is further contributing to the digital transformation in the vertical and changing the traditional retail practices. Retail organizations are intensely focusing on offering tailored solutions to customers and enhance their experience and satisfaction. With the edge computing solutions, retailers have gained high scalability and network flexibility. Digital shopping carts, social shopping tools, in-store videos, and digital signage are becoming common in the stores. Augmented reality and virtual reality technologies are said to be further transforming the retail vertical with Oculus goggles, smart mirrors, and smart shelves applications and help retailers in targeting the potential customers and uplifting customer experience and value.

The following are the major objectives of the study.

• To define, describe, and forecast the edge computing market on the basis of components (hardware, platform, solution, and services), applications, organization sizes, verticals, and regions
• To provide detailed information regarding the major factors influencing the growth of the market (drivers, restraints, opportunities, and industry-specific challenges)
• To analyze the submarkets with respect to the individual growth trends, prospects, and contributions to the overall market
• To forecast the market size of the market segments with respect to the 5 main regions, namely, North America, Europe, Asia Pacific (APAC), Middle East and Africa (MEA), and Latin America
• To analyze the opportunities in the market for stakeholders by identifying high-growth segments in the market
• To profile the key players of the market and comprehensively analyze their core competencies1 in each microsegment
• To analyze competitive developments, such as agreements, alliances, joint ventures, and mergers and acquisitions, in the edge computing market  

During this research study, major players operating in the edge computing market in various regions have been identified, and their offerings, regional presence, and distribution channels have been analyzed through in-depth discussions. Top-down and bottom-up approaches have been used to determine the overall market size. Sizes of the other individual markets have been estimated using the percentage splits obtained through secondary sources such as Hoovers, Bloomberg BusinessWeek, and Factiva, along with primary respondents. The entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews with industry experts such as CEOs, VPs, directors, and marketing executives for key insights (both qualitative and quantitative) pertaining to the market. The figure below shows the breakdown of the primaries on the basis of the company type, designation, and region considered during the research study.

To know about the assumptions considered for the study, download the pdf brochure

The edge computing ecosystem comprises hardware and software vendors such as Nokia Networks (Finland), Huawei Technologies Co., Ltd. (China), Juniper Networks, Inc. (US), Dell, Inc. (US), Cisco Systems Inc. (US), Hewlett Packard Enterprise Development LP (US), SixSq Sàrl (Switzerland), FogHorn Systems (US), Vasona Networks, Inc. (US), MachineShop Inc. (US), Saguna Networks Ltd. (Israel), Vapor IO (US), Xiotech Corporation (US), Mirror Image (US), Aricent Inc. (US), and ADLINK Technology Inc. (US).

Major Edge Computing Market Developments

• In July 2017, Huawei partnered with the China-based, state-owned telecommunication company, China Mobile Communications to launch a pilot project based on multi-access edge computing for smart stadium. The solution would enable mobile users in China to buffer videos from content sources in the stadium.
• In May 2017, Cisco partnered with Microsoft to connect Azure IoT suite with Cisco fog deployment. This strategic partnership would help their joint customers to build and host their application in Azure while leveraging the power of edge. Furthermore, it would optimize their IoT systems by storing only the necessary data on cloud while processing real-time data at the edge.
• In February 2017, Cisco and SAS teamed up to launch innovative edge-to-enterprise analytics platform for IoT applications. The new industry platform would leverage the analytics power at the edge of the network to detect unusual events as they occur.

Target Audience

• Edge computing solution and service providers
• System integrators
• Application developers
• Hardware vendors
• Consulting firms
• Research organizations
• Resellers and distributors

Edge Computing Market Report Scope

Edge Computing Market By Component

• Hardware
• Platform
• Solutions
• Services
• Consulting Services
• System Integration and Testing
• Technical Support

Edge Computing Market By Application

• Smart Cities
• Location Services
• Analytics
• Environmental Monitoring
• Optimized Local Content
• Data Caching
• Augmented Reality
• Others (asset tracking and video surveillance)

Edge Computing Market By Organization Size:

• SMEs
• Large Enterprises

Edge Computing Market By Vertical:

• Manufacturing
• Healthcare
• Transportation
• Government and Public
• Media and Entertainment
• Energy and Utilities
• Telecom and IT
• Retail
• Others (hospitality, BFSI, and education)

Edge Computing Market By Geography

• North America
• Europe
• Middle East and Africa (MEA)
• Asia Pacific (APAC)
• Latin America

Critical questions which the report answers

• Which are the substitute solutions and how big is the threat from them?
• Which are the top use cases where edge computing can be implemented for revenue generation while leveraging new technologies like artificial intelligence and analytics?
• What are the potential opportunities in the adjacent markets, such edge analytics and mobile edge computing?
• What should be your go-to-market strategy to expand the reach into developing countries across APAC, MEA, and Latin America?

