The Edge Data Center Market is projected to reach $46.4 billion by 2030, at a CAGR of 20.9% during the forecast period 2023–2030. The growth of the edge data center market is mainly attributed to the rising need for edge data center for industrial IoT applications, the growing demand for low-latency processing and real-time automated decision-making solutions, and the increasing utilization of edge data center in online video streaming. The high upfront capital expenditure required to implement edge data center restrains the growth of this market. Additionally, the emergence of autonomous vehicles and the commercialization of 4G technology are expected to generate growth opportunities for the players in this market. Data privacy and security concerns are a major challenge for market growth.
Furthermore, the rising adoption of IoT devices across industries and the growth in 5G networks are prominent trends in the edge data center market.
The Growing Demand for Low-Latency Processing and Real-time Automated Decision-making Solutions
With increasing internet penetration and the growing usage of smartphones and IoT devices, data traffic is growing exponentially, driving the demand for edge data center. The generation of large volumes of data due to increasing big data traffic results in latency issues and slow network speeds. Therefore, the need for edge data center to manage such huge volumes of data and enable low-latency processing and real-time automated decision-making is driving the growth of this market. In traditional big data processing methods, data is stored and processed in batches, which can take a significant amount of time. Delays can lead to missed opportunities or inaccurate insights, especially in industries such as finance, healthcare, and telecommunications, where real-time data processing is particularly important.
Ensuring low latency can help businesses increase profits and provide a competitive advantage by enabling them to respond to market changes and customer needs quickly. With data being generated at unprecedented rates, industries must process and analyze that data quickly to gain a competitive edge. Low latency enables the processing and analysis of big data in real time. Additionally, low latency can reduce the load on traditional big data systems by processing only the necessary data in real time, saving costs. Many ultra-low-latency solutions providers, such as Celoxica Limited (U.K.), Crown Castle Inc. (U.S.), and IPC Systems, Inc. (U.S.), are focused on helping industries manage risks by providing low-latency price discovery and proximity to key financial markets. For instance, in April 2023, IPC Systems, Inc. (U.S.) partnered with Celoxica Limited (U.K.) to deliver FPGA-powered low latency normalized market data feeds across all asset classes. Thus, the growing demand for low-latency processing and real-time automated decision-making solutions drives the need for edge data center.
Key Findings in the Edge Data Center Market Study:
In 2023, the Metro Edge Data Center Segment is Expected to Dominate the Edge Data Center Market
Based on type, the global edge data center market is broadly segmented into metro edge data center and mobile edge data center. In 2023, the metro edge data center segment accounted for the larger share of the global edge data center market. The large share of this segment is mainly attributed to the increasing demand for localized cloud computing resources for businesses and organizations, growing data traffic, increasing demand for low-latency and high-bandwidth communication, and the growing development of 5G networks.
However, the mobile edge data center segment is projected to grow at the highest CAGR during the forecast period. The growth of this segment is mainly attributed to the increasing demand to reduce latency in mobile applications, enhance user experience, enable real-time functionalities, optimize network bandwidth, and alleviate congestion by processing data locally.
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In 2023, the Software Segment is Expected to Dominate the Edge Data Center Market
Based on component, the global edge data center market is segmented into hardware, software, and services. In 2023, the software accounted for the largest share of the global edge data center market. The large share of this segment is mainly attributed to the rising need to manage, orchestrate, and optimize the operations of edge data center, the increasing need for real-time data analysis, and remote administration of the edge data center' infrastructure, the growth of the software segment. This segment is projected to record the highest CAGR during the forecast period.
In 2023, the Cloud-based Deployments Segment is Expected to Dominate the Edge Data Center Market
Based on deployment mode, the global edge data center market is segmented into on-premise deployments and cloud-based deployments. In 2023, the cloud-based deployments segment accounted for the larger share of the global edge data center market. This segment is projected to record the highest CAGR during the forecast period. The segment's large share can be attributed to the increasing need to minimize data transmission to centralized cloud facilities, enable seamless management and control of distributed applications, rising need to deploy applications and services closer to end users, increasing need to efficiently allocate resources, and reduce latency while improving performance. This segment is projected to record the highest CAGR during the forecast period.
In 2023, the Small & Medium-sized Enterprise Segment is Expected to Dominate the Edge Data Center Market
Based on organization size, the global edge data center market is segmented into large enterprises and small & medium-sized enterprises. In 2023, the small & medium-sized enterprise segment accounted for the larger share of the global edge data center market. This segment is projected to record the highest CAGR during the forecast period. The segment's large share can be attributed to the rising demand for real-time processing and localized data management, the growing need for latency-sensitive applications, and the increasing need to leverage localized computing resources without significant infrastructure investments.
