Edge Computing Market

The global Edge Computing Market size is expected to grow from USD 53.6 billion in 2023 to USD 111.3 billion by 2028, at a Compound Annual Growth Rate (CAGR) of 15.7% during the forecast period.

The impact of recession on the market is covered throughout the report. Our modern-day lives are overfilled with new digital developments. Regular permeation has expanded from the usage of AR tools like face filters, VR tools like voice assistants to smart IoT devices across industry verticals like healthcare, government and defense, manufacturing, among others. The changes and growth of these devices entail lightning speeds and huge volumes of data consumption which cannot be efficiently scaled for real-time processing and security by the cloud. Edge computing with its distributed approach and local, intelligent processing at the edge enables these developments and supports in the complete realization of these technologies, benefiting the most out of these. Lower latency, data processing at the edge and without the need to be transferred, higher computing capacity, enhanced security are few key driving forces in the edge computing market. Recession has a positive impact on the edge computing market.

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Recession Impact on the global Edge Computing Market

The edge computing market has witnessed direct and indirect impacts due to the economic slowdown. Some of the major implications include reduced investments, delayed deployments, cancelled client projects, increased focus on cost optimization, the demand for edge solutions, impact on edge device manufacturers, and focus on efficiency and automation. The recession has slightly affected the manufacturing sector, including the production of edge devices and sensors. If manufacturers face continuously decreased demand or financial difficulties, it could lead to supply chain disruptions, increased prices, or delays in delivering edge computing hardware. Further, edge computing typically requires upfront infrastructure, hardware, and software investments. Due to the economic slowdown, organizations are now more cautious about capital expenditures and are less willing to take on the financial burden of implementing and maintaining edge computing solutions. The perceived risks and uncertainties associated with new technology adoption may deter organizations from pursuing edge computing initiatives.

Edge Computing Market Dynamics

Drivers: Exponentially increasing data volume(s) and network traffic

With the increased digitalization, data is increasing at a tremendous rate. According to the United Nations Economic Commission for Europe, data growth will be 350% higher by the end of 2019 compared to 2015. This exponential increase in data traffic requires higher network bandwidth. It can also lead to incomprehensible network congestion and failure. According to Cisco, cloud data center traffic will grow at a CAGR of 27% from 2016 to 2021. However, the benefits of edge computing, such as low latency, high bandwidth, and low power, enable enterprises to easily overcome such issues by moving data processing and analysis closer to the source. Instead of moving all the data directly to the centralized storage, local edge computing centers identify only the vital and mission-critical data and send it to the central data center or cloud. On the other hand, local edge centers also offload workload by compiling and sending daily reports about remaining data for long-term storage. Subsequently, this helps in reducing the data that traverses the network, thereby reducing network bottlenecks.

Restraints: Initial CAPEX investments for infrastructure

Business practices are shifting from Capex to Opex (Operational Expenses). As a result, an organization today has the flexibility to source its software according to its business needs. This shift significantly reduces capital expenditure (CAPEX) because large parts of the physical infrastructure, such as servers, server rooms, or skilled and trained personnel, can be eliminated, thereby eliminating a restraint in the edge computing market. The cost for the software investment thus shifts from one-off, expensive capital expenditure that appears in a company’s assets as tied-up capital to flexible consumption-based, monthly operating costs – basically as a kind of subscription service. Capex is a barrier when edge technology is needed to be functional, full-fledged, effectively and efficiently.

Capital expenditure does not necessarily shift to the operating costs in the same amount. Ultimately, a decisive advantage of cloud solutions is their scalability and the flexibility that goes with it. Unlike Opex investments, Capex investments are usually costly and simply cannot be replaced after implementation. Therefore, an enterprise is tied to its investment for the long term, which clearly makes it very sluggish in IT operations and not as agile as is the case with Opex costs. In the long run, when new technologies make their way into IT, flexibility and scalability plays/poses a decisive advantage.  Given the rapid speed of technical innovations, supposedly one-off capital expenditure (Capex) can quickly become permanent and develop into regular and unforeseen follow-up expenditure. Trained and reliable personnel are needed to administer and maintain IT systems independently in CAPEX investments. Scalability of in-house IT resources is complicated and too costly.

Opportunities: Emergence of autonomous vehicles and connected car infrastructure such as Android Auto, Apple CarPlay

Edge computing in autonomous cars can enable more accurate and quicker utilization of the data collected, enabling edge data centers to offload non-critical data and retain important data within the vehicle. Combined with Artificial Intelligence (AI) and Machine Learning (ML), edge computing can also help achieve situational awareness within a fraction of the time by providing local processing power to speed up the processing of huge data generated through autonomous cars. This smart driving can help prevent road accidents and avoid traffic jams effectively. Owing to the benefits of edge computing, more autonomous car manufacturers are expected to invest in the technology in the coming years, which is further expected to bolster the growth of the edge computing market

Challenges: Cyberattacks and limited authentication capabilities at the edge

Despite the benefits, the edge computing architecture is susceptible to cyberattacks with the addition of vulnerable edge nodes and IoT devices. Various IoT devices, such as security cameras, smart doorbells, and baby monitors, have limited capabilities of authentication and encryption. Hence, they are prone to tampering, eavesdropping, malicious congestion, and identity forging. With the increasing number of IoT startups and rising competition, many small companies rely on security through obscurity while neglecting the risk of cyberattacks. As these devices lack robust IT hardware protocols, users having less or no knowledge about IT security might lose critical data, paving the way for malware that could shun the entire edge network. This could also lead to large security breaches and can cause huge economic losses to the entire ecosystem. Eliminating authentication and enumeration vulnerabilities is the biggest challenge for IoT device manufacturers until the companies introduce some tough protocols and authentication systems within the devices.

Market Ecosystem

Based on component, hardware segment to hold the second highest CAGR in the edge computing market during the forecast period

Edge computing devices are designed to perform a specific task and are equipped with applications required to perform various tasks. For instance, sensors are utilized to monitor machine temperature. In this case, the sensor collects the temperature data from the machine and transfers this to the data center. Few edge computing devices act as a gateway to facilitate data aggregation, analysis, and control. On the other hand, other edge devices act as computational nodes, capable of performing complex operations and analyses on self-generated data. Local data centers are large-scale facilities owned and governed by service providers. These data centers are close enough to the edge devices to support load balancing, data storage, and optimal resource allocation.

Based on application, content delivery segment to show promising growth in the edge computing market during the forecast period

The adoption rate of cloud, all-things-video, IoT, and edge computing brings life back to Content Delivery Networks (CDNs) and multi-CDN designs. A content delivery network is a group of geographically distributed servers that speed up the delivery of web content closer to the user network. A CDN is an edge application used to manage heavy workloads and maintain Quality of Experience (QoE). Edge computing aims at decentralizing data processing and improving delivery time as much as possible. So, by shortening the distance between devices and the storage cloud, edge computing eliminates the bandwidth constraints. As per Cisco, CDNs are expected to handle 72% of the worldwide internet traffic by 2022, while they handled up to 56% in 2017.

Based on organization size, SMEs to record a higher CAGR in the edge computing market during the forecast period

Organizations with employee numbers ranging from 1 to 1,000 are categorized as SMEs. According to a survey by the VOLTA data center, 38% of small businesses utilize edge computing technology compared to large enterprises, which is 60%. Leading companies, such as AWS and TIBCO, have introduced lightweight edge computing solutions to help automate data analysis with rapid implementation benefits at a lower infrastructure cost. With the increasing awareness about the edge computing benefits, the growth of the edge computing market could be high among SMEs in the future. Edge and cloud computing use 5G networks, which is fast and increases bandwidth. This will impact a small business operation where it will be possible to transmit massive volumes of data within a short period and therefore be able to serve a larger number of customers. On data storage, using a 5G network allows organizations and individuals to store massive amounts of data. Small businesses can use edge computing to ensure services are run effectively and quality service is provided to customers. Edge computing allows users to store data on their devices and computers, thereby eliminating the need for additional data servers stored offsite. Most small businesses could utilize edge computing to ensure the automation of critical business functions.

Based on vertical, transportation and logistics industry to record the second highest market share in the edge computing market during the forecast period

Decreasing carbon emissions, ensuring driver and passenger safety, and managing assets efficiently are key drivers among transportation and logistics companies to adopt emerging technologies, such as smart sensors, computational devices, and security systems. The transportation and logistics industry has undergone a significant transformation with the advent of IoT and edge computing. Edge computing reduces data sharing and latency by facilitating connection with devices and sensors in vehicles and databases, enabling intelligent transportation. By considering the status of traffic and weather, edge computing formulates route plans and reduces traffic and accident risks. This ensures the safety of drivers and reduces the detrimental effect of increasing carbon emissions.

North America to hold the largest market share in the edge computing market recording the third highest CAGR during the forecast period

The North American region has played a significant role in the growth and development of the edge computing market. It has been at the forefront of adopting and implementing edge computing technologies, driving innovation, and influencing global trends in this domain. North America has a robust and mature IT infrastructure, making it an ideal environment for edge computing deployments. The region is home to several major technology companies and cloud service providers that have been instrumental in driving the adoption of edge computing solutions. These companies have invested heavily in developing edge infrastructure, data centers, and edge-enabled services to cater to the increasing demand for low-latency and high-performance computing at the network edge. Moreover, the North American market has witnessed a surge in the number of connected devices and the exponential growth of data generated by these devices. Edge computing provides a solution to process and analyze this massive volume of data at the edge, closer to the source, thereby reducing latency and improving real-time decision-making capabilities. The region has also seen significant developments in sectors such as manufacturing, healthcare, transportation, and retail, where edge computing is being leveraged to enhance operational efficiency, enable autonomous systems, facilitate edge-based analytics, and deliver personalized experiences to customers. Furthermore, the North American market has witnessed the emergence of edge-focused startups and partnerships between technology companies, telecommunications providers, and cloud service providers to accelerate the adoption and deployment of edge computing solutions. These collaborations have contributed to the growth of the edge computing ecosystem in the region.

Key Market Players

The edge computing market is dominated both by established companies as well as startups such as Cisco (US), AWS (US), Dell Technologies (US), HPE (US), Huawei (China), IBM (US), Intel (US), Litmus Automation (US), Microsoft (US), Nokia (Finland), ADLINK (Taiwan), Axellio (US), Capgemini (France), ClearBlade (US), Digi International (US), Fastly (US), StackPath (US), Vapor IO (US), GE Digital (US), Moxa (Taiwan), Sierra Wireless (Canada), Juniper Networks (US), EdgeConnex (US), Belden (US), Saguna Networks (Israel), Edge Intelligence (US), Edgeworx (US), Sunlight.io (UK), Mutable (US), Hivecell (US), Section (US), EdgeIQ (US). These vendors have a large customer base and strong geographic footprint along with organized distribution channels, which boosts them in revenue generation. 

The study includes an in-depth competitive analysis of these key players in the edge computing Market with their company profiles, recent developments, and key market strategies. 

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Scope of the Report

This research report categorizes the edge computing market to forecast revenue and analyze trends in each of the following submarkets:

Based on the Component:

• Hardware
• Software
• Services

Based on the Application:

• Smart Cities
• Industrial Internet of Things (IIoT)
• Remote Monitoring
• Content Delivery
• Augmented Reality (AR) and Virtual Reality (VR)
• Others (Autonomous Vehicles, Drones, And Gaming)

Based on the Organization Size:

• Large Enterprises
• SMEs

Based on the Verticals:

• Manufacturing
• Energy and Utilities
• Government and Defense
• Telecommunications
• Media and Entertainment
• Retail and Consumer Goods
• Transportation and Logistics
• Healthcare and Life Sciences
• Other Verticals (BFSI and Education)

Based on Regions:

• North America
  • United States
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • Australia
  • Rest of Asia Pacific

• Middle East and Africa
  • United Arab Emirates (UAE)
  • Saudi Arabia
  • South Africa
  • Rest of Middle East and Africa
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America

Recent Developments

• In May 2023, Dell Technologies unveiled its NativeEdge platform that has the capability to ease the deployment and management complexities of edge devices for remote-focused firms. NativeEdge replaces Dell’s Project Frontier, which was launched earlier. The new platform is designed as an edge computing platform that provides clients a choice around software, IoT, multi-cloud tools and operational technology to simplify, automate and manage edge infrastructure.
• In April 2023, Nokia launched 4 third-party applications for MX Industrial Edge, which would foster enterprises connect, collect, and analyze data from disparate sources, including video cameras, thereby unlocking its value from operational technology assets over a robust and secure on-premises edge.  
• In April 2023, Dell Technologies collaborated with Ericsson which will enable open cloud networks that allow customers to choose their own infrastructure while ensuring telco-grade performance at the far edge. Including Dell PowerEdge servers to Ericsson’s Cloud RAN solution, including the PowerEdge XR8000 and XR5610, which are specifically designed for telecom, Open RAN and mobile edge-computing workloads, the company brings more choices and flexibility for Cloud RAN customers. Dell PowerEdge servers assist facilitating the Cloud RAN journey owing to their high performance, small form factors, resilience, and interconnectivity with the larger network(s). 
• In February 2023, Cisco introduced its Cisco Edge Intelligence, a solution by Cisco that improves data governance and control, fetching intelligent insights from connected assets to improve the competitiveness of an organization. It is built on Cisco’s industry-leading multi-layered security.
• In February 2023, the acquisition of Athonet by HPE will integrate Athonet’s technology into its existing Communications Service Provider [CSP] and Aruba networking enterprise offerings to create a private networking portfolio which accelerates digital transformation from edge-to-cloud. Few benefits include enhanced private networks, accelerated private 5G deployments, new enterprise revenue streams for telecom companies with differentiated services leveraging 5G and Wi-Fi, management of operational complexity and cost efficiency with 5G orchestration and zero-touch automation to deliver newer workloads from edge-to-cloud.

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