Available Customizations

Based on the given market data, MarketsandMarkets offers customizations in the reports as per the client’s specific requirements. The available customization options are as follows:

Geographic Analysis

• Further breakdown of the North American edge computing market into countries
• Further breakdown of the European market into countries
• Further breakdown of the APAC market into countries
• Further breakdown of the Middle Eastern and African market into countries
• Further breakdown of the Latin American market into countries

Company Information

• Detailed analysis and profiling of additional market players (Up to 5)

The overall edge computing market is expected to grow from USD 1.48 billion in 2017 to USD 6.73 billion by 2022 at a CAGR of 35.4%. The global market is expected to witness healthy growth considering the tremendous growth in data generated at multiple sources across different applications. Furthermore, the rise in real-time applications has contributed to the growth of edge computing market. Moreover, increasing load on cloud infrastructure has encouraged enterprises to adopt and implement edge computing solutions.

Edge computing assists real-time applications in processing and analyzing data collected from various sensors and connected devices, at the edge of the network. It helps in reducing latency and thereby, provides a faster response to the critical applications. The data transmitted from the sensors and devices is stored and processed on the edge of the network, close to the devices, instead of transferring it to the cloud or data centers located miles away from the connected devices.

The edge computing market report categorizes the edge computing applications into 8 categories, namely, smart cities, location services, analytics, environmental monitoring, optimized local content, data caching, augmented reality, and others, which include asset tracking and video surveillance. All these applications have their own significance. Furthermore, the presence of edge computing at the edge of operators' networks enables a large number of new features to be developed in the industry, which helps them monetize the services.

The edge computing market in APAC is expected to grow at the highest CAGR during the forecast period. APAC is the fastest-growing market for edge computing and will provide high growth opportunities for edge computing vendors owing to the rapid technological development and government initiatives to promote digitization across industries with an objective to optimize resources and increase profitability in developing countries. Furthermore, the increased adoption of IT infrastructure and IoT by the enterprises in the developing countries of this region is expected to be one of the driving factors that facilitate the growth of the market.

Edge computing applications improve the response time, operational efficiency, and network utilization while enhancing the user experience and reducing overall network cost.

Smart Cities

The evolution of 5G and IoT is expected to increase the number of connected devices drastically. With this technological advancement in place, smart applications are developed to rely on man-to-machine and machine-to-machine communication. The smart cities application is expected to be gaining momentum with the focus on making the urban areas citizen-friendly and connected technologically. Smart cities comprise a multitude of applications, such as smart transportation, smart lighting, smart utilities, and smart citizen services. The real-time applications take place through the man-to-machine and machine-to-machine communication. These applications require a very low latency and high bandwidth due to the enormous data generated from sensors, devices, and IoT components. The processing and monitoring of such large amounts of data in the cloud make it difficult to cope with the low latency challenge. The edge computing solution brings the computing capabilities at the edge of the network, thereby increasing the efficiency and compatibility. The high volumes of data generated by sensors, devices, and IoT components are collected, stored, and computed at the extreme point of the network, which handles the high bandwidth requirements with low latency, to improve the efficiency and productivity.

Location Services

Location-based services make use of real-time geographical data from devices to provide information, entertainment, and security. In other words, location-based services recommend a variety of services linked to a particular place. Furthermore, to improve the Quality of Experience (QoE) for the usefulness of the recommended service, the user’s behaviour log and preference can be collected in the user’s mobile terminal, and then be delivered to the location-based service application. The edge computing solution makes it feasible to collect, store, and compute the data generated from the devices at the edge to reduce the response time and avoid unnecessary traffic to the cloud. For instance, if a user is nearby a mall, then discount coupons can be recommended to him/her for shopping. Henceforth, it would provide an opportunity to deliver higher value to consumers as well as the vendors.

Similarly, if some content needs to be blocked at certain geographies owing to the compliance, regulations, and licensing restrictions, it can be prevented by accessing it from that location. For example, the library of content for on-demand services by Netflix may vary depending on the region or a service may not be available in a particular region or country.

Analytics

Analytics is used across enterprises to improve the customer experience and efficiency. With edge computing, data analytics happens at the edge of the network, enabling decision makers to act on the insights at a faster pace. Edge computing offers benefit to enterprises, as the amount of data sent to the cloud decreases significantly and reduces the cloud computing costs, further. Moreover, in the manufacturing or power production industry, the data analytics at the edge helps make quick and efficient decisions that can be used to prevent failure, prevent product defects, and optimize the productivity.

Environmental Monitoring

Edge computing plays a crucial role in monitoring the places that are out of human reach or difficult to reach. Furthermore, it facilitates the continuous monitoring of remote locations to understand the unusual patterns. For example, sensor network and Closed-Circuit Television (CCTV) help in monitoring remote locations, and in case of intrusion, they communicate the observations to a base station, which resides at the edge of the sensor network and acts as a gateway to analyze the data. Upon computing the response, the network sends alert signals to the control station to notify the intrusion. Some of the instances include CCTV surveillance and environmental monitoring to detect wildfires, tsunamis, earthquakes, and other natural disasters. In the traditional system, the raw observation data is transmitted to a centralized data center for processing, which would increase the response time. On the other hand, with the deployment of the edge computing technology, the edge nodes can easily process the raw observation and provide useful analysis, thereby reducing the overall response time and bandwidth usage.

Optimized Local Content

The proliferation of smartphones and the global web-based services have resulted in a significant increase in the use of mobile broadband services. The display and graphic processing technologies are evolving rapidly, and high-resolution videos can be played on-the-go on the handheld devices. Furthermore, with the presence of social media, the content is accessed several times from the same region, at about the same time. The edge computing solution stores locally, the most popular content consumed in the geographical area, and once requested, it can provide the content from the local cache. In this scenario, there is no need to transfer the content over the core network, thereby leading to significant savings in the backhaul capacity. Thus, with the help of edge computing, the content can be distributed optimally among users at high speed and quality, which may enable everyone to access it.

Data Caching

Data caching is one of the applications that store the frequently accessed data, so that it can be retrieved back from memory rather than generating the data again. Storing this data at the edge of the network reduces the latency and increases the efficiency, as the data is stored and processed near the source. Edge computing facilitates storage and computing of large volumes of data, so that it can be accessed by the users as per their needs. For instance, Orbitz, one of the leading global online travel services, uses data caching to store frequently accessed data, which improved the company’s productivity and reduced the licensing, maintenance, and operations costs.

Augmented Reality

Edge computing offers broad opportunities in augmented reality to empower enterprises across different verticals. Augmented reality requires a very low latency for its successful implementation to accomplish the desired tasks. Edge computing provides ultra-low latency and reduces the traffic on the cloud to ensure increased efficiency and productivity. For instance, implementation of augmented reality in gaming requires very less response time to enhance the user gaming experience.

Others

Others include asset tracking and video surveillance applications. In the recent years, video surveillance is being extended from the operations room to mobile devices, enabling the security personnel to access any feed, at any time and location. The edge computing solution is used for analyzing raw video streams from surveillance cameras connected to the network, and for forwarding the relevant incidents to the city command center. Edge computing is expected to provide exceptional performance and quality, while at the same time, provide savings in the backhaul capacity by being able to provide content as close to the edge as possible. The biggest gains can likely be achieved in a scenario with a dense population of consumers in a small geographical area.

Asset tracking systems generate large amounts of data across different verticals, such as manufacturing, retail, and transportation and logistics. It becomes difficult for business systems to manage and compute this bundled data, which eventually leads to increased latency and efficiency. Edge computing is likely to play a vital role in this application by processing and computing the data at the edge, instead of sending it to the data centers that are located far away from the data source.

Critical questions the report answers:

• Where will all these developments take the industry in the mid to long term?
• What are the upcoming industry applications for edge computing?

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The security and privacy concerns related to edge computing is a major factor restraining the growth of the market. Security breaches, hacking and attacks, and Distributed Denial of Service (DDoS) on devices, such as routers, base stations, and switches, are the major security issues encountered. These are the prime challenges that vendors need to overcome for exploring the edge computing market. Data security is a prime concern, as the data stored in the micro data centers is vulnerable to cyber-attacks from external agents. Since edge computing forms a distributed network, it increases the risks of the number of attacks, such as malware and other security exploits.

Key players in the edge computing market include Nokia Networks (Finland), Huawei Technologies Co., Ltd. (China), Juniper Networks, Inc. (US), Dell, Inc. (US), Cisco Systems Inc. (US), Hewlett Packard Enterprise Development LP (US), SixSq Sàrl (Switzerland), FogHorn Systems (US), Vasona Networks, Inc. (US), MachineShop Inc. (US), Saguna Networks Ltd. (Israel), Vapor IO (US), Xiotech Corporation (US), Mirror Image (US), Aricent Inc. (US), and ADLINK Technology Inc. (US). These players have adopted various strategies, such as new product launches, to cater to the needs of the edge computing users.