In 2023, the 5G and 4G Infrastructure Segment is Expected to Dominate the Edge Data Center Market
Based on application, the global edge data center market is segmented into artificial intelligence (AI), internet of things (IoT), AR/VR, telemedicine, 5G & 4G infrastructure, autonomous vehicles, video/live streaming, network functions virtualization (NFV), and other applications. In 2023, the 5G and 4G infrastructure segment accounted for the largest share of the global edge data center market. The large market share of this segment is mainly attributed to the rising adoption of edge data center for high bandwidth in 5G infrastructure, the growing need for ultra-low latency applications, and the increasing adoption of 5G networks.
However, the artificial intelligence (AI) segment is projected to record the highest CAGR during the forecast period. The growth of this segment can be attributed to factors such as the growing need for real-time analytics, reduced bandwidth, and network congestion, ensuring smooth data flow, and delivering real-time AI-powered insights without putting the load on network infrastructure.
In 2023, the IT & Telecommunications Segment is Expected to Dominate the Edge Data Center Market
Based on end-use sector, the global edge data center market is segmented into IT & telecommunications, automotive, transportation & logistics, healthcare, energy & utilities, manufacturing, government & defense, retail, and other end-use sectors. In 2023, the IT & telecommunications segment is expected to account for the largest share of the global edge data center market. The large share of this segment is mainly attributed to the increasing demand for real-time data processing, the rising need for low-latency and high-bandwidth communication, and the need to reduce the risk of data breaches during transmission while ensuring compliance with data protection regulations. This segment is projected to record the highest CAGR during the forecast period.
Asia Pacific to be the Fastest Growing Regional Market
Based on geography, the global edge data center market is segmented into North America, Europe, Latin America, and the Middle East & Africa. In 2023, Asia-Pacific is expected to account for the largest share of the edge data center market, followed by North America, Europe, Latin America, and the Middle East & Africa. The Asia-Pacific region is projected to register the highest CAGR during the forecast period. The major factors driving the market's growth are the increasing adoption of Internet of Things (IoT) devices, the growing need to meet the evolving needs of latency-sensitive applications, the increasing demand for real-time processing and localized data management, growing need for low-latency connectivity, seamless communication, and rising digitalization and automation in the various sector,
Key Players
The report includes a competitive analysis based on an extensive assessment of the key growth strategies adopted by the leading market participants in the edge data center market in the last three to four years. The key players profiled in the edge data center market report are Dell Technologies Inc. (U.S.), Cisco Systems, Inc. (U.S.), Eaton Corporation plc (Ireland), Fujitsu Limited (Japan), Schneider Electric SE (France), Hewlett Packard Enterprise Company (U.S.), Huawei Technologies Co., Ltd. (China), IBM Corporation (U.S.), NVIDIA Corporation (U.S.), Mitsubishi Electric Corporation (Japan), Equinix, Inc (U.S.), American Tower Corporation (U.S.), Cyxtera Technologies, Inc. (U.S.), ABB (Switzerland), Nxtra Data Limited (India) (a subsidiary of Bharti Airtel Limited), Zenlayer Inc. (U.S.), Switch, Inc. (U.S.), Vertiv Group Corporation(U.S.), Nokia Corporation (Finland), EdgeConneX, Inc. (U.S.), Reichle & De-Massari AG (Switzerland), Ubiquity Management, LLC (U.S.), and Vapor IO, Inc. (U.S.).
Scope of the Report:
Edge Data Center Market Assessment, by Type
- Metro Edge Data Center
- Mobile Edge Data Center
Edge Data Center Market Assessment, by Component
- Hardware
- Software
- Services
- Training & Support
- Consulting Services
Edge Data Center Market Assessment, by Deployment Mode
- On-premise Deployments
- Cloud-based Deployments
Edge Data Center Market Assessment, by Organization Size
- Large Enterprises
- Small & Medium-sized Enterprise
Edge Data Center Market Assessment, by Application
- Artificial Intelligence (AI)
- Internet of Things (IoT)
- AR/VR
- Telemedicine
- 5G & 4G Infrastructure
- Autonomous Vehicles
- Video/live Streaming
- Network Functions Virtualization (NFV)
- Other Applications
Edge Data Center Market Assessment, by End-use Sector
- IT & Telecommunications
- Automotive
- Transportation & Logistics
- Healthcare
- Energy & Utilities
- Manufacturing
- Government & Defense
- Retail
- Other End-use Sectors
Edge Data Center Market Assessment, by Geography
- North America
- Asia-Pacific
- Japan
- China
- India
- South Korea
- Rest of Asia-Pacific
- Europe
- Germany
- U.K.
- France
- Italy
- Spain
- Rest of Europe
- Latin America
- Middle East & Africa
Key questions answered in the report: